CCS tax credit rule coming by December — Sen. Cramer

Source: By Geof Koss, E&E News reporter • Posted: Sunday, September 29, 2019

The Treasury Department is planning a formal rulemaking by year’s end to help define the contours of a key carbon capture and sequestration (CCS) tax break that Congress expanded last year, a GOP senator said this week.

After speaking with Treasury by phone last week, Sen. Kevin Cramer (R-N.D.) said the department appears to be “all over it.”

“They’ve added some resources by adding talent,” he told E&E News, adding that the forthcoming proposal will not be “simply guidance” but a rulemaking that aims for “a broader application of the entities that could take advantage of their credit.”

House and Senate lawmakers from both parties have been pressing Treasury for months to issue guidance on the so-called 45Q tax credit, which was expanded in 2018 to make it more viable for long-term investment in the emissions-reducing technology (E&E Daily, May 21).

Cramer said the delay was frustrating, given that the bipartisan proposal to expand the credit was signed into law in 2018, but he said he was happy to see the matter being given attention. He said he was told Treasury would have a rulemaking available for a 45-day public comment period “sometime in mid-December — probably.”

“It would be better if they could do it next week,” he said. “But at the same time, it does seem to have a greater focus than it had previously. We just kind of keep encouraging them along.”

The IRS in May issued a request for comment on how to implement the revised law, outlining a number of technical questions as it considered regulations and guidance (Greenwire, May 3).

The tardiness in issuing guidance was noted this week by the Rhodium Group, which said the delay is slowing the “first wave” of CCS projects.

“Meanwhile the window for breaking ground shrinks each day that guidance is delayed,” said the group’s report, which highlighted how five-year extensions of key clean energy tax breaks could help the U.S. make progress on emission reduction commitments under the Paris climate agreement (E&E Daily, Sept. 26).

Treasury did not respond to a request for comment on Cramer’s remarks, but the senator said he has “renewed confidence” in the department following last week’s “encouraging call.”

“I’ve learned with every bureaucratic agency under any administration to be hopeful but also cautious in my hopefulness,” he said.

Reporter Jeremy Dillon contributed.