End Polluter Welfare for Enhanced Oil Recovery Act of 2026

Summary

Eliminates key federal tax incentives for enhanced oil recovery (EOR) by removing the existing enhanced oil recovery credit from the Internal Revenue Code and by prohibiting use of carbon oxide as a tertiary injectant for newly constructed facilities begun after enactment. The changes amend multiple tax-code cross-references and take effect for taxable years beginning after the date of enactment.

• Strikes section 43 of the Internal Revenue Code, eliminating the existing enhanced oil recovery tax credit.
• Adds a new restriction preventing use of carbon oxide as a tertiary injectant for qualified facilities whose construction starts after enactment.
• Makes multiple conforming edits across the tax code to remove or redesignate references to the deleted section 43.
• Renames references to section 45Q in the Code to the Act's short title as enacted.
• Effective for taxable years beginning after the date of enactment; the construction-start test governs the carbon-oxide provision.
• Does not appropriate funds or create new spending programs; this is a tax-law amendment.
• Directly affects EOR projects, carbon capture and storage (CCS) deployments tied to tertiary injection, and related taxpayers.
• Alters tax incentives that have been used to support oil-industry EOR projects, potentially changing project economics for new builds.