September 27, 2022 - The Inflation Reduction Act includes a major increase of the tax credits that subsidize carbon capture projects, as well as changes that weakened a key guardrail that was included in the earlier Build Back Better bill that would have required carbon capture projects at power plants to capture at least 75% of a facility’s emissions. That change followed lobbying against the 75% capture rate requirement by the Carbon Capture Coalition, whose members include coal, oil, and power companies.

Between the Inflation Reduction Act’s introduction on July 27 and its passage on August 7, another change further weakened those guardrails in a way that allows power companies to increase the output of coal and gas power plants after installing a carbon capture project in order to maximize revenue from the carbon capture tax credit, without increasing the size of the carbon capture facility.

Combined, the changes could allow power plant operators to receive generous taxpayer subsidies for carbon capture projects, even while increasing their greenhouse gas emissions.