Lifecycle Analysis

The amount of qualified carbon oxide utilized by you is equal to the metric tons of qualified carbon oxide that you demonstrate, based upon an analysis of lifecycle greenhouse gas emissions (LCA), that were captured and permanently isolated from the atmosphere (isolated), or displaced from being emitted into the atmosphere (displaced).

Lifecycle greenhouse gas emissions and lifecycle analysis

The term “lifecycle greenhouse gas emissions” means the aggregate quantity of greenhouse gas emissions (including direct emissions and significant indirect emissions such as significant emissions from land use changes) related to the full product lifecycle, including all stages of product and feedstock production and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished product to the ultimate consumer, where the mass values for all greenhouse gases are adjusted to account for their relative global warming potential according to Table A-1 of 40 CFR Part 98 subpart A. The amount of lifecycle greenhouse gas emissions measured by a lifecycle greenhouse gas analysis (LCA) is expressed in carbon dioxide equivalents (CO2-e).

Measurement

The measurement and written LCA report must be performed by or verified by an independent third party. The LCA report must be prepared in conformance with, and contain documentation that conforms to, the International Organization for Standardization (ISO) 14040:2006, Environmental Management—Life Cycle Assessment—Principles and Framework and ISO 14044:2006, Environmental Management—Life Cycle Assessment—Requirements and Guidelines, as well as a statement documenting the qualifications of the independent third party, including proof of appropriate U.S. or foreign professional license, and an affidavit from the third party stating that it's independent from you.

Approval of the LCA

You must submit the written LCA report and independent third-party statement to the IRS and the Department of Energy (DOE). The LCA will be subject to a technical review by the DOE, and the IRS will determine whether to approve the LCA.

You should fax a copy of your LCA report, including the independent third-party statement specified in Regulations section 1.45Q-4(c)(4), to the IRS at 844-255-4817. The submission should include a cover letter with:

  1. Name of the facility where the qualified carbon oxide is utilized (“utilization facility”);

  2. Name of the operator of the utilization facility, including operator’s TIN/EIN;

  3. Name of the taxpayer(s) claiming the credit based on the LCA, including each taxpayer's TIN/EIN;

  4. Name of a corporate officer in charge of the LCA report submission (or a designated representative) with a written power of attorney (POA on Form 2848) and that person's contact information, including official corporate mailing address;

  5. Tax year in which the credit is claimed; and

  6. Reserved for future use.

You should also mail (1) the items above, and (2) the model, if the LCA wasn’t verified by an independent third-party review, on a USB thumb drive, to:


Internal Revenue Service
Office of Associate Chief Counsel (PSI)
1111 Constitution Ave. NW
Branch 6 (CC:PSI:6), Room 5114
Washington, DC 20224

You should also send the DOE an email at LCA45Q@hq.doe.gov, and the DOE will respond with instructions for submitting the LCA application to the DOE.