Sponsors (4)
The bill strengthens incentives and creates clearer rules to expand large-scale carbon capture deployment and emissions removal, but concentrates benefits among larger operators while increasing federal tax costs and imposing compliance burdens that can exclude smaller projects.
Owners/operators of qualifying solid or liquid carbon capture facilities (primarily utilities and large energy companies) can claim an expanded 45Q tax credit, lowering their federal tax liabilities and improving project economics.
Expanded incentives for carbon removal technologies increase the likelihood of faster deployment of carbon sequestration, which can reduce greenhouse gas emissions and support climate goals.
Establishes clearer measurement and verification rules (measuring CO2-equivalent at source and verifying disposal/injection/utilization), giving claimants and the IRS greater certainty about eligibility and improving administration of the credit.
Broadening the 45Q credit increases the federal tax expenditure and could raise the deficit or require offsets, potentially imposing costs on taxpayers or necessitating cuts/offsets elsewhere.
The 1,000 metric ton per year minimum capture threshold bars many small projects and developers from qualifying, concentrating benefits among larger operators and raising entry barriers for small businesses.
Requiring source measurement and verification increases compliance and administrative burdens on claimants and demands IRS oversight capacity, raising costs for applicants (and potential delays) to claim the credit.
Based on analysis of 2 sections of legislative text.
Adds solid and liquid forms of captured carbon to the 45Q tax credit, defines new facility and measurement rules, and sets a 1,000 metric ton annual minimum for eligibility.
Expands the federal carbon sequestration tax credit to cover carbon captured in solid or liquid form at newly defined solid or liquid carbon capture facilities. It adds definitions, establishes measurement and verification rules, and sets a minimum annual capture threshold of 1,000 metric tons for eligibility. The change modifies Internal Revenue Code section 45Q so that qualifying carbon captured in solid or liquid form (measured at source and verified at disposal, injection, or utilization) can receive the credit for carbon captured after the date of enactment.
Official title: Amend the Internal Revenue Code of 1986 to expand the carbon oxide sequestration credit to include solid or liquid carbon capture facilities.
Introduced February 4, 2026 by Timothy Patrick Sheehy · Last progress February 4, 2026