Summary

Creates a new tax credit for carbon removed from forest residue biomass and securely stored or put to long-duration use. The credit pays per metric ton of CO2-equivalent captured by qualifying biomass equipment placed in service at qualifying projects on or after enactment, with higher rates for secure geological storage and a multiplier for projects that meet stricter capture/storage standards. The law sets initial per-ton amounts ($36 for geological storage; $12 for long-duration utilization) that apply through 2026 and are inflation-indexed afterward, defines how existing projects may claim credits for added equipment, and adopts modified rules similar to current carbon capture incentives to increase credit value for certain high-quality removals.

• Creates a new tax credit for CO2 removed from forest residue biomass and permanently stored or used long-term.
• Pays $36/ton for geological storage and $12/ton for long-duration utilization for taxable years through 2026, then indexes amounts for inflation.
• Provides a 5× credit multiplier for removals that meet stricter performance and storage requirements modeled on existing carbon capture rules.
• Only capture by biomass equipment placed in service at a qualified project on or after enactment qualifies; existing projects can claim credit only for incremental capture after added equipment is placed in service.
• Requires documentation of captured CO2e, storage method, and equipment service date to claim the credit.
• Amends the Internal Revenue Code to add the credit; it is a tax expenditure rather than a direct spending program.
• Targets removal of carbon from forest residues, which could reduce wildfire fuel and create demand for biomass removal and storage activities.
• Will affect project developers, biomass equipment manufacturers, storage operators, and taxpayers claiming the credit; administrative verification will be needed to prevent double counting.