- Rep. Mike Conaway (R-Texas)
H.R. 3761 and S. 1535 extend and expand the Section 45Q tax incentive for projects that capture and store carbon from coal and natural gas power plants and other facilities.
Both bills, while not identical, would similarly increase the value of the credit for new projects, eliminate an existing cap on emission reductions covered under the credit, while limiting the number of years of eligibility for projects. The bills would also expand the range of projects that could receive the credit to also include carbon monoxide capture and other facilities.
Extending and expanding the 45Q incentive is part of a multi-pronged financing effort for carbon capture projects by driving equity investment in the projects.
Doing so has the potential to dramatically boost commercial carbon capture deployment in the U.S., which can also lead to significant increases in enhanced oil recovery and other economic benefits.
The Petra Nova carbon capture project, located outside of Houston, is emblematic of the burgeoning potential. It created more than 500 jobs and attracted hundreds of millions in private investment. By capturing emissions and injecting them into a nearby oil field, it is expected to increase production from just 300 barrels of oil per day to upwards of 15,000 barrels daily. According to the National Enhanced Oil Recovery Institute, more than 300,000 barrels per day (or about 5 percent) of domestic oil production is harvested using carbon.