26 U.S.C. § 45Q (INTERNAL REVENUE CODE)
§ 45Q. Credit for carbon dioxide sequestration
(a) General rule
For purposes of section 38, the carbon dioxide sequestration credit for any taxable year is an amount equal to the sum of—
(1) $20 per metric ton of qualified carbon dioxide which is—
(A) captured by the taxpayer at a qualified facility, and
(B) disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in paragraph (2)(B), and
(2) $10 per metric ton of qualified carbon dioxide which is—
(A) captured by the taxpayer at a qualified facility,
(B) used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project, and
(C) disposed of by the taxpayer in secure geological storage.
(b) Qualified carbon dioxide
For purposes of this section—
(1) In general
The term “qualified carbon dioxide” means carbon dioxide captured from an industrial source which—
(A) would otherwise be released into the atmosphere as industrial emission of greenhouse gas, and
(B) is measured at the source of capture and verified at the point of disposal or injection.
(2) Recycled carbon dioxide
The term “qualified carbon dioxide” includes the initial deposit of captured carbon dioxide used as a tertiary injectant. Such term does not include carbon dioxide that is re-captured, recycled, and re-injected as part of the enhanced oil and natural gas recovery process.
(c) Qualified facility
For purposes of this section, the term “qualified facility” means any industrial facility—
(1) which is owned by the taxpayer,
(2) at which carbon capture equipment is placed in service, and
(3) which captures not less than 500,000 metric tons of carbon dioxide during the taxable year.
(d) Special rules and other definitions
For purposes of this section—
(1) Only carbon dioxide captured and disposed of or used within the United States taken into account
The credit under this section shall apply only with respect to qualified carbon dioxide the capture and disposal or use of which is within—
(A) the United States (within the meaning of section 638(1)), or
(B) a possession of the United States (within the meaning of section 638(2)).
(2) Secure geological storage
The Secretary, in consultation with the Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish regulations for determining adequate security measures for the geological storage of carbon dioxide under paragraph (1)(B) or (2)(C) of subsection (a) such that the carbon dioxide does not escape into the atmosphere. Such term shall include storage at deep saline formations, oil and gas reservoirs, and unminable coal seams under such conditions as the Secretary may determine under such regulations.
(3) Tertiary injectant
The term “tertiary injectant” has the same meaning as when used within section 193(b)(1).
(4) Qualified enhanced oil or natural gas recovery project
The term “qualified enhanced oil or natural gas recovery project” has the meaning given the term “qualified enhanced oil recovery project” by section 43(c)(2), by substituting “crude oil or natural gas” for “crude oil” in subparagraph (A)(i) thereof.
(5) Credit attributable to taxpayer
Any credit under this section shall be attributable 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, except to the extent provided in regulations prescribed by the Secretary.
(6) Recapture
The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any qualified carbon dioxide which ceases to be captured, disposed of, or used as a tertiary injectant in a manner consistent with the requirements of this section.
(7) Inflation adjustment
In the case of any taxable year beginning in a calendar year after 2009, there shall be substituted for each dollar amount contained in subsection (a) an amount equal to the product of—
(A) such dollar amount, multiplied by
(B) the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting “2008” for “1990”.
(e) Application of section
The credit under this section shall apply with respect to qualified carbon dioxide before the end of the calendar year in which the Secretary, in consultation with the Administrator of the Environmental Protection Agency, certifies that 75,000,000 metric tons of qualified carbon dioxide have been taken into account in accordance with subsection (a).
(Added Pub. L. 110–343, div. B, title I, § 115(a), Oct. 3, 2008, 122 Stat. 3829; amended Pub. L. 111–5, div. B, title I, § 1131(a), (b), Feb. 17, 2009, 123 Stat. 325; Pub. L. 113–295, div. A, title II, § 209(j)(1), Dec. 19, 2014, 128 Stat. 4030.)
heading: Inflation Adjusted Items for Certain Tax Years
text: For inflation adjustment of certain items in this section, see Internal Revenue Notices listed in a table below.
heading: Amendments
text: 2014—Subsec. (d)(2). Pub. L. 113–295 substituted “Administrator of the Environmental Protection Agency, the Secretary of Energy, and the Secretary of the Interior, shall establish” for “Administrator of the Environmental Protection Agency the Secretary of Energy, and the Secretary of the Interior,, shall establish”.
2009—Subsec. (a)(1)(B). Pub. L. 111–5, § 1131(b)(2), inserted “and not used by the taxpayer as described in paragraph (2)(B)” after “storage”.
Subsec. (a)(2)(C). Pub. L. 111–5, § 1131(a), added subpar. (C).
Subsec. (d)(2). Pub. L. 111–5, § 1131(b)(1), inserted “the Secretary of Energy, and the Secretary of the Interior,” after “Environmental Protection Agency” and substituted “paragraph (1)(B) or (2)(C) of subsection (a)” for “subsection (a)(1)(B)” and “, oil and gas reservoirs, and unminable coal seams” for “and unminable coal seems”.
Subsec. (e). Pub. L. 111–5, § 1131(b)(3), substituted “taken into account in accordance with subsection (a)” for “captured and disposed of or used as a tertiary injectant”.
heading: Effective Date of 2014 Amendment
text: Amendment by Pub. L. 113–295 effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009, Pub. L. 111–5, div. B, title I, to which such amendment relates, see section 209(k) of Pub. L. 113–295, set out as a note under section 24 of this title.
heading: Effective Date of 2009 Amendment
text: Pub. L. 111–5, div. B, title I, § 1131(c), Feb. 17, 2009, 123 Stat. 325, provided that: “The amendments made by this section [amending this section] shall apply to carbon dioxide captured after the date of the enactment of this Act [Feb. 17, 2009].”
heading: Effective Date
text: Section applicable to carbon dioxide captured after Oct. 3, 2008, see section 115(d) of Pub. L. 110–343, set out as an Effective Date of 2008 Amendment note under section 38 of this title.
heading: Inflation Adjusted Items for Certain Years
text: Provisions relating to inflation adjustment of items in this section for certain years were contained in the following:
2014—Internal Revenue Notice 2014–40.
2013—Internal Revenue Notice 2013–34.
2012—Internal Revenue Notice 2012—42.
2011—Internal Revenue Notice 2011–50.
2010—Internal Revenue Notice 2010–75.