IRC §45Q · production credit

Section 45Q: selling the Carbon Oxide Sequestration Credit

A per-ton credit for capturing carbon oxide and storing or using it, earned for 12 years and sold one facility and one year at a time.

Verified 11 Oct 2026 · IRS Form 8933, Carbon Oxide Sequestration Credit

Who earns it and how it is measured

The credit is earned on each metric ton of qualified carbon oxide captured with carbon capture equipment at a qualified facility and then stored in secure geological storage or used in a qualified way^[1]. It runs for 12 years from the date the carbon capture equipment is placed in service^[1].

The base amount is $17 per ton, or $36 for direct air capture; five times those amounts ($85 and $180) where the prevailing wage and apprenticeship requirements are met. The amounts are adjusted for inflation for tax years beginning after 2026^[1].

A facility must begin construction before 1 January 2033, together with its carbon capture equipment or with capture built into its original design^[1].

What changed in 2025

• Parity for utilization. For facilities or equipment placed in service after 4 July 2025, carbon oxide that is used (including in enhanced oil or gas recovery) earns the same amount as carbon oxide in geological storage^[1].
• Foreign entities. For tax years beginning after 4 July 2025, no credit if the taxpayer is a specified foreign entity or a foreign-influenced entity^[1], and the credit cannot be transferred to a specified foreign entity^[2].

Selling it

§45Q is sold separately for each facility and each tax year of the 12-year period^[2].

1. Register each facility and renew the registration for each year you sell^[3], at least 120 days before the return’s due date^[4].
2. Claim on Form 8933^[5] and report the transfer on Form 3800, Part III, column (f)^[6].
3. Attach the transfer election statement to an original, timely return^[7].

What buyers ask for on a §45Q deal: capture and injection or utilization measurements; the storage monitoring basis; the construction-start evidence; prevailing wage and apprenticeship records if the higher amount is claimed; and the contract terms for §45Q recapture, which applies if stored carbon oxide later escapes. The regulations treat a §45Q recapture event as separate from an excessive credit transfer^[8], so the purchase agreement has to say who bears it.

Frequently asked questions

Does §45Q now treat all utilization pathways the same?

For facilities or equipment placed in service after 4 July 2025, the statute sets one amount for storage and qualified utilization^[1]. Earlier equipment keeps the amounts that applied when it was placed in service.

Which form is used for §45Q?

Form 8933, Carbon Oxide Sequestration Credit^[5].

Market price

No credit-specific price is published for §45Q; across the market, most transferable credits sold for 80 to 96 cents per dollar in 2026; large, insured, investment-grade deals near the top and small uninsured deals near the bottom.^{[Cenet Capital]}

Market estimate, not an offer. Prices move with buyer demand, deal size, seller credit quality, insurance and foreign-entity exposure. Run your own figures in the Credit Value Estimator, or compare every published report on the prices page.

Deadlines for §45Q

1. 4 Jul 2025
   No transfers of these credits to a specified foreign entity

   For tax years beginning after 4 July 2025, credits under §§45Q, 45U, 45X, 45Y, 45Z and 48E may not be transferred to a specified foreign entity.
2. 31 Dec 2032
   §45Q: construction must begin before 1 January 2033

   A capture facility must begin construction (of the facility and its capture equipment, or with capture designed in) before 1 January 2033.