Regardless of which party wins next week’s presidential election, reforming the 45Q carbon sequestration tax credit should be a priority, according to the National Enhanced Oil Recovery Initiative. The group sent memos Tuesday to the transition teams of both Democratic nominee Hillary Clinton and Republican nominee Donald Trump making a case for updating the tax credit. “The existing Section 45Q Tax Credit for Carbon Dioxide Sequestration has essentially expired and must be extended,” the group wrote in both memos.
The 45Q program is due to expire once credits worth 75 million tons have been used. Credits representing 44,590,130 metric tons, or roughly 60 percent of the authorized amount, have already been claimed, according to NEORI. Beyond extending the credit, the value of the credit should be increased, the memos argue. “Given what is known about the cost of carbon capture and the fact that CO2 capture technology remains costly for most industries, the current $10 per ton value of 45Q needs to increase to $35 to help cover the gap between the cost of carbon capture and revenue earned from selling CO2 for use in EOR,” the memos say.
The memos for each camp were very similar though not identical. The Democratic team received a memo noting the climate benefits of CO2-EOR while the Republican memo included more background on CO2-EOR. Each memo included a section of frequently asked questions. The first listed on the Republican memo is “What is CO2-EOR?” while the first on the Democratic memo is “Why is carbon capture important in addressing climate change?”
