WASHINGTON – U.S. Senator Chris Coons (D-Del.) joined Senators Tina Smith (D-Minn.), Shelley Moore Capito (R-W.Va.) and nine other senators in introducing legislation to reduce greenhouse gas emissions. The Carbon Capture Utilization and Storage Tax Credit Amendments Act would make tax credits that encourage carbon capture projects more available and easier to use.

“It’s clear that accelerated deployment of carbon capture, utilization, and storage is crucial for reaching mid-century climate goals and would create thousands of jobs and help maintain American competitiveness in the process,” said Senator Coons. “I’m proud to join Senators Smith and Capito in introducing the Carbon Capture Utilization and Storage Tax Credit Amendments Act that would make important reforms to the 45Q and 48A tax credits, enhancing the ability of these federal incentives to spur development of new CCUS projects. Together with the bipartisan SCALE Act I authored, this bill will further drive the adoption of CCUS in the United States.”

“The science is clear—climate change is real, it’s caused by humans, and we need urgent action to address it. Our bill works toward that goal by working to reduce greenhouse gas emissions,” said Senator Smith. “Carbon capture and storage is a crucial technology for reducing emissions from biofuels, steel, and other industries important to Minnesota. Climate scientists tell us that if we are to avoid the worst of the climate crises, we will absolutely need direct air capture to pull excess carbon dioxide out of the atmosphere, and this bill provides increased support for that emerging type of carbon capture. You can see from the Senate coalition supporting this legislation that what’s good for our environment and good for our economy is bipartisan, as it should be.”

“The United States has an opportunity to be a leader when it comes to carbon capture technologies, and this legislation will help us achieve that goal,” Senator Capito said. “Not only will it help us protect our coal and natural gas industries, which are so critical to states like West Virginia, but this legislation promotes domestic energy production and reducing our power and manufacturing sector emissions. I’m proud to reintroduce this bipartisan legislation that will make a big difference in putting American innovation to work growing our economy and combatting climate change in a responsible way, regardless of the current economic circumstances.”

The bipartisan bill is supported by Senators Sheldon Whitehouse (D-R.I.), Kevin Cramer (R-N.D.), Brian Schatz (D-Hawaii), John Hoeven (R-N.D.), Joe Manchin (D-W.Va.), John Barrasso (R-Wyo.), Chuck Grassley (R-Iowa), Ben Ray Luján (D-N.M.) and Joni Ernst (R-Iowa). This legislation would make improvements to ensure that carbon capture utilization and storage (CCUS) credits are utilized to their full potential to create manufacturing, construction, and engineering jobs and prevent carbon dioxide emissions.

The CCUS Tax Credit Amendments Act would:

1) Extend “commence construction” by five years. The credits would be available to projects that begin by the end of 2030.

2) Allow for direct payment of the carbon capture credits. This is urgently needed for the majority of project developers who otherwise lack sufficient taxable income to fully utilize the credits. 

3) Increase support for direct air capture (DAC) of CO2 from the atmosphere. This is key to the decarbonization of the heavy industry and manufacturing sectors and also allows us to pull carbon dioxide out of the atmosphere after it has been released.

4) Allow the 45Q credit to offset tax obligations due to the Base Erosion Avoidance Tax (BEAT).This bill will grant the same tax treatment to carbon capture, direct air capture and carbon utilization projects as is currently offered to wind and solar projects.

5) Revise 48A credit to make it work for CCUS retrofits. This bill includes modifications to the 48A tax credit aligned with the recent Carbon Capture Modernization Act.

You can access a summary of the bill here and full text of the bill here.