The Carbon Dioxide Removal Investment Act creates a new federal tax credit to encourage investment in technologies that remove carbon dioxide from the atmosphere. The credit offers $250 per metric ton of carbon dioxide removed for most carbon removal projects, with a lower rate of $110 per metric ton for projects using biomass-based carbon capture. These dollar amounts will be adjusted annually for inflation starting in 2026. The credit applies to projects that begin construction before January 1, 2035, and taxpayers can receive the credit for up to 12 years after their project starts operating. To qualify, removal projects must meet strict scientific standards, including demonstrating they can store captured carbon for at least 1,000 years and accurately measure their carbon removal within a 20 percent margin of error. The bill allows eligible businesses to receive direct payments from the government instead of just using the credits to reduce their tax bills, making the program accessible even to entities with no tax liability.
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