WASHINGTON, D.C. – U.S. Senators Shelley Moore Capito (R-W.Va.), Sheldon Whitehouse (D-R.I.), John Barrasso (R-Wyo.), and Kevin Cramer (R-N.D.), bipartisan Senate leaders on market-driven climate policy, today called U.S. Department of Treasury Secretary Steven Mnuchin urging the Internal Revenue Service (IRS) to issue its regulatory guidance related to the 45Q tax credit for carbon capture, utilization, and storage (CCUS). CCUS is an essential technology for reducing carbon emissions while preserving and growing jobs in the US economy.

Senators Capito, Whitehouse, and Barrasso authored the Furthering Carbon Capture, Utilization, Technology, Underground Storage, and Reduced Emissions (FUTURE) Act, bipartisan legislation to expand and enhance the 45Q tax credit for CCUS activities. This legislation was signed into law by President Donald Trump on February 9, 2018.

However, regulatory guidance to inform stakeholders on how to certify eligibility and claim the credit has yet to be issued by the IRS. These regulations must address the qualifying market activities, partnership structures, and verified permanent storage solutions for manmade carbon dioxide—which would otherwise have gone into the atmosphere and contributed to climate change—in order for taxpayers to begin utilizing the credit for industrial projects. To be eligible for the credit, projects must commence construction no later than December 31, 2023. The delay in the IRS issuing the accompanying guidance has cost two years of project development.

“These are complex, capital-intensive, and large-scale projects on the bleeding edge of technology and are integral to any serious efforts to address climate change,” said Senator Capito. “The issues involved in implementing the FUTURE Act are certainly complicated, but the loss of two years waiting on guidance has delayed projects from breaking ground and getting this technology out into the field. Further delay will hurt American competitiveness in a growing and competitive global market for CCUS technologies and negatively impact domestic energy, manufacturing, and construction jobs. Today, we urged Secretary Mnuchin to finalize this needed regulatory guidance as soon as possible and pursuant to congressional intent to ensure its benefits are as impactful as possible and stakeholders can finally get off the sidelines and get to work.”

“After a very long delay by the IRS, companies hoping to develop carbon capture technologies have some of the information they need to get started,” said Senator Whitehouse. “Still, this guidance is not complete and I look forward to the IRS issuing the final piece of the framework as quickly as possible. I was pleased to hear that Secretary Mnuchin is committed to getting this done, as hundreds of millions of dollars in investment are waiting in the pipeline.”

“America is the world’s leader in carbon capture technology and we want to keep it that way,” said Senator Barrasso. “More than two years ago, our bipartisan group introduced and helped pass the FUTURE Act. In doing so, we expanded access to much-needed tax credits for facilities looking to use innovative carbon capture technology. These groundbreaking technologies hold the key to massive carbon-emission reductions. Today, we made it clear to Secretary Mnuchin that it’s past time for the Internal Revenue Service to release long-awaited rules and guidance for this important technology. We need our laws and regulations to accelerate, not hinder, our environmental and energy goals.”

“I appreciate Secretary Mnuchin working closely with us to ensure we get the rules for carbon capture tax credits done quickly and, more importantly, done right. North Dakota’s coal, ethanol, and energy producers have been waiting for years to invest in carbon capture and utilization technology because they need IRS guidance to move forward confidently. The expansion and extension of 45Q enjoys broad bipartisan support. The forthcoming Notice of Proposed Rulemaking ought to be written in the same inclusive manner to incentivize its use by as many producers as possible,” Senator Cramer said.

BACKGROUND:

In addition to the FUTURE Act, the same group of senators are the lead sponsors of the Utilizing Significant Emissions with Innovative Technologies (USE IT Act) to facilitate deployment of CCUS infrastructure through regulatory improvements. Senator Capito has long been a leader in advocating for a national energy policy focused on domestic energy production and distribution to reduce dependence on foreign oil, the deployment of advanced technologies in the marketplace, and informed environmental regulation. As a leader on the Senate Committee on Environment and Public Works (EPW), she oversees the agencies regulating the country’s carbon- and nuclear-fueled baseload electric generation, manufacturing, and transportation sectors. In this role, Senator Capito is focused on preventing regulatory red tape from discouraging investments that will have economic and environmental benefits.

Senator Capito has also long supported institutions like West Virginia University (WVU) and the National Energy Technology Lab (NETL) that work on carbon capture, advanced materials manufacturing, and energy efficiency technologies.

 

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