On Thursday, Congressman Mike Conaway (R-TX) introduced H.R. 3761, the Carbon Capture Act. This legislation will reform, enhance and expand upon the current Section 45Q tax credit for carbon sequestration to provide a viable path forward for carbon capture, utilization and storage (CCUS) technologies. As an industry coalition focused on technology solutions for the responsible use of our fossil energy resources, CURC is supportive of this legislation and urges the House to act quickly to enact this bill that will enhance American energy production.
Michael Flannigan, CURC Co-Chair and Senior Vice President for Global Government Affairs, Peabody Energy, said that “This bill would enact important reforms allowing for the development of crucial energy infrastructure. Now more than ever, the federal government should step in to help advance CCUS technologies to commercial scale, which is essential to promote American energy security and American innovation.”
The Carbon Capture Act would increase the value of the Section 45Q tax credit to $35 over 10 years, incorporate the needs of different technologies and business models, improve the transferability of the credit, and fully incorporate utilization beyond enhanced oil recovery. Currently, the credit creates financial uncertainty for investors because of the insufficiency of the credit amount and the arbitrary cap on the number of tons of captured carbon dioxide (CO2) that are eligible for the credit. The changes to the Section 45Q tax credit in this bill will facilitate needed private sector investment in CCUS technologies by mitigating some of the barriers that make return on investment less certain.
“As it is written, the current Section 45Q tax credit does not do enough to facilitate investment in CCUS technologies. It is vital that we invest in technologies that utilize our abundant domestic energy resources like coal and natural gas in a way that supports our environmental goals. However, CCUS technologies remain relatively expensive at this stage in their development,” stated Barbara Walz, CURC Co-Chair and Senior Vice President for Policy and Compliance with Tri-State Generation and Transmission Association. “This bill will provide the critical federal government support necessary to bring costs down and spur the development and deployment of this technology.”
CURC applauds Congressman Conaway and each of the 32 cosponsors of the bill for introducing this legislation that displays the broad bicameral support for CCUS technologies within Congress. Last year, Congressman Conaway introduced similar legislation that had 49 bipartisan cosponsors and, earlier this summer, a bipartisan group of Senators introduced companion legislation in the Senate to help us improve our economy and energy security by strengthening the Section 45Q tax credit.
“The introduction of this bill shows that there is support within both chambers of Congress to enact these important reforms,” stated Shannon Angielski, Executive Director of CURC. “Our coalition appreciates that Members on both sides of the aisle and both sides of the Capitol believe in the potential of CCUS technologies to contribute toward the goal of affordable, resilient American energy. This bill is an important step in that direction.”