45Q Tax Credit

The Inflation Reduction Act (IRA), signed into law by President Biden on August 16, 2022, will greatly incentivize CCS/CCUS projects:

(1) IRA will substantially increase 45Q tax credit values for CO₂capture projects:

(1a) For Point Source Capture (PSC) of CO₂

$85 per ton for saline storage of captured CO₂ (used to be $50 per ton)
$60 per ton for CO₂EOR and other utilizations of captured CO₂ (used to be $35 per ton)

(1b) For Direct Air Capture (DAC) of CO₂

$180 per ton for saline storage of captured CO₂ (used to be $50 per ton)

$130 per ton for CO₂ EOR and other utilizations of captured CO₂ (used to be $35 per ton)

(2) IRA will make it easier for CCS/CCUS projects to qualify for 45Q tax credit.

The minimum size of a qualifying CCS/CCUS plant reduces by half to 12,500 mtpa (used to be 25,000 mtpa)

(3) IRA will provide significant new avenues for monitizing 45Q tax credit.

Direct Pay for Credits: Direct pay will make it easier for companies to claim tax credits and to transfer them in a non-taxable cash sale.

(4) IRA will extend the deadline to begin construction on 45Q tax credit-eligible projects from 2026 to 2033.

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The recent policies, particularly 45Q Tax Credit in the US, is incentivizing new Carbon Management / CCS / CCUS / CO₂ EOR project activities.

If your company is involved in the Carbon Management / CCS / CCUS / CO₂ EOR projects then contact us to discuss how Avasthi & Associates, Inc. (A&A) Consulting Team of seasoned CO₂ geosequestration and CO₂ EOR consultants can help your company take full advantage of the 45Q tax credit.

To put the high-level and seasoned consultants, subject matter experts (SME), of A&A Consulting Team to work on your company's 45Q Tax Credit related projects, please contact us.