Hoeven Helps Introduce Bipartisan Legislation to Accelerate Implementation of CCUS Technologies

Legislation Would Enhance 45Q & 48A Tax Credits, Includes Hoeven’s Carbon Capture Modernization Act

WASHINGTON – Senator John Hoeven today joined Senators Tina Smith (D-Minn.), Shelley Moore Capito (R-W.Va.) and Sheldon Whitehouse (D-R.I.) in introducing bipartisan legislation to enhance the 45Q credit for carbon oxide sequestration and 48A advanced coal project tax credits to better support the development and implementation of carbon capture, utilization and storage technologies (CCUS). Specifically, the legislation:

  • Provides a direct payment option for the 45Q and 48A CCUS tax incentives.
  • Extends the 45Q commence construction deadline for five years, through January 1, 2031.
  • Includes the Hoeven-Smith Carbon Capture Modernization Act to update the 48A tax credit to ensure it works for CCUS retrofits, like Project Tundra.
  • Allows the 45Q credit to offset tax obligations arising from the Base Erosion Avoidance Tax (BEAT).
  • Increases support for direct air capture (DAC) of CO2 from the atmosphere. 

“The 45Q and 48A tax credits are an essential part of our efforts to advance the development of CCUS technologies, which will enable our nation to continue utilizing all of our abundant energy resources while also reducing emissions,” said Senator Hoeven. “Our legislation will enhance these important incentives, making them more effective and accessible as CCUS is developed and implemented. This is about supporting good-paying jobs, making our nation energy secure and maintaining our baseload power sources to ensure the reliability and affordability of the electric grid.”

“The University of North Dakota’s Energy & Environmental Research Center is a global leader in developing carbon capture, utilization, and storage technologies, and along with our industry partners, we have demonstrated that CO2 can be captured, transported, and safely stored permanently in the subsurface. This legislation is a critical step to provide industry with financial certainty that will catalyze investment in CCUS technologies. Proliferation of CCUS technology will provide our nation with continued reliable energy production and robust industrial activity, with fewer emissions,” said Charles Gorecki, CEO of EERC.

“The Lignite Energy Council and its 250 members are actively engaged in the commercialization of carbon capture and storage projects including Project Tundra, which would be the largest in the world. We applaud Senator John Hoeven as a co-sponsor of a bi-partisan bill to make the federal tax credits more user-friendly for the pioneering utilities who are taking the risk to push the science. As the world seeks affordable CO2 solutions, they are looking at the United States to once again lead in technology,” said Jason Bohrer, president and CEO of the Lignite Energy Council.  

“Basin Electric appreciates Senator Hoeven’s leadership in supporting this legislation. A direct pay option for these energy tax credits will give cooperatives such as Basin Electric a critical incentive to continue implementing solutions to reduce emissions from coal-based power plants. The development of cost-effective carbon capture, utilization and sequestration technology will help utilities explore future options to keep coal as part of an all-of-the-above generation mix for North Dakota and the region,” said Paul Sukut, CEO and General Manager of Basin Electric Power Cooperative.

“The advancement of carbon capture technology is essential for reliable, affordable electricity in our region, cleaner industries across the United States, and energy stability around the world,” said Mac McLennan, Minnkota Power Cooperative president and CEO. “The energy landscape is changing quickly, and it is vitally important that we create a policy framework that allows these innovative emissions reduction technologies to thrive. The 45Q and 48A tax credits are some of the best tools we have available today. Enhancing these credits will help position Project Tundra, Minnkota’s proposed carbon capture project in North Dakota, to take an important step toward commercialization – an accomplishment that could serve as a blueprint for industries around the world.”

In addition to Hoeven, Smith, Capito and Whitehouse, the legislation introduced today is cosponsored by Senators Kevin Cramer (R-N.D.), Chuck Grassley (R-Iowa), Brian Schatz (D-Hawaii), Joe Manchin (D-W.Va.), Chris Coons (D-Del.), John Barrasso (R-Wyo.), Ben Ray Luján (D-N.M.) and Joni Ernst (R-Iowa). A summary of the legislation can be found here, and the full bill text is available here.

This legislation builds on Hoeven’s previous work to advance enhancements for the 45Q and 48A tax credits. This includes the senator’s efforts with the Trump administration to secure the final rules for the 45Q tax credit and implement the credit in a manner that: 

  • Makes CCUS projects more commercially-viable.
  • Provides an important revenue stream to coal producers.
  • Ensures the tax credit works for both long-term underground storage and enhanced oil recovery.

At the same time, Hoeven continues his efforts to ensure coal is fairly valued as a source of baseload power that is available 24 hours a day, seven days a week. To this end, the senator has repeatedly pressed the Federal Energy Regulatory Commission (FERC) on this issue. Hoeven also highlighted remarks from former Energy Secretary Dan Brouillette at a recent Senate Energy and Natural Resources Committee hearing, outlining the need to ensure the reliability of the electric grid by maintaining the nation’s baseload power sources.