# 45Q Tax Credits and Carbon Capture: What Mineral Owners Need to Know

**TL;DR:** The federal 45Q tax credit provides $60-$180 per metric ton of captured and sequestered CO2, depending on storage method. By default, the credit goes to the carbon capture project developer, not mineral or pore space owners. Mineral owners on CCS-eligible acreage should carefully review any new lease agreements to understand whether and how 45Q credit value may be shared.

## Key Takeaways

- **45Q credits range from $60 to $180 per metric ton** of CO2, with permanent geologic sequestration earning $85/ton, EOR use earning $60/ton, and direct air capture with storage earning up to $180/ton.
- **The project developer collects the credit by default**, not the mineral owner or pore space owner—who receives 45Q value depends entirely on contract language in CCS leases or surface-use agreements.
- **Most pre-2020 oil and gas leases do not address carbon sequestration rights** or 45Q credits, creating potential gaps in how newer CCS projects interact with existing mineral estates.
- **Pore space ownership determines negotiating position**, as CO2 is stored in subsurface pore space typically owned by the surface owner under most state laws.
- **EOR operations using CO2 can generate incremental royalty income** for mineral owners when enhanced recovery produces additional oil on existing leases.
- **Active 45Q projects concentrate in the Illinois Basin, Mississippi EOR fields, Permian Basin, and Gulf Coast**, with multiple Class VI storage permits and EOR-linked sequestration operations.
- **Mineral owners considering any CCS-related document should consult qualified legal and tax professionals** before signing pore-space leases, CCS leases, or surface-use agreements.
- **The Inflation Reduction Act of 2022 substantially expanded 45Q**, raising credit values and extending eligibility deadlines to encourage carbon capture deployment.

## Page Highlights

**What Is 45Q**: Section 45Q is a federal tax credit for capturing CO2 and either sequestering it permanently underground or using it for enhanced oil recovery. Enacted in 2008 and expanded in 2022, current rates range from $60/ton (EOR use) to $180/ton (direct air capture with permanent storage).

**Who Gets the Credit**: By default, the 45Q credit accrues to the party owning the carbon capture equipment and contractually responsible for sequestration—typically the project developer. Mineral and pore space owners do not automatically receive credits; any sharing depends on negotiated lease terms.

**Mineral Owner Considerations**: Existing oil and gas leases rarely address CCS or 45Q credits. Pore space ownership matters because CO2 sits in subsurface pore space. When CO2 is used for EOR on producing wells, mineral owners may earn incremental royalty on additional production. New CCS leases increasingly include provisions for credit-sharing.

**Geographic Concentration**: Most 45Q-eligible projects operate in the Illinois Basin (Wabash Valley Resources), Mississippi EOR/CCUS fields (ExxonMobil assets), Permian Basin (multiple EOR projects), and Gulf Coast (Class VI projects in Louisiana and East Texas).

**When to Consult Professionals**: Mineral owners approached to sign any document related to CO2 sequestration—including CCS leases, pore-space leases, or surface-use agreements—should consult qualified legal and tax advisors before executing contracts.

## Related Topics

- [How to Sell Mineral Rights](https://www.buckheadenergy.com/how-to-sell-mineral-rights)
- [What Are My Minerals Worth?](https://www.buckheadenergy.com/what-are-my-minerals-worth)
- [Should I Sell My Mineral Rights?](https://www.buckheadenergy.com/should-i-sell)
- [Beginner's Guide to Mineral Rights](https://www.buckheadenergy.com/beginners-guide)
- [Getting a Fair Price for Mineral Rights](https://www.buckheadenergy.com/getting-a-fair-price)

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