119th Congress (2025-2026)

S 3778

Carbon Resource Innovation Act

Introduced

Jurisdiction

US Congress

Session

119th Congress (2025-2026)

Official source

Chamber

Senate

Session

119th Congress (2025-2026)

Jurisdiction

US Congress

Bill overview

This bill, the Carbon Resource Innovation Act, amends the Internal Revenue Code to expand the carbon oxide sequestration credit. It allows for tax credits for facilities that capture carbon in solid or liquid form, including direct air capture facilities and those that compare their emissions to a baseline. The bill also increases the amount of carbon that must be captured to qualify for the credit and clarifies the definition of a ‘solid or liquid carbon capture facility.’

Key provisions

Expands the carbon oxide sequestration credit to include solid and liquid carbon capture facilities.
Allows for tax credits for facilities capturing carbon in solid or liquid form.
Increases the minimum carbon capture requirement to 1,000 metric tons per year for qualifying facilities.
Defines ‘solid or liquid carbon capture facility’ as a facility using equipment to capture carbon in solid or liquid form.
Clarifies that captured carbon must be measured at the source and verified at disposal, injection, or utilization.
Includes underground storage chambers as part of the definition of a solid or liquid carbon capture facility.
Specifies that the amount of carbon captured is equal to the carbon dioxide equivalent of the metric tons of carbon measured and verified.

Who is affected

Businesses involved in carbon capture technology
Energy companies
Manufacturers
Taxpayers
The fossil fuel industry

Positions across the country

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Legislative history

2026-02-04Senate

Read twice and referred to the Committee on Finance.

2026-02-04

Introduced in Senate

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Feb 4, 2026XMLView source

119th CONGRESS — 2d Session

S. 3778

IN THE SENATE OF THE UNITED STATES

A BILL

To amend the Internal Revenue Code of 1986 to expand the carbon oxide sequestration credit to include solid or liquid carbon capture facilities.

1.Short title

This Act may be cited as the

Carbon Resource Innovation Act

2.Expansion of carbon oxide sequestration credit to include solid or liquid carbon capture facilities

(a)In general

Section 45Q of the Internal Revenue Code of 1986 is amended—

(1)

in subsection (c)(1)—

(A)

in subparagraph (B)(iii), by striking or at the end,

(B)

in subparagraph (C)(ii), by striking the period at the end and inserting , or, and

(C)

by adding at the end the following new subparagraph:

(D)

in the case of a solid or liquid carbon capture facility, any carbon which—

(i)is captured in liquid or solid form by carbon capture equipment,

(ii)if not captured, would be expected to—

(I)be released into the atmosphere by natural processes as an emission of greenhouse gas, or

(II)lead to such release through a comparison system (as such term is used in Treasury Regulation section 1.45Q–4(c)(2)), and

(iii)is measured at the source of capture and verified at the point of disposal, injection, or utilization.

(2)

in subsection (d)—

(A)

in the matter preceding paragraph (1), by striking or direct air capture facility and inserting , direct air capture facility, or solid or liquid carbon capture facility, and

(B)

in paragraph (2)—

(i)in subparagraph (B)(ii), by striking or at the end,

(ii)

by redesignating subparagraph (C) as subparagraph (D), and

(iii)

by inserting after subparagraph (B) the following new subparagraph:

(C)

in the case of a solid or liquid carbon capture facility, captures not less than 1,000 metric tons of qualified carbon oxide during the taxable year, or

(3)

in subsection (e)—

(A)

by redesignating paragraph (5) as paragraph (6), and

(B)

by inserting after paragraph (4) the following new paragraph:

(5)Solid or liquid carbon capture facility

(A)In generalThe term solid or liquid carbon capture facility means any facility which uses carbon capture equipment to capture carbon in solid or liquid form that would otherwise be released into the atmosphere as a carbon oxide, including a facility which results in a net reduction of carbon when compared to a comparison system (as described in Treasury Regulation section 1.45Q–4(c)(2)).

(B)Other termsWith respect to a facility described in subparagraph (A)—

(i)the term capture means, with respect to carbon, the process which enables disposal, injection, or utilization of such carbon, and

(ii)

the term carbon capture equipment means any equipment used at such facility.

, and

(4)

in subsection (f)—

(A)in paragraph (2), by inserting , and in the case of solid or liquid carbon capture facilities, shall also include underground storage chambers under such conditions that the carbon does not escape into the atmosphere after under such regulations, and

(B)

by adding at the end the following new paragraph:

(11)Carbon captured by solid or liquid carbon capture facility

For purposes of this section, the amount of carbon which is captured by the taxpayer at a solid or liquid carbon capture facility shall be equal to the carbon dioxide equivalent of the metric tons of carbon which are measured at the source of capture and verified at the point of disposal, injection, or utilization.

(b)Effective date

The amendments made by this section shall apply to carbon captured after the date of enactment of this Act.

S 3778

Bill overview

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