As Congress moves forward with its ongoing reconciliation package and considers extending tax cuts adopted during the first Trump administration that are set to soon lapse, lawmakers face a critical decision on the country’s financial future. Every tax dollar going out the door must be scrutinized, particularly those that fail to provide tangible benefits for American taxpayers. One of the first to go should be the tax credit for carbon capture and storage (CCS) technologies.
For decades, federal policymakers have poured billions into CCS, a technology that, despite its promise, has failed to deliver emissions reductions. Instead, as detailed in a study published by The Heartland Institute, CCS has become a textbook example of a government-backed boondoggle that burdens taxpayers and threatens private property rights while offering little in return.
Though the authors have different views on climate science and the impacts of increased carbon dioxide emissions, we agree that federal subsidies for CCS – such as the 45Q tax credit – are a waste of scarce taxpayer money on a technology that threatens property rights and possibly endangers human health.
Structured like a carbon production tax credit, the 45Q program pays out companies on a per ton basis for capturing carbon dioxide (CO₂) emissions from power plants or other industrial sources, which is then transported via freight or pipelines and stored underground in geological formations.
The bipartisan 45Q Repeal Act, introduced by Rep. Scott Perry (R-PA) and Rep. Ro Khanna (D-CA), would finally pull the plug on a program that has funneled tens of billions in tax dollars into a technology riddled with failure, fraud, and risk for American communities, saving taxpayers up to $36.2 billion over the next decade.
CCS remains ineffective at what the technology promises to do – reducing emissions. There is no widely deployable commercial use of captured carbon, other than enhance oil recovery – a technique that has been used by the oil and gas industry since the 1970s to produce more oil and gas by injecting carbon into depleting wells. CCS facilities in the U.S. have been receiving subsidies since 2008, yet they capture just 0.4% of national emissions.
Beyond its economic inefficiencies, CCS poses a serious threat to private property rights. Companies such as Summit Carbon Solutions have sought to use eminent domain – a power traditionally reserved for governments involved in public infrastructure projects – to seize land for CO₂ pipelines. These pipelines do not serve a public purpose; they are profit-driven ventures subsidized by taxpayer dollars.
The South Dakota Supreme Court recently rejected Summit’s claim that it qualifies as a “common carrier,” which would grant it eminent domain authority. The court rightly noted that Summit’s activities – transporting CO₂ for private profit – do not meet the criteria for public use. However, battles over eminent domain continue in multiple states, leaving landowners vulnerable to losing their property for projects with no clear public benefit.
In reality, CCS infrastructure poses significant public risks, because CO₂ pipelines are prone to leaks and ruptures due to the high pressures required to transport supercritical CO₂. A pipeline rupture in Mississippi in 2020 hospitalized dozens of residents, underscoring the dangers inherent in this technology. Storage sites also carry long-term risks of leakage, potentially contaminating groundwater or releasing sequestered CO₂ back into the atmosphere.
Despite limited success and looming liability issues, Congress doubled down on CCS subsidies, by expanding the 45Q tax credits and allocating billions more in grants for new projects in recent years. Now is the time to reverse course.
With no clear public benefit, enormous costs, and direct threats to fundamental property rights, Congress should act to end the 45Q tax credit program for CCS. If CCS makes sense, let the market take over with the private companies profiting from it bearing the full cost of development. Legislators at both federal and state levels must resist pressure from powerful corporate interests seeking taxpayer dollars for CCS. States should follow South Dakota’s lead, and bar the use of eminent domain for CCS pipelines and storage sites.
Americans deserve smarter investments that provide genuine benefit and protect individual rights. Carbon capture and storage accomplishes neither. It’s time policymakers stop throwing good money after bad.
