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US Think Tanks Seek Info On Carbon Capture Tax Credit

by Scott Hamilton, Tax-News.com, Washington

11 August 2016


On August 9, Green Scissors, a coalition between Friends of the Earth, the R Street Institute, and Taxpayers for Common Sense, announced it has filed an information request seeking US Internal Revenue Service records on the 45Q carbon capture tax credit.

Established in 2008, the 45Q carbon dioxide (CO2) tax credit allows a USD20 tax credit for each ton of CO2 captured and stored underground and a USD10 credit for each ton of CO2 captured and used as part of enhanced oil-recovery projects. The credit will expire after credits for 75m tons of CO2 have been disbursed.

Legislation introduced by senators Heidi Heitkamp (D – North Dakota) and Sheldon Whitehouse (D – Rhode Island) would increase the tax credit for new facilities to USD35 and USD50 for oil extraction and underground storage, respectively, while Mike Conaway (R – Texas) has proposed to make the credit permanent and to raise the per-ton value of the credit for new facilities to USD30 for both oil extraction and underground storage.

With some lawmakers therefore seeking to expand the credit, the information request by Green Scissors – to be told the total number of credits disbursed to date for oil extraction, rather than underground storage – is intended to show how the measure has benefited the US oil and gas industry.

Catrina Rorke, Director of Energy Policy at the R Street Institute, said: "We're asking for this information to demonstrate once and for all that this provision is more about subsidizing businesses, not reducing climate emissions."

Lukas Ross, climate and energy campaigner at Friends of the Earth, added that, "before the US Congress sleep walks into giving Big Oil a giant new subsidy, we deserve some basic information about who is benefiting and how from the current law."

TAGS: environment | Energy | tax | business | energy | law | oil and gas | tax credits | legislation | United States | Tax

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