OMB No. 1545-2132 8933 Carbon Dioxide Sequestration Credit Form

Department of the Treasury

Internal Revenue Service

Attachment

Sequence No. 165

© Attach to your tax return.

Name(s) shown on return Identifying number

2010

Metric tons captured and disposed of (see instructions) 

Metric tons captured and used (see instructions)

Carbon dioxide sequestration credit from partnerships and S corporations

Add lines 1c, 2c, and 3. Partnerships and S corporations, report this amount on Schedule K, all 

others, report this amount on Form 3800, line 1x

1a

2a

3

4

1c

2c

3

4

Definitions

General Instructions

Section references are to the Internal Revenue Code.

Purpose of Form

Use Form 8933 to claim the carbon dioxide sequestration credit.

The credit is allowed for qualified carbon dioxide that is captured

and disposed of or captured, used, and disposed of by the

taxpayer in secure geological storage. Only carbon dioxide

captured and disposed of or used as a tertiary injectant within

the United States or a U.S. possession is taken into account

when figuring the credit. See Definitions, below.

Qualified carbon dioxide captured at a qualified facility, disposed of in secure geological

storage, and not used as a tertiary injectant in a qualified enhanced oil or natural gas

recovery project.

Qualified carbon dioxide captured at a qualified facility, disposed of in secure geological

storage, and used as a tertiary injectant in a qualified enhanced oil or natural gas recovery 

project.

Taxpayers other than partnerships or S corporations whose

only source of this credit is from those pass-through entities

(other than a partnership with a valid 761(a) election) are not

required to complete or file this form. Instead, report this credit

directly on line 1x of Form 3800, General Business Credit.

Qualified carbon dioxide is carbon dioxide captured after

October 3, 2008, from an industrial source that:

Qualified Carbon Dioxide

How To Figure the Credit

Generally, the credit is $20 (adjusted for inflation) per metric ton

for qualified carbon dioxide captured at a qualified facility,

disposed of in secure geological storage, and not used as a

tertiary injectant in a qualified enhanced oil or natural gas

recovery project.

Generally, the credit is $10 (adjusted for inflation) per metric

ton for qualified carbon dioxide captured at a qualified facility,

used as a tertiary injectant in a qualified enhanced oil or natural

gas recovery project, and disposed of in secure geological

storage.

For the purposes of this form, a partner in a partnership that

has made a valid section 761(a) election will be considered the

taxpayer. Partnerships with valid section 761(a) elections are not

required to complete or file this form. Instead, the partner is

required to complete and file this form in a manner

commensurate with its undivided ownership interest in the

qualified facility.

Qualified carbon dioxide also includes the initial deposit of

captured carbon dioxide used as a tertiary injectant. However, it

does not include carbon dioxide that is re-captured, recycled, or

otherwise re-injected as part of the enhanced oil and natural gas

recovery process.

● Would otherwise be released into the atmosphere as industrial

emission of greenhouse gas, and

● Is measured at the source of capture and verified at the point

of disposal or injection.

For 2010, the $20 and $10 rates are adjusted for inflation.

Qualified carbon dioxide does not include carbon dioxide that

is captured and sequestered in a project to the extent required

under an agreement executed with the IRS under the qualifying

advanced coal project program of section 48A or the qualifying

gasification project program of section 48B.

For the purpose of calculating the credit, a metric ton of

carbon dioxide includes only the contained weight of the carbon

dioxide. The weight of any other substances, such as water or

impurities, is not included in the calculation.

Inflation–adjusted credit rate 

Multiply line 2a by line 2b 

Multiply line 1a by line 1b 

b Inflation–adjusted credit rate 

c

b

c

Inflation Adjustment

$20.24

$10.12

The 2010 credit rates are:

● $10.12 for qualified carbon dioxide captured at a qualified

facility, disposed of in secure geological storage, and used as a

tertiary injectant in a qualified enhanced oil or natural gas

recovery project.

● $20.24 for qualified carbon dioxide captured at a qualified

facility, disposed of in secure geological storage, and not used

as a tertiary injectant in a qualified enhanced oil or natural gas

recovery project; and

For more details, see Notice 2010-75, 2010-48 I.R.B. 781,

available at www.irs.gov/irb/2010-48_IRB/ar07.html.

Qualified Facility

A qualified facility is any industrial facility that is owned by the

taxpayer where carbon capture equipment is placed in service
Form 8933 (2010) Page 2

Paperwork Reduction Act Notice. We ask for the information

on this form to carry out the Internal Revenue laws of the United

States. You are required to give us the information. We need it

to ensure that you are complying with these laws and to allow us

to figure and collect the right amount of tax.

The time needed to complete and file this form will vary

depending on individual circumstances. The estimated burden

for individual taxpayers filing this form is approved under OMB

control number 1545-0074 and is included in the estimates

shown in the instructions for their individual income tax return.

The estimated burden for all other taxpayers who file this form is

shown below.

If you have comments concerning the accuracy of these time

estimates or suggestions for making this form simpler, we would

be happy to hear from you. See the instructions for the tax

return with which this form is filed.

Recordkeeping 1 hr., 54 min.

Learning about the law or the form 6 min.

Preparing and sending the form

to the IRS 7 min.

Line 2

Enter the metric tons of qualified carbon dioxide captured at a

qualified facility, used as a tertiary injectant in a qualified enhanced

oil or natural gas recovery project, and disposed of in secure

geological storage. Then, multiply the metric tons entered by

$10.12.

You are not required to provide the information requested on

a form that is subject to the Paperwork Reduction Act unless the

form displays a valid OMB control number. Books or records

relating to a form or its instructions must be retained as long as

their contents may become material in the administration of any

Internal Revenue law. Generally, tax returns and return

information are confidential, as required by section 6103.

Specific Instructions

Line 1

Enter the metric tons of qualified carbon dioxide captured at a

qualified facility, disposed of in secure geological storage, and not

used as a tertiary injectant in a qualified enhanced oil or natural gas

recovery project. Then, multiply the metric tons entered by $20.24.

Who Can Take the Credit

Generally, the credit is allowed to the person that captures and

physically or contractually ensures the disposal of or the use as

a tertiary injectant of the qualified carbon dioxide.

United States and U.S. Possessions

This includes the seabed and subsoil of those submarine areas

that are adjacent to the territorial waters of the United States (or

a U.S. possession) and over which the United States has

exclusive rights according to international law with respect to the

exploration and exploitation of natural resources.

See Notice 2009-83, 2009-44 I.R.B. 588, for more information

on secure geological storage. Notice 2009-83 is available at

www.irs.gov/irb/2009-44_IRB/ar11.html.

Qualified Enhanced Oil or Natural Gas Recovery Project

A qualified enhanced oil or natural gas recovery project means

any project located in the United States involving the application

of one or more tertiary recovery methods defined in section

193(b)(3) that can reasonably be expected to result in more than

an insignificant increase in the amount of crude oil or natural gas

that will ultimately be recovered and with respect to which the

first injection of liquids, gases, or other matter commences after

1990. The project will not be treated as a qualified enhanced

crude oil or natural gas recovery project unless the operator

submits to the IRS a certification from a petroleum engineer that

the project meets (and continues to meet) these requirements.

Tertiary Injectant

This is an injectant (other than a hydrocarbon injectant that is

recoverable) that is used as part of a tertiary recovery method.

For more details, see section 193(b).

See Notice 2009-83 for the annual report that is required if the

credit is claimed.

In order to claim the credit, the amount of carbon dioxide must be

measured at the source of capture and verified either at the point of

disposal in secure geological storage or at the point of injection as

a tertiary injectant in an enhanced oil or natural gas recovery

project. The amount of qualified carbon dioxide is presumed to be

the lesser of the amount measured at capture and the amount

verified at disposal or injection, unless it can be established to the

satisfaction of the IRS that the greater amount is the correct

amount.

Industrial Facility

An industrial facility is a facility that produces a carbon dioxide

stream from a fuel combustion source, a manufacturing process,

or a fugitive carbon dioxide emission source that, absent capture

and disposal, would otherwise be released into the atmosphere

as industrial emission of greenhouse gas. An industrial facility

does not include a facility that produces carbon dioxide from

carbon dioxide production wells at natural

carbon-dioxide-bearing formations.

This includes storage at deep saline formations, oil and gas

reservoirs, and unminable coal seams under such conditions as

the IRS may determine under regulations.

Secure Geological Storage

and that captures at least 500,000 metric tons of carbon dioxide

during the tax year.