US carbon capture incentives are at the center of the nation’s decarbonization strategy. Washington is betting billions through the Inflation Reduction Act (IRA) and additional reforms, making CCUS one of the most financially supported climate technologies in history. Yet regulatory bottlenecks, permitting delays, and political uncertainty mean executives must weigh both the upside potential and the execution risks.
Key Takeaways on US Carbon Capture Incentives
- Section 45Q currently provides $85 per ton for point-source sequestration and $180 per ton for Direct Air Capture (DAC).
- New proposals like Section 45BB and the Enhanced Energy Recovery Act aim to create higher and more flexible credits.
- Policymakers intend for CCUS to become a core pillar of U.S. decarbonization.
- Administrative delays and permitting backlogs create risks for developers.
- Executives must balance financial upside with regulatory uncertainty.
Where the Money Is
Section 45Q: The Backbone of US Carbon Capture Incentives
The IRA expanded Section 45Q into a powerful investment driver. It offers $85 per ton of captured CO₂ from industrial and power sources and $180 per ton from DAC projects. At these levels, projects once considered too costly now appear financially viable.
Section 45BB and the Enhanced Energy Recovery Act: Next Steps
Two new proposals could reshape US carbon capture incentives further. Section 45BB creates a technology-neutral framework that rewards any verified carbon reduction. The Enhanced Energy Recovery Act expands eligibility and increases payouts, opening doors for industries beyond cement, steel, and power.
Learn more about Section 45Q explained by the U.S. Department of Energy.
The Bottleneck: Administrative Delays
Even with strong incentives, execution is not guaranteed. Permitting pauses and agency restructuring are slowing project approvals. For investors, this creates a paradox: projects are profitable on paper but risky in practice due to regulatory lag.
Why This Matters for Executives
Financial Strategy
Credits can turn CCUS into a strategic asset, not just a compliance cost.
Competitive Positioning
Early movers capture tax benefits and goodwill before policy or politics shift.
Risk Management
Delays or regulatory changes could strand capital, making scenario planning essential.
Investor Relations
Communicating a clear approach to US carbon capture incentives builds trust with ESG-focused investors.
See how McKinsey assesses the economics of CCUS.
Case in Point
This moment mirrors the early days of solar subsidies. Initially dismissed as costly and uncertain, solar power became mainstream and profitable for early adopters. US carbon capture incentives could follow the same trajectory, but with more political visibility and bureaucratic complexity. The winners will be those who master both finance and regulation.
What US Carbon Capture Incentives Mean for Leaders
- Run scenario models based on current 45Q and potential reforms under 45BB.
- Build regulatory expertise to speed permitting and compliance.
- Time investments to align with incentive windows while accounting for delays.
Bottom Line
The U.S. has never offered such strong financial support for carbon capture. The incentives are substantial, but so are the risks. Executives who understand both sides of the equation will not only capture CO₂ but also capture market leadership in the next wave of industrial decarbonization.
