### Internal Revenue Bulletin: 2015-26

June 29, 2015 Notice 2015–44 Credit for Carbon Dioxide Sequestration 2015 Sectio n 45Q Inflation Adjustment Factor Table of Contents

• SECTION 1. PURPOSE • SECTION 2. BACKGROUND • SECTION 3. INFLATION ADJUSTMENT FACTOR • SECTION 4. TAX CREDIT UTILIZATION • SECTION 5. DRAFTING INFORMATION 

### SECTION 1. PURPOSE This notice publishes the inflation adjustment fact or for the credit for carbon dioxide (CO 2 ) sequestration under § 45Q of the Internal Revenue Code (§ 45Q credit) for calendar year 2015. The inflation adjustment factor is used to de termine the amount of the credit allowable under § 45Q. This notice also publishes the aggregate amoun t of qualified CO 2 taken into account for purposes of § 45Q. 

### SECTION 2. BACKGROUND Section 45Q(a)(1) allows a credit of $20 per metricton of qualified CO 2 that is captured by the taxpayer at a qualified fa cility, disposed of by the taxpayer in secure geolo gical storage, and not used by the taxpayer as a tertiary injectan t. Section 45Q(a)(2) allows a credit of $10 per met ric ton of qualified CO 2 that is captured by the taxpayer at a qualified fa cility, used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project, a nd disposed of by the taxpayer in secure geological storage. Section 45Q(b)(1) defines the term “qualified carbo n dioxide” as CO 2 captured from an industrial source that would othe rwise be released into the atmosphere as industrial emission of greenhouse gas, and that is measured at the source of capture and verified at the point of disposal or injection. Qualified CO 2 includes the initial deposit of captured CO 2 used as a tertiary injectant but does not include CO 2 that is re-captured, recycled, or otherwise re-inje cted as part of the enhanced oil and natural gas re covery process. Section 45Q(c) defines the term “qualified facility ” as an industrial facility that is owned by the ta xpayer, where carbon capture equipment is placed in service, and where at least 500,000 metric tons of CO 2 is captured during the taxable year. Section 45Q(d)(2) provides that the Secretary, in c onsultation with the Administrator of the Environme ntal Protection Agency (EPA), the Secretary of Energy, and the Secretary of the Interior, shall establish regulations for determini ng adequate security measures for the geological st orage of CO 2under § 45Q(a)(1)(B) or (a)(2)(C) such that the CO 2does not escape into the atmosphere. See section 5 of Notice 2009–8 3, 2009–2 C.B. 588, for procedures regarding secure geological storage. Section 45Q(d)(5) allows the § 45Q credit to the pe rson that captures and physically or contractually ensures the disposal of or the use as a tertiary injectant of the qualified CO 2 . Under § 45Q(d)(7), for taxable years beginning in a calendar year after 2009, the dollar amount contai ned in § 45Q(a) must be adjusted for inflation by m ultiplying such dollar amount by the inflation adjustment factor for such calenda r year determined under § 43(b)(3)(B), determined b y substituting “2008” for “1990.” Section 43(b)(3)(B) defines the term “inflation adj ustment factor” as, with respect to any calendar ye ar, a fraction the numerator of which is the GNP im plicit price deflator for the preceding calendar year and the denominator of whic h is the GNP implicit price deflator for 1990. For purposes of § 45Q(d)(7), with respect to 2015 calen dar year, the inflation adjustment factor is a fraction the numerator of wh ich is the GNP implicit price deflator for 2014 (10 8.407) and the denominator of which is the GNP impl icit price deflator for 2008 (99.239). Section 45Q(e) provides that the § 45Q credit will apply with respect to qualified CO 2 before the end of the calendar year in which the S ecretary, in consultation with the EPA, certifies that 75,000,000 metric tons of qualified CO 2 have been taken into account in accordance with § 4 5Q(a). 

### SECTION 3. INFLATION ADJUSTMENT FACTOR The inflation adjustment factor for calendar year 2 015 is 1.0924. The § 45Q credit for calendar year 2 015 is $21.85 per metric ton of qualified CO 2 under § 45Q(a)(1) and $10.92 per metric ton of qualified CO 2under § 45Q(a)(2). 

### SECTION 4. TAX CREDIT UTILIZATION Section 6 of Notice 2009–83 requires taxpayers to f ile annual reports that provide (among other inform ation) the amounts (in metric tons) of qualified CO 2 for the taxable year that has been taken into account for purposes of claiming th e § 45Q credit. The annual reports must be filed wi th the Service not later than the last day of the s econd calendar month following the month during which the tax return on which the § 45Q credit is claimed was due (including extensio ns). Based on the annual reports filed with the Service as of June 9, 2015, the aggregate amount of qualifi ed CO 2 taken into account for purposes of § 45Q is 34,934, 796 metric tons. 

### SECTION 5. DRAFTING INFORMATION The principal author of this notice is Jennifer C. Bernardini of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further i nformation regarding this notice contact Ms. Bernardini on (202) 317-6853 (not a toll-free number). 

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