45Q Tax Credits & Mineral Owners: A 2026 Guide

What Is the 45Q Tax Credit?

Section 45Q of the Internal Revenue Code provides a federal tax credit for capturing carbon dioxide and either sequestering it permanently in deep geologic formations or using it for enhanced oil recovery (EOR). Originally enacted in 2008, the credit was substantially expanded by the Inflation Reduction Act of 2022, which raised the credit value and extended eligibility deadlines.

The credit's published amounts: the IRS Instructions for Form 8933 (revised December 2025) list, for carbon capture equipment placed in service after 2023 and before July 5, 2025, a base amount of $17 per metric ton for secure geological storage and $12 per metric ton for enhanced oil recovery or utilization; for equipment placed in service after July 4, 2025, $17 per metric ton for both; and, for direct air capture facilities, $36 per metric ton for secure geological storage and $26 per metric ton for enhanced oil recovery or utilization. Equipment placed in service earlier uses different amounts, and the other conditions in the instructions decide which amount applies.

$17 per metric ton base amount — secure geological storage — carbon capture equipment placed in service after 2023 (and after July 4, 2025)

$12 per metric ton base amount — enhanced oil recovery or utilization — carbon capture equipment placed in service after 2023 and before July 5, 2025 ($17 per metric ton for equipment placed in service after July 4, 2025)

$36 per metric ton base amount — direct air capture facilities, secure geological storage

$26 per metric ton base amount — direct air capture facilities, enhanced oil recovery or utilization

These are the credit's published terms, not an amount any owner or project will receive. A tax professional should advise on how the credit applies to a specific project or agreement.

Who Collects the 45Q Credit?

By default, the 45Q credit goes to the party that owns the carbon capture equipment and is contractually responsible for sequestration — typically the project developer or operator. The credit is taxable-event-triggered; it accrues to the qualifying party at the time CO2 is captured and disposed of in qualifying storage.

Mineral owners and pore space owners do NOT automatically receive 45Q credits. Whether the mineral or pore space owner shares in the credit value depends entirely on the contract between the project developer and the mineral/pore-space owner — typically a CCS lease, pore-space lease, or surface-use agreement that addresses 45Q allocation.

Mineral Owner Implications

For mineral owners on CCS-eligible acreage:

Existing oil and gas leases typically do not address 45Q. Pre-2020 lease forms predate the modern CCS framework and rarely contemplate sequestration rights.

Pore space ownership matters. 45Q is paid on sequestered CO2, which sits in pore space — typically owned by the surface owner under most state laws.

EOR overlap creates royalty opportunity. CO2 used for EOR on producing wells generates incremental oil production, which generates incremental royalty.

New CCS leases may include credit-sharing. Project developers negotiating new CCS leases sometimes share 45Q value with the surface or pore-space owner as part of the deal terms.

Mineral owners considering signing any document related to CO2 sequestration — CCS lease, pore-space lease, surface-use agreement — should

Where 45Q Activity Is Concentrated

Active 45Q-eligible CCS projects are concentrated in:

Illinois Basin — Wabash Valley Resources hub (southwest Indiana), Mt. Simon Sandstone storage

Mississippi EOR/CCUS Fields — ExxonMobil's Tinsley, Heidelberg, Little Creek, Cranfield fields

Permian Basin — multiple operator EOR projects with CO2 from natural sources

Gulf Coast — multiple permitted Class VI projects in Louisiana and East Texas

Mineral Rights on CCS-Eligible Acreage

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