After years of waiting, IRS and Treasury release guidance for carbon capture tax credit
- Sep 30, 2022
- Carbon Capture
- By admin
Hannah Grover, Farmington Daily Times
FARMINGTON — The proposal to retrofit the San Juan Generating Station with carbon capture technology and keep it open after 2022 relies heavily on tax equity financing, but there has not been any guidance for how the 45Q tax credits will work.
That changed this week when the U.S. Department of Treasury and the Internal Revenue Service issued two draft guidance documents.
The 45Q tax credits were initially established under President Barack Obama’s administration in 2008 and later enhanced in 2018 to promote the development of carbon capture projects throughout the United States.
Enchant Energy has proposed using the tax credits that will be generated by removing carbon dioxide from flue gas at the power plant to attract investors.
News Navajo Nation, San Juan County officials say partnership could make railroad a reality
Chief Operating Officer Peter Mandelstam said the draft guidance documents appear to be based on successful tax credits that spurred the development of wind and solar projects.
“Our lawyers felt that it was very straightforward with no surprises,” he said.