Senator Tim Sheehy has introduced the Carbon Resource Innovation Act, a bipartisan bill designed to expand eligibility for the 45Q carbon capture tax credit. The proposed legislation would allow companies using private sector technology that captures carbon in liquid or solid forms, rather than just gaseous form, to qualify for the tax credit. Senator Maria Cantwell joined as a co-sponsor.
“As we continue to enact commonsense reforms to make our forests and communities more resilient against the growing threat of wildfire, it is critical we use the innovative technology and tools at our disposal to ensure proper fuels management. I’m proud to lead yet another bipartisan bill to achieve that goal and keep our treasured landscapes, homes, and businesses safe from the threat of wildfire,” said Senator Sheehy.
The 45Q tax credit currently incentivizes capturing CO2 emissions from industrial sources or directly from the atmosphere for storage or utilization. However, under existing rules, only technologies capturing CO2 in gaseous form are eligible. This restriction excludes methods that sequester carbon in liquid or solid states, even though these also help reduce emissions and can be used for purposes such as wildfire fuel reduction and new industrial applications.
The Carbon Resource Innovation Act aims to update these limitations by including technologies that capture carbon in any form—liquid or solid—as long as they meet current verification standards and prevent CO2 emissions. The bill is intended to support innovation by eliminating the need for Congress to review each new qualifying technology individually, providing greater certainty for companies developing new solutions.
Examples of currently excluded but potentially eligible technologies include methane pyrolysis—which produces hydrogen and solid carbon—and Biomass Carbon Removal and Storage (BiCRS), which converts atmospheric CO2 captured by agricultural or forestry residues into storable forms. These processes can create additional revenue streams for farmers while reducing wildfire risk through better management of organic waste materials.
Supporters say the act will provide a clear path for future technological advancements in carbon management while supporting responsible forest practices across the country.
