Washington, D.C. – U.S. Senators Sheldon Whitehouse (D-RI) and Bill Cassidy (R-LA) today introduced the Captured Carbon Utilization Parity Act, a bill intended to create parity between the credit value for utilization and sequestration in the 45Q carbon capture tax credit.
“While we’ve made progress on lowering emissions with the Inflation Reduction Act, the world is on track to well overshoot the climate goals of the Paris Agreement. We are going to need robust investment in both carbon utilization and sequestration to lead the planet to safety, said Whitehouse. “Our bipartisan Carbon Capture and Utilization Parity Act would bring the value of the tax credits for carbon utilization in line with the incentives for sequestration, while supporting continued investment in carbon-neutral products.”
Carbon capture and utilization is a broad term used to describe the many different ways that captured carbon oxides can be used or recycled to produce carbon-neutral products or services that today mostly come from fossil fuels.
The Carbon Capture and Utilization Parity Act of 2023 would increase the tax credit for carbon capture and utilization to match the incentives for carbon capture and sequestration for both direct air capture and the power and industrial sectors.
The Carbon Capture and Utilization Parity Act would:
- Establish parity between 45Q carbon capture tax credits for utilization and sequestration.
- Carbon capture from both point source and direct air capture technologies has the potential to contribute to emissions reduction targets, help decarbonize certain sectors, and create zero or negative-carbon products. The Carbon Capture and Utilization Parity Act would:
- Increase the value for direct air capture utilization to $180/metric ton; and
- Increase the value for power and industrial sector utilization to $85/metric ton.
- Carbon capture from both point source and direct air capture technologies has the potential to contribute to emissions reduction targets, help decarbonize certain sectors, and create zero or negative-carbon products. The Carbon Capture and Utilization Parity Act would:
- Support industry investment in carbon-neutral products.
- Support utilizing captured carbon in the manufacturing of products to lower the emission intensity of production.
- Contribute to emissions reductions and a circular economy.
- Establish parity for utilization that will further incentivize the deployment and innovation of carbon capture technology and low/zero-carbon products.
- Reduce current annual global CO2 emissions by up to 10 percent, including by addressing the industrial sector that accounts for 24 percent of U.S. greenhouse gas emissions.
- Promote a circular economy by keeping materials in circulation for as long possible.
The legislation was also introduced in the House today by Representatives David Schweikert (R-AZ) and Terri Sewell (D-AL).
Whitehouse was an original cosponsor of the FUTURE Act, bipartisan legislation that was signed into law to increase the 45Q tax credit values and indexing the values to inflation.
Whitehouse was also an original cosponsor of 45Q Carbon Capture Utilization and Storage (CCUS) Tax Credit Amendments Act of 2020, which extended the tax credit for an additional two years, and was adopted in the FY2021 omnibus.
A bill summary can be found here.
Meaghan McCabe, (202) 224-2921
