Overview
Section 45Q provides tax credits for the capture of qualified carbon oxide from industrial facilities and power plants. The credit incentivizes carbon capture and either geological storage or utilization in approved processes. Projects must meet minimum capture thresholds and comply with EPA monitoring requirements.
Credit Structure
Geological storage (base rate)
For carbon oxide captured and stored in secure geological formations
With Prevailing Wage & Apprenticeship
Geological storage (enhanced rate)
With prevailing wage and apprenticeship requirements satisfied
Bonus Multipliers
Direct Air Capture Bonus
+Higher RatesDirect air capture facilities may qualify for higher credit amounts up to $180/metric ton.
Utilization Credit
+VariesCarbon oxide used in qualified processes receives credits at different rates than geological storage.
Eligibility & Requirements
- 1Minimum capture threshold of 12,500 metric tons annually for direct air capture
- 2Minimum capture threshold of 18,750 metric tons annually for electricity generating facilities
- 3Minimum capture threshold of 1,000 metric tons annually for other facilities
- 4EPA monitoring, reporting, and verification requirements
- 512-year credit period from date equipment is placed in service
Direct Pay Election
Tax-exempt entities and certain other qualified organizations may elect direct payment for Section 45Q credits on qualified facilities.
Learn More About Direct Pay