McKinley Introduces Bipartisan Bill to Promote Clean Coal
Carbon Capture Modernization Act Makes Clean Coal Tax Credit More Attractive
WASHINGTON, D.C. -Congressmen David B. McKinley P.E. (R-W.Va.) and Collin C. Peterson (D-Minn.) introduced the Carbon Capture Modernization Act (H.R. 1796), which will enable businesses to finally take advantage of the Section 48A tax credit for clean coal facilities by creating more realistic requirements to qualify.
This legislation would modernize the 48A tax credit’s performance and efficiency standards to reflect the capabilities of existing technology. This will help promote the adoption of CCS technology and reduce emissions. Click here to read the full text of the bill.
“America must continue to advocate for an innovation-focused approach to lower emissions. Modernizing the 48A tax credit is just one more way to do that. Our bill will expand the use of CCS technology on existing coal facilities across the country,” Rep. McKinley said. “This bipartisan legislation builds off our work in the last Congress to increase tax credits for carbon capture technology and will allow us to use all of our energy resources for years to come.”
“I am proud of this bipartisan legislation which is an investment in innovative carbon capture technology,” Rep. Peterson said. “I look forward to seeing carbon capture and sequestration projects get up and running. I have always believed that clean coal is an important part of an all-of-the-above energy strategy for our country.”
The Section 48A tax credit was first established in 2005, and carbon capture projects were made eligible in 2008. However, the eligibility standards for the credit are not technically or economically feasible for carbon capture and storage (CCS) retrofit projects.
When Congress modified this provision in 2008 to include existing coal power plants, they also imposed a new requirement to capture and store at least 65% of the CO2 in order to be eligible for the tax incentive. This requirement is too stringent and unrealistic for retrofit applications. Due too these unattainable requirements nearly $2 billion worth of credits have gone unused.
In addition to McKinley and Peterson, the legislation introduced today is cosponsored by Reps. Kelly Armstrong (R-N.D.), Greg Gianforte (R-Mont.), Alex Mooney (R-W.Va.) Terri Sewell (D-Ala.), Peter Stauber (R-Minn.) and Marc Veasey (D-Texas).
McKinley lead the fight to reauthorize the carbon capture tax credit. He previously was a lead co-sponsor of the Carbon Capture Act (H.R. 3721), which was inserted into the bipartisan budget agreement to expand the existing tax credit for carbon capture and make it more appealing. The 45Q grants a tax incentive to energy and industrial companies that store carbon dioxide through a set of technologies commonly known as carbon capture and sequestration (CCS), rather than releasing the carbon into the atmosphere.
The expansion of the tax credit included was included in the bipartisan budget agreement increases the dollar amount of the credit from $20 to $50 for captured carbon that is stored underground, and from $10 to $25 for captured carbon that is used for enhanced oil recovery. The credit also removed a 75 million metric ton cap, which has hampered the development of new carbon capture projects.
The Carbon Capture Modernization Act is endorsed by: