Section 45Q: The Credit OBBBA Left Standing

How 45Q Pays

Section 45Q pays a fixed dollar amount per metric tonne of carbon oxide captured and disposed of, for twelve years from the date the capture equipment is placed in service. With prevailing wage and apprenticeship compliance, the 2026 values are $85 per tonne for point-source capture and $180 for direct air capture; without labour compliance, one fifth of those amounts. Inflation indexation begins in 2027.

Since OBBBA, the disposition route no longer changes the rate: dedicated geologic storage, enhanced oil recovery and qualified utilization all earn the same amount. Before July 2025, EOR and utilization earned roughly 30 percent less; the change re-prices any project with an offtake to oilfield injection.

Who Qualifies

Eligibility turns on minimum annual capture volumes set by facility class:

The credit belongs to the owner of the capture equipment, with an election to shift it to the party that disposes of or utilizes the CO₂ — the contractual hinge on which most multi-party projects are structured. Construction must begin before January 1, 2033, a runway OBBBA notably declined to shorten.

Monetisation: The Widest Menu

45Q carries the most flexible monetisation options in the code. Tax-exempt and public owners take elective pay for the full twelve years. Taxable owners — uniquely, along with 45V and 45X — may elect direct pay for the first five years of the credit period, converting early-year credits into refunds while the project builds taxable income. And section 6418 transfer is available throughout: credits sell for cash to unrelated buyers, with the buyer taking recapture risk.

The FEOC regime touches 45Q lightly: prohibited foreign entities cannot claim it, and transfers to specified foreign entities are barred, but there is no content test and no ten-year payment rule — a materially simpler compliance surface than 48E.

What to Watch

• Recapture — leaked CO₂ within three years of the credited tonne unwinds credits; monitoring, reporting and verification under Subpart RR (or ISO-based equivalents for EOR) is the evidence spine.
• Utilization pathways — lifecycle analysis requirements for utilization routes remain the least standardised corner of the regime.
• Administration — a 2026 GAO report pressed the IRS on 45Q oversight; expect documentation scrutiny to rise, not fall.
• Interaction with 45V — a hydrogen facility claiming 45Q on its capture equipment cannot also claim 45V; projects at that intersection elect one credit, on economics.

Stacking With Clean Fuel Programmes

Capture value does not stop at the federal per-tonne credit. Where the CO₂ comes off a fuel production process — ethanol, RNG, hydrogen, refining — the capture lowers the fuel’s lifecycle carbon intensity, and that CI reduction prices directly into the clean fuel programmes: a deeper LCFS credit per gallon in California, a stronger CFR pathway in Canada, and under the LCFS’s dedicated CCS protocol, credits for the captured tonnes themselves.

Two elections draw the boundaries. A facility claiming 45Q cannot also claim 45V on its hydrogen, and a facility for which 45Q is allowed for the year sits outside 45Z — so fuel producers adding capture model the per-tonne credit against the per-gallon credit and elect the better side, while the fuel-programme value stacks in either case. Running that comparison before FEED is the cheapest money in the project.