McKinley, Veasey Introduce Bipartisan Legislation to Spur Development of Carbon Capture Projects
Today, U.S. Representatives David B. McKinley, P.E., (W.Va.-1) and Marc Veasey (TX-33) introduced 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 oxide sequestration by ten years. It also provides a direct pay elective for the full value of the tax credit, which makes it more useful for project 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 and allowing developers upfront access to the full value of the credit, the ACCESS 45Q Act provides the long-term certainty that the U.S. needs to build carbon capture projects and reduce carbon emissions.
"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 Congressman Marc Veasey (TX-33). "The expansions in the ACCESS 45Q Act 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."
"Congress took a major step forward two years ago to promote carbon capture, utilization, and storage (CCUS) when it reformed the Section 45Q tax credit, but a delay in issuing implementing regulations combined with the effects of the pandemic have stalled private investment in projects. Extending the commence construction deadline and implementing a direct payment mechanism for the credit would provide necessary certainty for project developers to access project financing at a time when the economy will limit tax liability. This legislation will ensure the availability of the credit as intended by Congress and will enable full monetization of the tax credits for project finance and 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.
"The ACCESS 45Q Act combines the Carbon Capture Coalition's top two legislative priorities of direct pay and a multiyear extension of the 45Q tax credit, both of which are urgently needed to stimulate private investment and prevent the cancellation of important carbon capture, removal, use and geologic storage projects in various stages of development. The 80-plus companies, unions and NGOs in the Coalition applaud the continued bipartisan leadership of Representatives McKinley, Veasey and others and their efforts to advance legislation to provide project developers and investors with the financial certainty to move forward with large-scale, capital-intensive projects that require years to plan, engineer, permit and finance. The development of these carbon capture projects will help put the U.S. on a path to achieving midcentury climate goals, while spurring investment and creating high-wage jobs for American workers and their communities in the near term as they seek to recover from the COVID-19 pandemic," said Brad Crabtree, Executive Director of the Carbon Capture Coalition.
"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.
"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," stated a CCS Institute report released on December 1st, 2020. To read the report, click here.
Representatives Kelly Armstrong, Jack Bergman, Cheri Bustos, Mike Doyle, Lizzie Fletcher, and Alex Mooney also joined as original cosponsors of this bill.
McKinley has been leading the fight to reauthorize the carbon capture tax credit.
In 2019, he co-sponsored a bipartisan letter to the U.S. Department of Treasury urging them to issue interim guidance so that project developers can begin utilizing the 45Q tax credit without further delay.
In 2017, he was a lead co-sponsor of the Carbon Capture Act (H.R. 3721), which was inserted into the bipartisan budget agreement, which expanded the existing tax credit for carbon capture and make it more appealing. As the House and Senate debated whether to include tax extenders in the bipartisan budget agreement, McKinley:
o Led a bipartisan letter to House leadership and the House Committee on Ways and Means, urging them to include 45Q in any package.
o Sent an "Action Alert" to Coal Caucus members.
o Reached out to Majority Leader Kevin McCarthy (R-CA) about including 45Q.
o Spoke during a Republican Conference meeting about 45Q and talked directly to Ways and Means Chairman Kevin Brady (R-TX) about the importance of maintaining it.
Because of McKinley's leadership on the issue, the 45Q tax credit was included as part of the bipartisan budget agreement.