Enhancing Energy Recovery Act

The "Enhancing Energy Recovery Act" proposes significant amendments to Section 45Q of the Internal Revenue Code of 1986, which governs the carbon oxide sequestration credit. The primary goal is to restructure the credit amounts to differentiate between various methods of carbon oxide management, ensuring specific incentives for each approach. This bill consolidates previous categories for carbon oxide disposal and utilization. Under the revised structure, the bill establishes a higher tax credit of $36 per metric ton for qualified carbon oxide that is solely disposed of in secure geological storage. In contrast, a lower credit of $17 per metric ton , subject to inflation adjustments after 2026, will apply to carbon oxide used as a tertiary injectant in qualified enhanced oil or natural gas recovery projects before secure geological storage, or for other forms of utilization. These amendments are slated to take effect for taxable years beginning after December 31, 2024, aiming to refine the economic incentives for carbon capture and storage technologies.