IRS extends CCS credit safe harbor, as EPA targets GHG reporting rules

Source: By Doug Obey, Inside EPA • Posted: Tuesday, August 18, 2026

The IRS is extending a “safe harbor” for developers to continue claiming the section 45Q carbon capture and storage tax credit, to buy more time for EPA and the Treasury Department to reconcile rules for claiming the credit with EPA’s plan to scrap its Greenhouse Gas Reporting Program (GHGRP) that has supported the credit’s implementation.

The move surfaces in an Aug. 14 notice that also expands the scope of the safe harbor to include “qualified carbon oxide that is used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project,” as well as guidelines for determining how much carbon is “leaked to the atmosphere” as part of an effort to calculate how many 45Q credits the IRS can “recapture.” Further, IRS officials are also seeking comment — alongside EPA, the Energy Department and the Interior Department — on the “appropriate standard” to be used in place of EPA’s GHGRP subpart RR requirements for underground injection of carbon dioxide to show compliance with the 45Q rules.

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