IRS Provides Safe Harbor for Taxpayers Claiming the Carbon Capture Credit

On December 19, 2025, the IRS released guidance providing a safe harbor for taxpayers wishing to claim the section 45Q tax credit during calendar year 2025. The IRS released this guidance in response to EPA’s plans to repeal the Greenhouse Gas Reporting Program and its electronic GHG reporting tool, which has been used by companies to document their emissions.

IRA section 13104 extended and expanded the tax credit for carbon capture and sequestration in section 45Q of the IRC by decreasing the amount of CO2 needed to be captured to be eligible and increasing the amount of the credit over a longer window of time. Section 70522 of the OBBBA protected these amendments and added “prohibited foreign entity” restrictions to the measure.