The Enhanced Energy Recovery Act modifies the federal tax credit for carbon dioxide capture and storage to create equal treatment across different uses of captured carbon. Currently, the law provides different credit amounts depending on whether carbon dioxide is permanently stored underground or used in oil and gas recovery operations, which the bill aims to standardize. Under this legislation, the credit would be set at $17 per metric ton for most uses beginning in 2025 through 2026, then increase to $36 per metric ton thereafter with annual inflation adjustments. The bill affects companies and projects that capture and sequester carbon dioxide, including those engaged in enhanced oil and natural gas recovery and other industrial carbon utilization activities. These changes take effect for tax years beginning after December 31, 2024.
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