Hoeven: Treasury Issues Key Guidance on the Implementation of the 45Q Tax Credit for CCUS Projects

Senator Working to Ensure 45Q Advances Efforts like Project Tundra, Aligns with His CO2 Regulatory Certainty Act

WASHINGTON – Senator John Hoeven, a member of the Senate Energy and Natural Resources Committee, today released the following statement after the U.S. Department of the Treasury issued key guidance on the implementation of the 45Q tax credit for carbon capture, utilization and storage (CCUS) projects. The guidance provides clarity to project developers, enabling them to begin making financial arrangements and helping ensure that construction can begin on eligible projects before the credit’s construction deadline of January 1, 2024. Hoeven has been working with the administration to advance 45Q’s implementation and support the development of commercially-viable CCUS technology, like Project Tundra. This includes urging the Treasury to put in place the senator’s CO2 Regulatory Certainty Act on an administrative basis. 

“This guidance, which has already taken two years to develop, is an important step, because it allows CCUS project developers to work with their investors and get the ball rolling on putting this technology into practice,” said Senator Hoeven. “That’s what our work on the 45Q tax credit has been all about – implementing CCUS and making sure projects aren’t just technically-viable, but that they work commercially as well. As the Treasury continues developing the final regulations for 45Q, we’re going to keep working to ensure the credit supports the various applications of CCUS technology and maximize its benefit for efforts like Project Tundra.”

“For Minnkota to move forward with Project Tundra, it needs confidence from the investment community in the utilization of 45Q tax credits. The first two elements of guidance received from the IRS are critically important as we evaluate the economics of building the world’s largest carbon capture facility in North Dakota. We thank Senator Hoeven for his steadfast leadership every step of the way on Project Tundra. We look forward to continued work with the Senator to ensure North Dakota remains a leader in next-generation energy technology development,” said Mac McLennan, Minnkota President & CEO. 

“Basin Electric appreciates Senator Hoeven’s leadership and efforts to advance implementation of the 45Q tax credit. 45Q was one of the most significant incentives passed by Congress to encourage carbon capture utilization and storage development, and today’s notices from the IRS are an important first step to give stakeholders certainty to explore options for potential projects. We hope the IRS will continue this momentum to fully implement 45Q, and look forward to continuing to work with Senator Hoeven on this important issue,” said Paul M. Sukut, CEO and General Manager, Basin Electric Power Cooperative.

Hoeven’s legislation would align Internal Revenue Service (IRS) guidelines with current Environmental Protection Agency (EPA) regulations to reflect the operational and legal differences between using captured CO2 for enhanced oil recovery and geological storage under the Clean Air Act and the Safe Drinking Water Act. This clarity would allow the 45Q tax credit to be better utilized for CCUS projects and accelerate their development. The senator is working to ensure that Treasury’s final 45Q regulations provide the certainty necessary to make CCUS commercially viable for both long-term storage, and enhanced oil and gas recovery, in a manner similar to his legislation. The final regulations are expected to be released later this spring.