The federal carbon capture and sequestration (CCS) tax credit – often referred to as 45Q – can be claimed by qualified taxpayers for every metric ton of carbon oxide captured and sequestered that would have otherwise been released into the atmosphere. Congress created the credit in 2008 to jump start adoption of technologies that would reduce emissions from existing sources. In practice, companies have primarily claimed 45Q tax credits for pumping captured carbon oxides underground to increase oil production from aging wells, canceling out most of the emissions reduction benefit. Despite the credit’s history of fraudulent claims, lawmakers recently expanded and extended the tax credit under the guise of combating climate change, with little assurance it will do more than line the pockets of special interests like oil and gas companies and the ethanol industry. It’s time to reverse course on federal support for carbon capture and sequestration and, at a minimum, set up mechanisms to protect taxpayers from waste, fraud, and abuse.

Check out additional TCS resources on CCS here: https://www.taxpayer.net/ccs/

The issue brief can be viewed below or downloaded here.