Bipartisan Group Backs Extension of Carbon Tax Credit

A bipartisan group of U.S. senators has announced plans to reintroduce legislation called the FUTURE Act, which would extend and expand the federal 45Q tax credit for carbon dioxide capture and sequestration.

The bill has the support of both fossil fuel companies and environmental groups. At present, the 45Q provision awards $10 per metric ton of stored industrial CO₂ used in enhanced oil recovery (EOR) projects, and $20 per metric ton for CO₂ stored in underground reservoirs. The new legislation calls for an increase to $35 and $50 per metric ton, respectively.

“I think everyone understands that we need to develop and expand this technology,” said Sen. Heidi Heitkamp (D-N.D.), one of the sponsors of the bill, which supports carbon capture utilization and storage (CCUS). Heitkamp and other sponsors of the legislation spoke July 12 at a news conference on Capitol Hill.

“This is one of the rare, bipartisan carbon bills that we believe presents the sweet spot in America for getting the job done,” said Heitkamp. “We come with different motivations but with the same vision. We want to provide certainty for our energy community and our environmental community.”

The FUTURE Act would extend the 45Q tax credit and incentivize the development of carbon capture technologies, while also reducing emissions. FUTURE stands for Furthering carbon capture, Utilization, Technology, Underground storage, and Reduced Emissions.

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