45Q Tax Credit Calculator
Section 45Q is the federal tax credit for carbon oxide sequestration and utilization -- the per-ton credit that often makes the difference between a carbon capture and storage (CCS) project penciling out and not. This calculator takes the annual CO2 a project captures and stores or utilizes, the capture pathway (point-source or direct air capture), and the credit rate per ton, then reports the annual 45Q credit value. It pairs naturally with our CO2 Capture Cost Calculator for the cost side the credit offsets, our planned Direct Air Capture (DAC) Cost Calculator for the economics of the higher-rate DAC pathway, and our ITC / PTC Tax Credit Calculator for a comparison to the renewable energy tax credits structured differently.
The annual tonnage of CO2 the project captures and either permanently stores in a qualifying geologic formation or puts to a qualifying utilization use.
Selecting a pathway auto-fills the credit rate below (still editable). Point-source capture pulls CO2 from a concentrated industrial or power plant flue gas stream; direct air capture pulls CO2 from ambient air.
Following the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, Section 45Q now provides a single credit value per pathway regardless of end use (dedicated geologic storage, enhanced oil recovery, or utilization) -- $85/ton for point-source capture and $180/ton for direct air capture, for facilities placed in service after July 4, 2025. These values apply through 2026, after which they're indexed to inflation using 2025 as the base year.
annual CO2 captured and stored/utilized (tons/year) × credit rate ($/ton)
Federal tax credit rules and eligibility requirements can change, and 45Q involves specific technical requirements (minimum annual capture thresholds, secure geologic storage or qualifying utilization standards, and other conditions under 26 U.S.C. 45Q) not captured by this simplified calculator. Consult a qualified tax professional and current IRS guidance before making investment decisions based on 45Q eligibility or value.
Results update live as you type. For planning and field-check estimates — always verify against applicable standards and equipment ratings.
How we calculate this →The One Big Beautiful Bill Act simplified 45Q into a single rate per capture pathway: $85/ton for point-source capture and $180/ton for direct air capture, regardless of whether the CO2 ends up in dedicated storage, enhanced oil recovery, or utilization -- eliminating the previous lower $60/ton rate that applied specifically to EOR projects. At 900,000 tons captured annually, that's $76.5 million a year in point-source credit value, or $162 million a year if the same volume came from direct air capture instead. This credit value is often the difference between a CCS project penciling out and not -- which is exactly why 45Q eligibility requirements and any future legislative changes are worth tracking closely for any project depending on this revenue stream.
How the 45Q tax credit value is calculated
This calculator estimates the annual value of the federal Section 45Q carbon capture tax credit by multiplying the annual tonnage of CO2 a project captures and stores or utilizes by the per-ton credit rate for its capture pathway. One quantity ties the calculation together.
Annual 45Q Credit Value ($/year) = Annual CO2 Captured and Stored/Utilized (tons/year) × Credit Rate ($/ton). The credit rate is set by statute based on capture pathway: $85/ton for point-source capture (industrial or power facility flue gas) and $180/ton for direct air capture (ambient air), under the One Big Beautiful Bill Act (OBBBA) for facilities placed in service after July 4, 2025. Multiplying the annual captured tonnage by the applicable rate gives the total annual credit the project can claim. At the defaults (900,000 tons/year and $85/ton for point-source capture), that is 900,000 × $85 = $76,500,000/year.
Two notes on the model. First, the credit rate is the single most consequential input, and under OBBBA it now depends only on capture pathway -- not on end use -- so point-source projects receive $85/ton whether the CO2 goes to dedicated geologic storage, enhanced oil recovery, or utilization, and DAC projects receive $180/ton regardless of end use; these values apply through 2026, after which they are indexed to inflation using 2025 as the base year. Second, this calculator covers the credit-value calculation only and does not model the 12-year credit claim period, the construction-start deadline (before January 1, 2033, under current law), minimum annual capture thresholds that vary by facility type, secure geologic storage or qualifying utilization requirements, or restrictions on certain foreign-linked entities -- all of which affect actual eligibility and lifetime credit value, so consult a qualified tax professional and current IRS guidance before relying on these figures. For the capture cost this credit typically offsets, see the CO2 Capture Cost Calculator; for how renewable energy tax credits are structured differently (as a percentage of capital cost or per unit of electricity, rather than per ton of CO2), see the ITC / PTC Tax Credit Calculator. Data sources: Section 45Q credit rates and eligibility structure from the One Big Beautiful Bill Act (OBBBA, signed July 4, 2025) and 26 U.S.C. 45Q; 45Q history and expansions from the 2008 original enactment, the 2018 FUTURE Act, and the 2022 Inflation Reduction Act; credit claim period and construction-start deadline from current federal statute and IRS guidance. Verification: with defaults (900,000 tons/year, Point-Source Capture, $85/ton), Annual 45Q Credit Value = $76,500,000/year.