The Need for an Adequate Commence Construction Window for 45Q Federal Tax Credits for Carbon Capture Utilization and Storage

The Clean Air Task Force (CATF) asserts that the January 1, 2024, deadline to commence construction for 45Q tax credits is inadequate due to the long lead times and high upfront costs associated with CCUS projects. While smaller industrial projects using enhanced oil recovery (EOR) may meet the deadline, large-scale projects in power generation, steel, and cement—especially those using saline storage—face significant engineering and permitting hurdles that could prevent them from being pursued without a deadline extension.

• Developing a CCUS project can require up to five years of lead time and nearly $50 million in investment before construction begins.
• The current 45Q tax credit requires construction to start before January 1, 2024, but the U.S. Treasury has not yet issued the implementing regulations necessary for developers to understand qualification rules.
• CCUS projects in carbon-intensive sectors like power generation, petroleum refining, steel, and cement production—particularly those utilizing saline storage—are unlikely to be pursued without a deadline extension due to complex engineering and permitting requirements.
• Certain project types are more likely to meet the deadline, specifically smaller, high-purity industrial CO2 sources (such as gas processing or ethanol) using enhanced oil recovery (EOR) because they require less complex engineering and EOR operators already possess Class II permits.
• Permitting processes can significantly extend project timelines; for example, a Class VI permit for saline reservoir storage in Illinois took nearly six years to finalize for Archer Daniels Midland.

APA

Clean Air Task Force (2019). The Need for an Adequate Commence Construction Window for 45Q Federal Tax Credits for Carbon Capture Utilization and Storage. https://cdn.catf.us/wp-content/uploads/2019/11/21093009/45Q-Project-Timeline.pdf

Chicago

Clean Air Task Force. The Need for an Adequate Commence Construction Window for 45Q Federal Tax Credits for Carbon Capture Utilization and Storage. 2019. https://cdn.catf.us/wp-content/uploads/2019/11/21093009/45Q-Project-Timeline.pdf.

Wikipedia

{{cite report |author=Clean Air Task Force |title=The Need for an Adequate Commence Construction Window for 45Q Federal Tax Credits for Carbon Capture Utilization and Storage |date=14 November 2019 |url=https://cdn.catf.us/wp-content/uploads/2019/11/21093009/45Q-Project-Timeline.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cleanairtaskforce2019need, author = {{Clean Air Task Force}}, title = {{The Need for an Adequate Commence Construction Window for 45Q Federal Tax Credits for Carbon Capture Utilization and Storage}}, institution = {Clean Air Task Force}, year = {2019}, month = nov, url = {https://cdn.catf.us/wp-content/uploads/2019/11/21093009/45Q-Project-Timeline.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }