(The Center Square) – Louisiana’s industrial giants could net more than $3.5 billion in federal tax credits if their carbon capture and sequestration projects move forward as planned.
The estimate is based on the 45Q tax credit, a federal program that pays companies $85 per metric ton of carbon dioxide captured and stored from industrial and power facilities.
According to project data compiled by the Environmental Integrity Project, at least 17 announced projects in Louisiana’s chemical, refining, and liquified natural gas sectors would qualify under the “industry and power” and “direct air capture” category of the credit.
In total, those 17 projects are estimating that some 42 million tons of carbon dioxide would be captured, either for storage or to be reused in other industrial projects.
The data lists a total of 43 carbon capture and storage projects and 10 pipelines that will function to transport captured carbon. Twenty-two of the projects listed include regional “hubs,” an infrastructural network that “takes carbon dioxide from several emitting sources, such as heavy industries and power, and then transports and stores it using common infrastructure,” according to the Oil and Gas Climate Initiative.
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The 45Q incentive applies once a qualifying project either locks captured carbon underground in approved geological sites – such as saline formations or depleted oil and gas reservoirs – or puts the carbon to work as an input for making low-carbon fuels, chemicals, or construction materials.
The 45Q credit was strengthened in the 2022 Inflation Reduction Act and reaffirmed this summer in the “One Big Beautiful Bill Act” signed by President Donald Trump. Prior to the act, the maximum tax credit available for carbon oxides that were permanently sequestered through EOR projects or other utilization methods was $60 per ton.
Some of the largest projects carry the biggest potential payouts.
For the Ascension Clean Energy Facility in Ascension Parish, a projected capacity to capture 12 million tons annually could generate over $1 billion per year in tax credits.
For the Air Products Darrow Blue Energy Facility in Ascension Parish and the St. Rose Blue Ammonia Facility in St. Charles Parish, each could receive about $425 million annually.
G2 Net-Zero Energy Complex in Cameron Parish would be eligible for roughly $340 million per year.
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Several other ammonia, methanol, and LNG facilities – including Donaldsonville Nitrogen Complex, Cameron LNG Facility, and CF Industries/Mitsui Gulf Coast Blue Ammonia Plant – would qualify for between $85 million and $170 million annually.
Several other ventures, such as Commonwealth LNG, Big Lake Fuels, and Methanex Geismar Methanol, have not disclosed projected capture volumes, meaning the ultimate credit tally could climb even higher, according to the Project.
