McKinley, Veasey Reintroduce Bipartisan Legislation to Spur Development of Carbon Capture Projects
Bipartisan ACCESS Bill Enhances 45Q Tax Credit for Carbon Capture Utilization and Storage
Washington, D.C. - U.S. Representatives David B. McKinley, P.E., (R-W.Va.) and Marc Veasey (D-TX) reintroduced the Accelerating Carbon Capture and Extending Secure Storage through 45Q (ACCESS 45Q) Act. This bipartisan legislation extends the date for projects to begin construction to claim the 45Q tax credit for carbon dioxide sequestration by ten years. It also tweaks the tax credit to make it more attractive to developers.
The COVID-19 pandemic has hurt the U.S. energy sector and slowed the development of carbon capture projects. By extending the eligible date for projects to begin construction, allowing developers upfront access to the full value of the credit, and opening up financing opportunities to those companies with an international reach, the ACCESS 45Q Act provides the long-term certainty that the U.S. needs to build carbon capture projects and reduce carbon emissions as the U.S. regains its position as a global energy leader.
“As we seek to recover from the COVID-19 pandemic and regain our position as a global energy leader, we must do everything we can to encourage innovation and develop clean energy technologies like carbon capture,” said Rep. McKinley. “The 45Q tax credit is the single-most useful tool in spurring the development of carbon capture projects. This bill will lead to more projects and more widespread adoption, which is critical to reduce emissions and preserve the future of coal and natural gas.”
“This bipartisan legislation builds off our previous work to expand the 45Q tax credit and provides the certainty needed to develop carbon capture projects and use our energy resources in the cleanest way possible,” added Rep. McKinley.
“The 45Q Tax Credit was a critical step forward in advancing our nation’s green economy,” said Rep. Marc Veasey (TX-33). “With the ACCESS 45Q Act, we are building on the enhancements to the credit that were included in the Energy Act that Congress passed into law in December. The expansions in this bill will help us meet our nation’s goals to curb climate change by enhancing incentives for business and bolstering the young and growing carbon capture industry.”
“Investment in the energy infrastructure of the future is critical to boost economic recovery after the impact of the COVID-19 pandemic. Carbon capture, utilization, and storage (CCUS) projects have a unique and irreplaceable role in that future, helping to decarbonize the electric power and industrial sectors consistent with global and domestic emissions reduction objectives while maintaining and creating good-paying jobs. The ACCESS 45Q Act would help to enable CCUS project deployment by extending the commence construction deadline under the Section 45Q tax credit and implementing a direct payment mechanism for the credit that would provide necessary certainty for project developers to access project financing at a time when tax liability is limited. The bill would also revise language from the 2017 Tax Cuts and Jobs Act that will encourage future investment in CCUS projects. This legislation would ensure the availability of the credit as intended by Congress and enable full monetization of the tax credits for project finance, and it represents a necessary step to further advance CCUS projects in the United States. CURC applauds Congressmen McKinley and Veasey for their continued leadership,” said Shannon Angielski, Executive Director of the Carbon Utilization Research Council (CURC).
“The combination of direct pay and a ten-year extension for 45Q in the ACCESS 45Q Act would help ensure that the more than 30 publicly-announced carbon capture, direct air capture and geologic storage projects in the U.S. continue to move forward and avoid cancelation, as well as spur development of the many more projects needed to achieve net-zero emissions economywide by 2050. This legislation should be considered as part of any major first 100 days legislative package to foster critical climate investments, while creating high-wage jobs for American workers and their communities as they seek to recover from the COVID-19 pandemic,” said Brad Crabtree, Executive Director of the Carbon Capture Coalition
“The ACCESS 45Q Act enhances the bipartisan 45Q tax credit for carbon capture projects by providing longer term certainty and improving its relevance to a wider range of prospective developers. The extension and direct payment option of this tax credit will provide much needed regulatory certainty that project developers require to make significant investment decisions. This bill comes at an ideal time to support clean energy investments, as it would provide significant economic benefits to communities across the country and environmental benefits in the form of reduced carbon emissions,” said Rich Powell, Executive Director of Clearpath Action.
“Reps. Veasey and McKinley’s ACCESS Act will provide the financing and investment certainty needed to deploy carbon capture and direct air capture technologies creating new U.S. jobs and boosting economic growth while lowering emissions”, said Michele Stockwell, Executive Director, BPC Action.
“We are grateful for Congressmen McKinley and Veasey championing carbon capture, removal, and storage, and are pleased to see this important bill being reintroduced early in this new Congress. The passage of 45Q has led to the announcement of more than 30 carbon capture projects in industry, power, and carbon removal. This new 45Q optimization will not only help these planned projects to be built, but would also allow 45Q to spur further deployment – which is particularly important for hard-to-abate sectors like steel and cement,” said Lee Beck, CCUS Policy Innovation Director for Clean Air Task Force”
“There is a consensus among international experts that a massive increase in the deployment of carbon capture technology is needed to meaningfully reduce global emissions. That simply will not happen here in the U.S. without smart legislation like Rep. McKinley’s ACCESS 45Q, which builds on the existing broad bipartisan Congressional support for carbon capture utilization and storage,” said the National Mining Association.
A recent report by CCS institute stated, “U.S. involvement in 12 of the 17 new facilities in 2020 is largely due to the enhanced 45Q tax credit signed into law in 2018, with the Internal Revenue Service issuing more detailed guidance in 2020.” To read the report, click here.
The International Energy Agency has also supported the use of carbon capture, utilization, and storage (CCUS) as a pathway towards net-zero carbon dioxide emissions claiming that “reaching net zero will be virtually impossible without CCUS.” To read the report, click here.
McKinley has been leading the fight to reauthorize the carbon capture tax credit.