New York Times, A Rare Trump-Era Climate Policy Hits an Obstacle: The Tax Man:
A rare policy enacted under President Trump to address climate change has run into an unexpected hurdle: the tax man.
In 2018, Congress approved a lucrative tax break for companies that use carbon capture technology to trap carbon dioxide produced by industrial sites before the gas escapes into the atmosphere and heats the planet. The technology is still costly and contentious, but may one day become a valuable tool for slowing global warming. House Republicans are aiming to expand support for carbon capture as part of a broader package of climate bills, the first of which is expected Wednesday.
At least a dozen carbon capture projects, potentially representing billions of dollars in investments, have been announced since Congress passed its 2018 tax break. But two years later, those plans remain blocked because the Internal Revenue Service has yet to explain how, exactly, companies can claim the tax credit that would make the projects viable.
“The delay is unacceptable and will only further slow much-needed investment in carbon capture,” said Senator John Barrasso, Republican of Wyoming and an original co-sponsor of the tax break.
Asked about the delay, an I.R.S. spokesman said Thursday that the agency would begin issuing some guidance “within the next few weeks,” including clarity on how project developers can partner with investors. But other important guidance is still “under development,” the I.R.S. spokesman said.
That includes rules for monitoring underground storage sites and imposing penalties if the carbon dioxide leaks back out. As to why the rules have taken two years, he said the agency has been working through “many challenging issues” raised by companies, environmental groups and other interested parties.
Observers say the I.R.S. has also been busy implementing the vast 2017 Republican tax overhaul, which may partly explain the delay.
But the clock is ticking on its tax credit. By law, companies have to start construction by the end of 2023 to qualify for the credit, but planning and financing large projects can take years. The uncertainty created by the delay, many fear, may prevent projects from getting off the ground.
(Hat Tip: Ted Seto, Mike Talbert)