Inflation Reduction Act 2022: Sec. 13104 Extension and Modification of Credit for Carbon Oxide Sequestration

Last updated: 17 November 2022

The US government, in the framework of its Inflation reduction Act, implemented changes to 45Q providing up to USD 85 per tonne of CO2 permanently stored and USD 60 per tonne of CO2 used for enhanced oil recovery (EOR) or other industrial uses of CO2, provided emissions reductions can be clearly demonstrated. The credit amount significantly increases for direct air capture (DAC) projects to USD 180 per tonne of CO2 permanently stored and USD 130 per tonne for used CO2. 

In addition, the 2022 changes reduce the capacity requirements for eligible projects: 18,750 tonnes per year for power plants (provided at least 75% of the CO2 is captured), 12,000 tonnes per year for other facilities, and 1,000 tonnes per year for DAC facilities.
Finally, the 2022 changes include a seven-year extension to qualify for the tax credit, meaning that projects have until January 2033 to begin construction.

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