Income Tax Regulations — (a)
Property that is part of a CCUS project of a taxpayer and that is (a) equipment, other than excluded CCUS equipment, that (i) is to be used solely for capturing carbon dioxide (A) that would otherwise be released into the atmosphere, or (B) directly from the ambient air, (ii) prepares or compresses captured carbon for transportation, (iii) generates or distributes electrical energy, heat energy or a combination of electrical and heat energy, that directly and solely supports a qualified CCUS project, unless the equipment uses fossil fuels and emits carbon dioxide that is not subject to capture by a qualified CCUS project, and, for greater certainty, not including equipment that (A) supports the qualified CCUS project indirectly by way of an electrical utility grid, or (B) expands the capacity of existing equipment that supports the qualified CCUS project and that distributes electrical energy, heat energy or a combination of electrical and heat energy, (iv) is equipment that solely supports a qualified CCUS project and transmits electrical energy from electrical generation equipment described in subparagraph (iii) to the qualified CCUS project, or (v) delivers, collects, recovers, treats or recirculates water, or a combination of any of those activities, that solely supports a qualified CCUS project; (b) equipment that is to be used solely for transportation of captured carbon, including equipment used for the transportation system safety and integrity; (c) equipment that is to be used solely for storage of captured carbon in a geological formation, including equipment used for the storage system safety and integrity, but not including equipment used for enhanced oil recovery; (d) property that is physically and functionally integrated with the equipment described in any of paragraphs (a) to (c) (for greater certainty, excluding construction equipment, furniture, office equipment and vehicles) and that is ancillary equipment used solely to support the functioning of equipment described in any of paragraphs (a) to (c) within a CCUS process as part of (i) an electrical system, (ii) a fuel supply system, (iii) a liquid delivery and distribution system, (iv) a cooling system, (v) a process material storage and handling and distribution system, (vi) a process venting system, (vii) a process waste management system, or (viii) a utility air or nitrogen distribution system; (e) equipment used for system safety and integrity or as part of a control or monitoring system solely to support the equipment described in any of paragraphs (a) to (d); or (f) a building or other structure all or substantially all of which is used, or to be used, for the installation or operation of equipment described in any of paragraphs (a) to (e); or (g) property that is (i) incorporated into another property that would not otherwise be described in any of paragraphs (a) to (f) if the incorporation causes the other property to satisfy the description in any of paragraphs (a) to (f), or (ii) used solely to refurbish property described in any of paragraphs (a) to (f) that is part of a CCUS project of the taxpayer. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] 2024, c. 15, s. 95 2024, c. 17, s. 80 2026, c. 3, s. 118