McKinley, Veasey reintroduce ACCESS 45Q Act

By Erin Voegele | February 17, 2021

Reps. David McKinley, R-W.V., and Marc Veasey, D-Texas, on Feb. 16 reintroduced the Accelerating Carbon Capture and Extending Secure Storage through 45Q (ACCESS 45Q) Act. The bill extends the date for projects to begin construction to claim the 45Q tax credit by 10 years and provides a direct pay elective for the full value of the credit. The two lawmakers previously introduced the bill in December 2020.

Information released by McKinley’s office indicates that the COVID-19 pandemic has slowed the development of carbon capture projects. By extending the eligible date for projects to begin construction, allowing developers upfront access to the full value of the credit, and opening up financing opportunities to those companies with an international reach, the ACCESS 45Q Act provides long-term certainly the U.S. needs to build carbon capture projects.

 “As we seek to recover from the COVID-19 pandemic and regain our position as a global energy leader, we must do everything we can to encourage innovation and develop clean energy technologies like carbon capture,” McKinley said. “The 45Q tax credit is the single-most useful tool in spurring the development of carbon capture projects. This bill will lead to more projects and more widespread adoption, which is critical to reduce emissions and preserve the future of coal and natural gas.”

“The 45Q Tax Credit was a critical step forward in advancing our nation’s green economy,” Veasey added. “With the ACCESS 45Q Act, we are building on the enhancements to the credit that were included in the Energy Act that Congress passed into law in December. The expansions in this bill will help us meet our nation’s goals to curb climate change by enhancing incentives for business and bolstering the young and growing carbon capture industry.”

The Carbon Capture Coalition has spoken out in support of the ACCESS 45Q Act.  “This bill advances the top two priorities of the Coalition as outlined in our recent first 100 days memo to the Biden administration: a direct pay option for the 45Q tax credit and a further extension of the credit to provide ten more years for carbon capture, utilization and direct air capture projects to begin construction and qualify for the credit,” said Brad Crabtree, director of the CCC.

“The combination of direct pay and a 10-year extension for 45Q in the ACCESS 45Q Act would help ensure that the more than 30 publicly-announced carbon capture, direct air capture and geologic storage projects in the U.S. continue to move forward and avoid cancelation, as well as spur development of the many more projects needed to achieve net-zero emissions economywide by 2050,” he added. “This legislation should be considered as part of any major first 100 days legislative package to foster critical climate investments, while creating high-wage jobs for American workers and their communities as they seek to recover from the COVID-19 pandemic.

“The critically important direct pay provision in the ACCESS 45Q Act is the Coalition’s number one priority,” Crabtree continued. “Direct pay gives recipients the option of receiving the 45Q tax credit as cash in the form of an estimated payment on their tax return, in lieu of needing to apply the credit to their tax liability. Direct pay would make the 45Q program much more cost-effective and impactful by allowing companies to secure the private investment needed to finance projects, while avoiding the wasteful inefficiencies and additional costs of tax equity transactions that burden and constrain the very innovation and deployment that the tax credit aims to incentivize. In addition, direct pay would significantly reduce near-term uncertainty and barriers faced by project developers in obtaining private investment due to COVID-19.

“The 10-year extension of 45Q in this legislation is essential to ensuring that project developers and investors have the financial certainty and time horizon needed to complete current projects and launch new ones to begin scaling up carbon capture technology to meet midcentury climate goals,” Crabtree said. “We know from the commercial success of wind and solar that the availability of tax credits over long periods of time serves to drive capital investment in project deployment, thus reducing costs which, in turn, enables further deployment. Fortunately, the omnibus spending bill signed into law in December extended 45Q by two years, providing an important first step toward the kind of longer-term extension provided for in the ACCESS 45Q Act.”