FOR IMMEDIATE RELEASE
Contact:
Andrew Jefferis, Aii Media Coordinator, ajefferis@aii.org
Unlocking America’s Energy Future: New Brief Reveals Untapped Potential of 45Q Carbon Capture Incentive
Washington, D.C. – Monday, February 24, 2025 – The Alliance for Innovation and Infrastructure (Aii) today released a groundbreaking policy brief, “Maximizing The Potential of 45Q: Untapped opportunities in existing carbon capture incentives,” highlighting transformative opportunities within the federal Section 45Q tax credit. The report reveals that with simple language tweaks, 45Q could unlock new markets for U.S. natural gas, drive domestic energy innovation, and bolster American infrastructure – while maintaining bipartisan support.
The Section 45Q tax credit, originally enacted in 2008, has been expanded multiple times under Presidents Bush, Trump, and Biden. However, according to the brief, it remains limited by outdated definitions that fail to recognize emerging carbon capture technologies – particularly those producing alternatives to gaseous carbon oxides.
Key Findings:
- Unleashing Innovation: By broadening qualifying carbon forms beyond gaseous carbon oxides to include solid and liquid carbon products, the U.S. can future-proof the 45Q incentive, encouraging scalable innovations like natural gas pyrolysis – a process that yields hydrogen fuel and solid carbon used in construction and manufacturing. New processes may even be invented beyond what is currently viewed as possible, similar to how innovation has delivered new processes since 45Q was created.
- Bipartisan Opportunity: With renewed legislative interest expected in 2025, revising 45Q could become a key tool for the 119th Congress and new administration to achieve U.S. energy dominance, infrastructure investment, and economic growth while improving the performance goals related to climate concerns.
- New Markets, New Wealth: Expanded 45Q eligibility could catalyze new industries in hydrogen production, circular economies using solid carbon in roads and batteries, and improved utilization of existing pipeline networks for distributed decarbonization solutions.
Benjamin Dierker, JD, MPA, Executive Director of Aii and co-author of the brief, stated:
“Federal policy should empower American ingenuity, not limit it. Revising 45Q to recognize all forms of carbon – not just gases – will unlock billions in economic opportunity, create new domestic markets, and accelerate energy innovation.”
The report also highlights Senator John Barrasso’s (R-WY) recent introduction of the Enhancing Energy Recovery Act, which proposes critical parity reforms in carbon capture incentives. Aii’s policy brief suggests further steps to ensure 45Q remains a performance-based policy adaptable to future innovations.
Why This Matters:
- As a highlighted example to illustrate innovation since 45Q was created, Hydrogen, produced via pyrolysis, is a clean fuel with applications in energy, chemicals, and transportation.
- Solid carbon products can be directly integrated into infrastructure, supporting roads, roofs, tires, and batteries.
- Expanding 45Q unlocks U.S. infrastructure resilience while stimulating job creation in advanced manufacturing and energy sectors.
Read the brief and cite Aii:
Maximizing The Potential of 45Q: Untapped opportunities in existing carbon capture incentives
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About Aii:
The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization working to advance innovation across industry and public policy. The only nation wide public policy think tank dedicated to infrastructure, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, eminent domain, energy, infrastructure, innovation, technology, and transportation.