Great Plains Institute Vice President and Director of the Carbon Capture Coalition Brad Crabtree issued a statement responding to the release of a letter from the Internal Revenue Service Inspector General regarding tax credit claims under the old 45Q tax credit program. The statement was originally posted on the Carbon Capture Coalition website:
“The Carbon Capture Coalition has long supported robust transparency and accountability in monitoring, reporting and verification (MRV) of secure geologic storage to claim the 45Q tax credit. It is of paramount importance for achieving the environmental objectives of the 45Q program and maintaining public confidence and bipartisan support in Congress.
That is why the Carbon Capture Coalition’s over 75 companies, unions and NGOs wrote a letter in March to Treasury Secretary Mnuchin and Internal Revenue Service (IRS) Commissioner Rettig urging them to safeguard the integrity of the 45Q tax credit in the IRS’ forthcoming proposed rule.
The Coalition thus welcomes the IRS inspector general’s (IG) investigation of the old 45Q program and his findings that the IRS is auditing past claims of credits. We commend the IRS for doing its job and disallowing a majority of the credits claimed to date for which MRV requirements have not been met, and we strongly encourage the IRS to continue its compliance efforts.
It is critical that the IRS continue to enforce compliance and ensure that noncompliant claims of credits are not allowed a public tax benefit. Any company claiming 45Q tax credits must comply IRS rulings and provide a proper mass balance accounting of the tons of CO2 stored in return for receiving the credits.
The issues identified by the IRS inspector general in the old 45Q program cannot be allowed to taint the new and reformed 45Q program, which was enacted on a broadly bipartisan basis and backed by the most diverse industry, labor and environmental coalition ever assembled on behalf of a federal energy and climate policy.
Economywide deployment of carbon capture is essential to meeting midcentury climate goals and to supporting domestic energy, industrial and manufacturing sectors and their associated high-wage jobs. The best way to achieve this is with financial incentives such as the performance-based 45Q tax credit, just as the successful deployment and commercialization of other low and zero carbon technologies have relied on federal tax credits and other incentives.
Therefore, the Carbon Capture Coalition once again urges Secretary Mnuchin and Commissioner Rettig to embrace the Coalition’s broad-based consensus recommendations and insist on the utmost accountability and transparency in any MRV pathway identified in the IRS’ pending 45Q rule. We also encourage members of Congress to oppose any legislative efforts to undermine the integrity of the accounting for secure geologic storage required to claim the 45Q credit.”
Read the Carbon Capture Coalition statement and learn more on the Coalition website.