WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) joined a bipartisan group of his colleagues in requesting guidance from the Department of Treasury for the implementation of the carbon capture utilization and storage tax credit program. The program was established through the FUTURE Act, a bipartisan bill supported by Senator King and passed as part of the December 2017 tax bill. Despite the fact that the FUTURE Act became law well over a year ago, taxpayers remain unable to claim the revised credit. In a letter to Treasury Secretary Steven Mnuchin, the Senators requested that Treasury issue an interim rule to allow carbon capture projects, which often have a long lead-time, to get underway and assign more staff to the development of the program. 

“Implementation of this legislation is critical for establishing a domestic market for carbon to reduce emissions, create and preserve jobs, and drive further commercial deployment of carbon capture projects,” wrote the Senators. “It has now been over a year since the bill’s passage and taxpayers remain unable to claim the revised credit.”

Senator King has repeatedly emphasized the importance of carbon capture technology. Last week, he highlighted the grave dangers posed by rapidly rising carbon dioxide (CO2) levels in a hearing of the Senate Energy and Natural Resources (ENR)Committee, noting that the current level of CO2 is already at a record high, and urged focus on technologies that can remove existing carbon from the atmosphere. During an ENR hearing last month, he cited carbon capture technology as an important area of focus in the fight against climate change.  

A forceful advocate for clean energy solutions, Senator King is the lead sponsor on clean and efficient energy bills such as the Next Generation Grid Resources and Infrastructure Development (GRID) Act that would encourage energy independence, foster innovation, and leverage federal resources to support a more resilient and modern electric grid through the use of distributed and clean energy resources. Last month, he published a column on Earth Day laying out ambitious and attainable steps America must take to respond to the challenges of climate change. He is also the lead sponsor of the Combined Heat and Power (CHP) Support Act, legislation that would support businesses investing in energy efficiency technology, help diversify energy options for rural industries, and maximize use of Maine’s natural resources. Senator King introduced this bill in November 2017, after holding an ENR Committee field hearing at Robbins Lumber in Searsmont to identify opportunities to use new energy efficient technologies to sustain and strengthen rural industries. Senator King is also the lead sponsor for the Biomass Thermal Utilization (BTU) Act, a bipartisan bill that would incentivize the use of energy efficiency biomass heaters in homes and businesses instead of relying on fossil fuel energy.

In addition to Senator King, the letter was also signed by Senators Sheldon Whitehouse (D-R.I.), John Barrasso (R-W. Va.), Shelley Moore Capito (R-W. Va.), Joe Manchin (D-W. Va.), Dick Durbin (D-Ill.), Chris Coons (D-Del.), Kevin Cramer (R-N.D.), Tammy Duckworth (D-Ill.), and John Hoeven (R-N.D.). 

Full text of the letter is available here and below.

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Secretary Steven T. Mnuchin

Department of the Treasury

1500 Pennsylvania Ave., N.W.

Washington, DC 20220

Dear Secretary Mnuchin:

On February 6, 2019, the attached letter was sent to IRS Assistant Secretary David Kautter and Acting Chief Counsel William M. Paul to highlight the pressing need for regulatory guidance following the enactment of the FUTURE Act (PL 115–123, section 41119).  Implementation of this legislation is critical for establishing a domestic market for carbon to reduce emissions, create and preserve jobs, and drive further commercial deployment of carbon capture projects.  It has now been over a year since the bill’s passage and taxpayers remain unable to claim the revised credit. 

Carbon capture projects need financial certainty up front due to long lead times for development and construction.  It is imperative that developers have IRS guidance in the near term so project sponsors can demonstrate qualification for the credit as they seek private investment in a timely fashion before the January 1, 2024 tax credit commence construction deadline.

The Department of Treasury recently published a request for information (RFI) with a 45-day public comment period.  This RFI lays the groundwork for a proposed rule and subsequent final rule, but we remain far from an updated, implementable credit framework usable for project developers and financiers. 

We request that Treasury commit additional staff to the development of the final rule and the review of comments associated with the RFI and issue interim guidance so that project developers can utilize the tax credit without additional delay.  We also request that you keep us apprised of your progress. 

Thank you for your consideration and we look forward to your prompt attention to this request.