Group of State and Local Officials Call on Congress to End Tax Credits for Carbon Sequestration

State Senator Tim Mathern, D-Fargo. (Michael Achterling/North Dakota Monitor)

(South Dakota Searchlight) – Over 100 state and local officials from the Midwest and West, including  North Dakota and South Dakota, are asking the U.S. Senate to eliminate tax credits for carbon capture and sequestration as part of a federal budget reconciliation bill.

Established by Congress and President George W. Bush in 2008, the 45Q tax credits incentivize companies to capture carbon dioxide from processes such as ethanol production and sequester it underground, so it won’t contribute to climate change by acting as a greenhouse gas in the atmosphere. The carbon can also be sequestered as part of enhanced oil recovery, in which pressurized gas is used to push more oil to the surface.

Opponents say the credits don’t work as intended.

“The 45Q tax credits really only make sense to the industries that are poised to make billions of dollars from them,” said North Dakota state Sen. Tim Mathern, D-Fargo. “They are supposedly intended to reduce carbon emissions, but in fact, 45Q tax credits pay polluters for polluting and subsidize private oil production at the expense of the taxpayer.”