Lawmakers and climate advocates are questioning the ability of the IRS and EPA to ensure that companies storing carbon dioxide underground are not exploiting new tax subsidies.
Minho Kim reports for The New York Times.
In short:
- President Biden’s 2022 climate law increased tax subsidies for carbon capture, which the oil industry supports as a way to reduce emissions.
- Critics, including environmentalists and some lawmakers, argue the IRS lacks the means to verify companies' self-reported data on carbon storage.
- Recent reports show that many carbon capture tax credits were wrongfully claimed due to inadequate oversight of sequestration site data.
Key quote:
The agencies do not “go out into the real world and track CO2 emissions from carbon capture facilities. They’re just accepting these reports as they come in.”
— Maggie Coulter, a senior attorney at the Center for Biological Diversity
Why this matters:
Carbon capture is a key element of U.S. climate policy, but if poorly regulated, tax subsidies could be misused, undermining efforts to reduce emissions. Proper verification is critical to ensuring that this approach genuinely contributes to climate goals.
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