Bipartisan Legislation for Section 48A Tax Credits

Senators John Hoeven (R-N.D.) and Tina Smith (D-Minn.) have introduced the Carbon Capture Modernization Act, legislation to modernize the Section 48A tax credit for clean coal facilities to better support the use of carbon capture and sequestration (CCS) technology. The Section 48A tax credit was first established in 2005, and CO2 capture projects were made eligible in 2008. However, the eligibility standards for the credit are not technically or economically feasible for CCS retrofit projects, like Project Tundra.

Accordingly, the Hoeven-Smith legislation would modernize the credit’s performance and efficiency standards to reflect the capabilities of existing technology, which will help promote the adoption of CCS technology and reduce emissions. Prior to introducing it as standalone legislation, Hoeven worked with energy stakeholders to draft the measure and led a bipartisan, bicameral group of congressmen and senators, including Smith, in urging the leaders of the Senate Finance Committee and the House Ways and Means Committee to advance the provision as part of end-of-the-year tax legislation.

“We worked hard with energy stakeholders and researchers in North Dakota and Minnesota to craft legislation that modernizes the 48A tax credit and will better advance the use of CCS technology,” said Senator Hoeven.

The Carbon Capture Modernization Act is supported by Minnkota Power Cooperative, Lignite Energy Council, Basin Electric Power Cooperative, University of North Dakota Energy and Environmental Research Center, BNI Energy, ALLETE Clean Energy, Minnesota Power, National Rural Electric Cooperative Association, International Brotherhood of Boilermakers, International Brotherhood of Electrical Workers and others.

In addition to Hoeven and Smith, the legislation introduced today is cosponsored by Senators Kevin Cramer (R-N.D.), Joe Manchin (D-W.Va.), John Barrasso (R-Wyo.), Jon Tester (D-Mont.), Lindsey Graham (R-S.C.) and Steve Daines (R-Mont.). A summary of the legislation can be found here, and industry statements of support can be found here. The full text of the bill is available here.