NEW BILL WOULD EXPAND TAX BENEFITS TO CCS, CLEAN ENERGY PROJECTS

Tamar Hallerman
GHG Monitor
4/26/13

A bipartisan group of lawmakers reintroduced legislation this week that would provide carbon capture and storage and other clean energy projects with access to a corporate tax structure traditionally reserved for fossil fuel projects. Lawmakers introduced the “Master Limited Partnerships Parity Act” in both chambers of the U.S. Congress on April 24, bringing forward legislation they said would “level the playing field” for clean energy technologies and spur new private investment. “Master Limited Partnerships have a proven record of success,” Senate co-sponsor Jerry Moran (R-Kan.) said in a statement. “Expanding the eligibility to emerging technologies will provide Americans with access to increased investment opportunities as well as the energy these entities will create.” Essentially an expanded version of a measure introduced in the Senate in 2012, this year’s bill aims to widen the scope of eligible energy technologies to include CCS, as well as biochemicals, waste-heat-to-power and other clean energy technologies,  in addition to the renewable power generation and biofuels projects that were included last year.

Master Limited Partnerships are a decades-old corporate structure whose tax advantage is currently available only to investors in oil, natural gas, coal extraction and pipeline projects. The classification combines the funding advantages of corporations with the tax benefits of partnerships, supporters said. Eligible projects would be taxed like a partnership, but the ownership interests are traded like corporate stock on a market. “These projects get access to capital at a lower cost and are more liquid than traditional financing approaches to energy projects, making them highly effective at attracting private investment,” the office of co-sponsor Sen. Chris Coons (D-Del.) said in a fact sheet. The legislation says that CCS projects, as well as coal gasification projects that store at least 75 percent of carbon emissions, would be eligible for the tax structure.