(Washington, DC) – Congresswoman Lizzie Fletcher (TX-07) and Congressman Jack Bergman (MI-01) introduced H.R. 7896, the Redeeming Effectiveness to Carbon Oxide Utilization Plus Sequestration (RECOUPS) Act of 2020.  This bipartisan legislation would provide a direct pay option for Section 45Q tax credits for carbon capture and sequestration.  

“Investing in carbon capture technology is critical to our energy future and to addressing our most pressing environmental challenges,” said Congresswoman Lizzie Fletcher.  “I’m glad to partner with Representative Bergman to introduce this bipartisan bill that will help companies take advantage of the 45Q tax credit and help jump start these carbon capture projects.” 

Rep. Bergman stated, "In the midst of COVID-19, direct pay has become more important than ever to help developers finance carbon capture projects without relying on inefficient and costly methods to monetize tax credits. The RECOUPS Act will help accelerate the development and construction of carbon capture projects currently in progress and encourage the development and deployment of additional projects to help meet climate goals, create and retain jobs, and support domestic energy and industry.”

Carbon capture projects often rely on the 45Q carbon capture and sequestration tax credits to provide financial incentives and certainty, but many businesses are currently unable to receive the full benefit of these credits depending on their tax liability.  This could force developers to pursue more costly and inefficient mechanisms to monetize the credit.  

By providing a direct pay option for the section 45Q tax credits, the RECOUPS Act would help support domestic energy production while also reducing carbon emissions.  Developers that choose to use this option would receive 90% of the tax credit's value.  Fletcher and Bergman’s bill has received support from the Carbon Capture Coalition, which is composed of nearly 80 businesses and organizations dedicated to reducing carbon emissions, fostering domestic energy and industrial production, and supporting a high-wage jobs base.

In 2018, Congress passed the Furthering Carbon Capture, Utilization, Technology, Underground Storage, and Reduced Emissions Act (FUTURE Act) as part of the Bipartisan Budget Act of 2018 to enhance the 45Q tax credit to incentivize carbon capture and removal technology deployment in the United States.  Earlier this year, Congresswoman Fletcher led a bipartisan call for the Department of Treasury and the Internal Revenue Service (IRS) to issue guidance on the 45Q tax credit to ensure carbon capture, utilization, and storage projects could begin as quickly as possible.