For purposes of section 38, the carbon oxide sequestration credit for any taxable year is an amount equal to the sum of-
Except as provided in subparagraph (B) or (C), the applicable dollar amount shall be an amount equal to-
In the case of any qualified facility described in subsection (d)(2)(A) which is placed in service after December 31, 2022, the applicable dollar amount shall be an amount equal to the applicable dollar amount otherwise determined with respect to such qualified facility under subparagraph (A), except that such subparagraph shall be applied-
In the case of any qualified facility which is placed in service before January 1, 2023, if any additional carbon capture equipment is installed at such facility and such equipment is placed in service after December 31, 2022, the applicable dollar amount shall be an amount equal to the applicable dollar amount otherwise determined under this paragraph, except that subparagraph (B) shall be applied-
The applicable dollar amount determined under subparagraph (A), (B), or (C) shall be rounded to the nearest cent.
In the case of a qualified facility placed in service before the date of the enactment of the Bipartisan Budget Act of 2018, for which additional carbon capture equipment is placed in service on or after the date of the enactment of such Act, the amount of qualified carbon oxide which is captured by the taxpayer shall be equal to-
For purposes of determining the carbon oxide sequestration credit under this section, a taxpayer may elect to have the dollar amounts applicable under paragraph (1) or (2) of subsection (a) apply in lieu of the dollar amounts applicable under paragraph (3) or (4) of such subsection for each metric ton of qualified carbon oxide which is captured by the taxpayer using carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018.
For purposes of this section-
The term "qualified carbon oxide" means-
The term "qualified carbon oxide" includes the initial deposit of captured carbon oxide used as a tertiary injectant. Such term does not include carbon oxide that is recaptured, recycled, and re-injected as part of the enhanced oil and natural gas recovery process.
For purposes of this section, the term "qualified facility" means any industrial facility or direct air capture facility-
For purposes of this section-
The term "applicable electric generating unit" means the principal electric generating unit for which the carbon capture equipment is originally planned and designed.
The term "baseline carbon oxide production" means either of the following:
the designed annual carbon oxide production, by mass, as determined based on an assumed capacity factor of 60 percent.
The term "capacity factor" means the ratio (expressed as a percentage) of the actual electric output from the applicable electric generating unit to the potential electric output from such unit.
Subject to subparagraph (B), the term "direct air capture facility" means any facility which uses carbon capture equipment to capture carbon dioxide directly from the ambient air.
The term "direct air capture facility" shall not include any facility which captures carbon dioxide-
The term "qualified enhanced oil or natural gas recovery project" has the meaning given the term "qualified enhanced oil recovery project" by section 43(c)(2), by substituting "crude oil or natural gas" for "crude oil" in subparagraph (A)(i) thereof.
The term "tertiary injectant" has the same meaning as when used within section 193(b)(1).
The credit under this section shall apply only with respect to qualified carbon oxide the capture and disposal, use, or utilization of which is within-
The Secretary, in consultation with the Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish regulations for determining adequate security measures for the geological storage of qualified carbon oxide under subsection (a) such that the qualified carbon oxide does not escape into the atmosphere. Such term shall include storage at deep saline formations, oil and gas reservoirs, and unminable coal seams under such conditions as the Secretary may determine under such regulations.
Except as provided in subparagraph (B) or in any regulations prescribed by the Secretary, any credit under this section shall be attributable to-
If the person described in subparagraph (A) makes an election under this subparagraph in such time and manner as the Secretary may prescribe by regulations, the credit under this section-
The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any qualified carbon oxide which ceases to be captured, disposed of, or used as a tertiary injectant in a manner consistent with the requirements of this section.
For purposes of this section, utilization of qualified carbon oxide means-
For purposes of determining the amount of qualified carbon oxide utilized by the taxpayer under paragraph (2)(B)(ii) or (4)(B)(ii) of subsection (a), such amount shall be equal to the metric tons of qualified carbon oxide which the taxpayer demonstrates, based upon an analysis of lifecycle greenhouse gas emissions and subject to such requirements as the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines appropriate, were-
through use of a process described in subparagraph (A).
For purposes of clause (i), the term "lifecycle greenhouse gas emissions" has the same meaning given such term under subparagraph (H) of section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1)), as in effect on the date of the enactment of the Bipartisan Budget Act of 2018, except that "product" shall be substituted for "fuel" each place it appears in such subparagraph.
For purposes of this section, in the case of an applicable facility, for any taxable year in which such facility captures not less than 500,000 metric tons of qualified carbon oxide during the taxable year, the person described in paragraph (3)(A)(ii) may elect to have such facility, and any carbon capture equipment placed in service at such facility, deemed as having been placed in service on the date of the enactment of the Bipartisan Budget Act of 2018.
For purposes of this paragraph, the term "applicable facility" means a qualified facility-
In the case of any taxable year beginning in a calendar year after 2009, there shall be substituted for each dollar amount contained in paragraphs (1) and (2) of subsection (a) an amount equal to the product of-
Rules similar to the rule under section 45(b)(3) shall apply for purposes of this section.
For purposes of paragraphs (3) and (4) of subsection (a), a person described in paragraph (3)(A)(ii) may elect, at such time and in such manner as the Secretary may prescribe, to have the 12-year period begin on the first day of the first taxable year in which a credit under this section is claimed with respect to carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018 (after application of paragraph (6), where applicable) if-
In the case of any carbon capture equipment placed in service before the date of the enactment of the Bipartisan Budget Act of 2018, the credit under this section shall apply with respect to qualified carbon oxide captured using such equipment before the earlier of January 1, 2023, and the end of the calendar year in which the Secretary, in consultation with the Administrator of the Environmental Protection Agency, certifies that, during the period beginning after October 3, 2008, a total of 75,000,000 metric tons of qualified carbon oxide have been taken into account in accordance with-
In the case of any qualified facility or any carbon capture equipment which satisfy the requirements of paragraph (2), the amount of the credit determined under subsection (a) shall be equal to such amount (determined without regard to this sentence) multiplied by 5.
The requirements described in this paragraph are that-
The requirements described in this subparagraph with respect to any qualified facility and any carbon capture equipment placed in service at such facility are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in-
shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such facility and equipment are located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code. For purposes of determining an increased credit amount under paragraph (1) for a taxable year, the requirement under clause (ii) of this subparagraph is applied to such taxable year in which the alteration or repair of qualified facility occurs.
Rules similar to the rules of section 45(b)(7)(B) shall apply.
Rules similar to the rules of section 45(b)(8) shall apply.
The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.
The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, including regulations or other guidance to-
26 U.S.C. § 45Q
Inflation Adjusted Items for Certain Tax YearsFor inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.
EDITORIAL NOTES
REFERENCES IN TEXTThe date of the enactment of the Bipartisan Budget Act of 2018 and the date of the enactment of such Act, referred to in text, is the date of enactment of Pub. L. 115-123, which was approved Feb. 9, 2018.
AMENDMENTS2022-Subsec. (b)(1)(A). Pub. L. 117-169, §13104(c)(2)(A), substituted "Except as provided in subparagraph (B) or (C), the applicable dollar amount" for "The applicable dollar amount" in introductory provisions.Subsec. (b)(1)(A)(i)(I). Pub. L. 117-169, §13104(b)(1)(A), substituted "$17" for "the dollar amount established by linear interpolation between $22.66 and $50 for each calendar year during such period".Subsec. (b)(1)(A)(i)(II). Pub. L. 117-169, §13104(b)(1)(B), substituted "$12" for "the dollar amount established by linear interpolation between $12.83 and $35 for each calendar year during such period".Subsec. (b)(1)(A)(ii)(I). Pub. L. 117-169, §13104(b)(2)(A), substituted "$17" for "$50". Subsec. (b)(1)(A)(ii)(II). Pub. L. 117-169, §13104(b)(2)(B), substituted "$12" for "$35".Subsec. (b)(1)(B), (C). Pub. L. 117-169, §13104(c)(1)(B), added subpars. (B) and (C). Former subpar. (B) redesignated (D).Subsec. (b)(1)(D). Pub. L. 117-169, §13104(c)(2)(B), substituted "subparagraph (A), (B), or (C)" for "subparagraph (A)". Pub. L. 117-169, §13104(c)(1)(A), redesignated subpar. (B) as (D).Subsec. (d). Pub. L. 117-169, §13104(a)(1), amended subsec. (d) generally. Prior to amendment, subsec. (d) defined qualified facility.Subsec. (e). Pub. L. 117-169, §13104(a)(2)(A), added pars. (1) and (2) and redesignated former pars. (1) to (3) as (3) to (5), respectively.Subsec. (f)(3). Pub. L. 117-169, §13104(e)(1), struck out par. (3) which had appeared after par. (7) and related to credit reduced for certain tax-exempt bonds.Subsec. (f)(8). Pub. L. 117-169, §13104(e)(2), added par. (8).Subsec. (f)(9). Pub. L. 117-169, §13104(g), added par. (9).Subsec. (g). Pub. L. 117-169, §13104(f), inserted "the earlier of January 1, 2023, and" before "the end of the calendar year" in introductory provisions.Subsecs. (h), (i). Pub. L. 117-169, §13104(d), added subsec. (h) and redesignated former subsec. (h) as (i).Subsec. (i)(3). Pub. L. 117-169, §13104(h), added par. (3).2021-Subsec. (f)(3). Pub. L. 117-58 added par. (3) relating to credit reduced for certain tax-exempt bonds at end of subsec. (f). 2020-Subsec. (d)(1). Pub. L. 116-260 substituted "January 1, 2026" for "January 1, 2024" in introductory provisions. 2018- Pub. L. 115-123 amended section generally. Prior to amendment, section related to credit for carbon dioxide sequestration.2014-Subsec. (d)(2). Pub. L. 113-295 substituted "Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish" for "Administrator of the Environmental Protection Agency the Secretary of Energy, and the Secretary of the Interior,, shall establish". 2009-Subsec. (a)(1)(B). Pub. L. 111-5, §1131(b)(2), inserted "and not used by the taxpayer as described in paragraph (2)(B)" after "storage".Subsec. (a)(2)(C). Pub. L. 111-5, §1131(a), added subpar. (C).Subsec. (d)(2). Pub. L. 111-5, §1131(b)(1), inserted "the Secretary of Energy, and the Secretary of the Interior," after "Environmental Protection Agency" and substituted "paragraph (1)(B) or (2)(C) of subsection (a)" for "subsection (a)(1)(B)" and ", oil and gas reservoirs, and unminable coal seams" for "and unminable coal seems".Subsec. (e). Pub. L. 111-5, §1131(b)(3), substituted "taken into account in accordance with subsection (a)" for "captured and disposed of or used as a tertiary injectant".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2022 AMENDMENT Pub. L. 117-169, §13104(i), Aug. 16, 2022, 136 Stat. 1929, provided that:"(1) IN GENERAL.-Except as provided in paragraphs (2), (3), and (4), the amendments made by this section [amending this section and section 142 of this title] shall apply to facilities or equipment placed in service after December 31, 2022."(2) MODIFICATION OF CARBON OXIDE CAPTURE REQUIREMENTS.-The amendments made by subsection (a) [amending this section and section 142 of this title] shall apply to facilities or equipment the construction of which begins after the date of enactment of this Act [Aug. 16, 2022]."(3) APPLICATION OF SECTION FOR CERTAIN CARBON CAPTURE EQUIPMENT.-The amendments made by subsection (f) [amending this section] shall take effect on the date of enactment of this Act."(4) ELECTION.-The amendments made by subsection (g) [amending this section] shall apply to carbon oxide captured and disposed of after December 31, 2021."
EFFECTIVE DATE OF 2021 AMENDMENT Pub. L. 117-58, div. H, title IV, §80402(f), Nov. 15, 2021, 135 Stat. 1334, provided that: "The amendments made by this section [amending this section and sections 141, 142, and 146 of this title] shall apply to obligations issued after December 31, 2021."
EFFECTIVE DATE OF 2018 AMENDMENT Pub. L. 115-123, div. D, title II, §41119(b), Feb. 9, 2018, 132 Stat. 168, provided that: "The amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2017."
EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113-295 effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009, Pub. L. 111-5, div. B, title I, to which such amendment relates, see section 209(k) of Pub. L. 113-295, set out as a note under section 24 of this title.
EFFECTIVE DATE OF 2009 AMENDMENT Pub. L. 111-5, div. B, title I, §1131(c), Feb. 17, 2009, 123 Stat. 325, provided that: "The amendments made by this section [amending this section] shall apply to carbon dioxide captured after the date of the enactment of this Act [Feb. 17, 2009]."
EFFECTIVE DATESection applicable to carbon dioxide captured after Oct. 3, 2008, see section 115(d) of Pub. L. 110-343, set out as an Effective Date of 2008 Amendment note under section 38 of this title.
INFLATION ADJUSTED ITEMS FOR CERTAIN YEARSProvisions relating to inflation adjustment of items in this section for certain years were contained in the following: 2023-Internal Revenue Notice 2023-46. 2022-Internal Revenue Notice 2022-38. 2021-Internal Revenue Notice 2021-35. 2020-Internal Revenue Notice 2020-40. 2019-Internal Revenue Notice 2019-31. 2018-Internal Revenue Notice 2018-40. 2017-Internal Revenue Notice 2017-32. 2016-Internal Revenue Notice 2016-53. 2015-Internal Revenue Notice 2015-44. 2014-Internal Revenue Notice 2014-40. 2013-Internal Revenue Notice 2013-34. 2012-Internal Revenue Notice 2012-42. 2011-Internal Revenue Notice 2011-50. 2010-Internal Revenue Notice 2010-75.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- taxpayer
- The term "taxpayer" means any person subject to any internal revenue tax.