Daily on Energy: Developers seek IRS fix for carbon capture rules

Washington Examiner: Daily on Energy: Developers seek IRS fix for carbon capture rules

June 01, 2020

United States
United States
United States

Eversheds Sutherland Partner Amish Shah is quoted in this Washington Examiner article on the recently released proposal for expanded tax credits for carbon capture projects. 

"This isn’t the sort of situation where you can get 80% of the rules right," Amish said. "This is a new industry that requires a lot of capital infusion. For people to do that, they need real certainty."

The Internal Revenue Service (IRS) drafted a stricter recapture provision than many carbon capture developers had recommended — a move Amish said could expose investors to too much risk that the government could reclaim the credit.

The recapture provisions spell out the circumstances under which companies would have to pay back the tax credit if CO2 leaks.

"The concern has always been if there’s perpetual liability, there would be no investment," he said, adding that he is hopeful the IRS will tweak the recapture provisions in its final version, to at least allow for more exceptions for events outside of companies’ control.

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