Plain English
GovGreed Synthesis ·
This bill modifies the existing Section 45Q tax credit for carbon oxide sequestration to remove a distinction between different uses of captured carbon. It eliminates a separate credit tier for 'utilization' (e.g., in products or fuels) and instead provides a single credit structure, with a higher base credit amount for carbon that is geologically stored or used in enhanced oil recovery (EOR) with storage, and a lower amount for other utilizations. The base credit amount is set at $17 per metric ton (adjusted for inflation) for storage/EOR, and $36 per ton for other utilizations, for tax years beginning after 2024.
Market Impact Map
Action Timeline
2025-02-05
Read twice and referred to the Committee on Finance. (text: CR S668)
2025-02-05
Introduced in Senate
Full Bill Text
119 S425 IS: Enhancing Energy Recovery Act U.S. Senate 2025-02-05 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. II 119th CONGRESS 1st Session S. 425 IN THE SENATE OF THE UNITED STATES February 5, 2025 Mr. Barrasso (for himself, Mr. Lankford , Mr. Cassidy , Mr. Hoeven , Mr. Justice , and Mr. Sheehy introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to modify the carbon oxide sequestration credit to ensure parity for different uses and utilizations of qualified carbon oxide. 1. Short title This Act may be cited as the Enhancing Energy Recovery Act . 2. Parity for different uses and utilizations of qualified carbon oxide (a) In general Section 45Q of the Internal Revenue Code of 1986 is amended— (1) in subsection (a)— (A) in paragraph (2)(B)(ii), by adding and at the end, (B) in paragraph (3), by striking subparagraph (B) and inserting the following: (B) (i) disposed of by the taxpayer in secure geological storage and not used by the taxpayer as described in clause (ii) or (iii), (ii) used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of by the taxpayer in secure geological storage, or (iii) utilized by the taxpayer in a manner described in subsection (f)(5). , and (C) by striking paragraph (4), and (2) in subsection (b)— (A) in paragraph (1)— (i) by striking subparagraph (A) and inserting the following: (A) Except as provided in subparagraph (B) or (C), the applicable dollar amount shall be an amount equal to— (i) for any taxable year beginning in a calendar year after 2024 and before 2027, $17, and (ii) for any taxable year beginning in a calendar year after 2026, an amount equal to the product of $17 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting 2025 for 1990 . , and (ii) in subparagraph (B), by striking shall be applied and all that follows through the period and inserting shall be applied by substituting $36 for $17 each place it appears. , (B) in paragraph (2)(B), by striking paragraphs (3)(A) and (4)(A) and inserting paragraph (3)(A) , and (C) in paragraph (3), by striking the dollar amounts applicable under paragraph (3) or (4) and inserting the dollar amount applicable under paragraph (3) , (3) in subsection (f)— (A) in paragraph (5)(B)(i), by striking (4)(B)(ii) and inserting (3)(B)(iii) , and (B) in paragraph (9), by striking paragraphs (3) and (4) of subsection (a) and inserting subsection (a)(3) , and (4) in subsection (h)(3)(A)(ii), by striking paragraph (3)(A) or (4)(A) of subsection (a) and inserting subsection (a)(3)(A) . (b) Conforming amendment Section 6417(d)(3)(C)(i)(II)(bb) of the Internal Revenue Code of 1986 is amended by striking paragraph (3)(A) or (4)(A) of section 45Q(a) and inserting section 45Q(a)(3)(A) . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
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