45Q Tax Credit
A federal tax credit for capturing and permanently sequestering CO2. The IRA increased the credit to $85/ton for geological storage and $180/ton for direct air capture. Available for projects that capture specified minimum amounts annually.
Why It Matters
The 45Q credit is the primary federal incentive making carbon capture projects economically viable. At $85/ton, it can close the economics gap for CCS on power plants and industrial facilities.
Related Topics
Related Terms
Carbon Capture and Storage (CCS)
Technologies that capture CO2 emissions from power plants or industrial facilities before they reach the atmosphere, then transport and store the CO2 permanently underground in geological formations.
Direct Air Capture (DAC)
Technology that captures CO2 directly from ambient air (as opposed to from a smokestack). DAC requires significant energy and currently costs $400-$1,000+ per ton of CO2 removed, but costs are expected to decline with scale.