Tax Credits Drive U.S. Carbon Capture Deployment

The U.S. Energy Information Administration (EIA) has published its Annual Energy Outlook 2025, introducing a new Carbon Capture, Allocation, Transportation, and Sequestration (CCATS) module to model carbon capture trends.

• CO2 capture at electric power and industrial facilities is projected to increase through the 2030s due to higher tax credit values under the 2022 Inflation Reduction Act (IRA), peaking at 1.5%–3.5% of energy emissions in the late 2030s.
• 45Q tax credits provide $60/ton for EOR and $85/ton for saline storage; credits are available for projects starting before January 1, 2033, and last up to 12 years, with CO2 capture expected to decline as credits expire after the 2040s.