On July 4, 2025, the One Big Beautiful Bill Act changed the math behind carbon capture. Section 45Q, the federal tax credit that underpins the economics of carbon capture in the United States, now pays the same per ton whether you lock the CO₂ underground or turn it into a product. For the first time, using captured CO₂ is worth as much on the tax form as burying it.
The Thumb Comes Off the Scale
For three years that was not the case. Under the 2022 Inflation Reduction Act, a ton of CO₂ sent to dedicated geologic storage earned more credit than the same ton used as an injectant in oil recovery or converted into something useful. The gap was not small, and it shaped behavior. If the tax code pays more to bury carbon than to use it, developers build to bury it.
Parity removes that tilt. The three qualifying paths under 45Q are unchanged: secure geologic storage, use as a tertiary injectant in enhanced recovery, or other utilization such as converting the gas into a product. What changed is that they now carry the same per-ton value. The direct pay and transferability rules the Inflation Reduction Act added, which let projects monetize the credit without a large tax bill to offset, carried through as well.
Two Roads for a Captured Ton
A ton of captured CO₂ has to go somewhere. It takes one of two roads. It goes down a well for permanent storage, or it goes into a product: a carbonated drink, a greenhouse, a water treatment plant, a food freezing line. Until this summer the tax code nudged that decision toward the well. Now the credit is agnostic. The rest of the system is not.
The credit treats the two roads as equal. Nothing else does.
What Burying It Actually Takes
Storing CO₂ underground is regulated by the EPA under the Safe Drinking Water Act, through a dedicated well category called Class VI. The purpose of the rule is to keep injected CO₂ from reaching underground sources of drinking water, so it demands site characterization, area-of-review analysis, mechanical integrity testing, and financial assurance before a molecule ever goes down the hole.
Getting a Class VI permit is slow. EPA reviews have often run two years or more. Six states hold their own Class VI permitting authority as of early 2026, with more applications pending, and approvals tend to move faster there. Once injection starts, the obligation does not end when the well is full. The federal default is fifty years of post-injection site care and monitoring before a site can be closed, and the operator reports under the greenhouse gas program's Subpart RR every year for the life of the project.
A storage well does not ask the CO₂ to be clean. It asks you to keep it contained and to prove containment for decades. You can inject a stream that no beverage company would ever accept, and the rule is satisfied.
What Selling It Takes
Utilization runs on the opposite logic. The credit now says using CO₂ is as good as storing it. The market says using it comes with a spec. The moment captured CO₂ goes into food or drink, it stops being an industrial gas and becomes a food ingredient. The FDA affirms carbon dioxide as generally recognized as safe for direct addition to food under Title 21 of the Code of Federal Regulations, section 184.1240, on the condition that it is clean enough for that use and handled under good manufacturing practice.
For beverages, clean enough has a number. Beverage grade CO₂ is certified to the guidelines published by the International Society of Beverage Technologists, which set a minimum purity of 99.9 percent and hold roughly twenty individual impurities to their own limits. Aromatic hydrocarbons, measured as benzene, are capped at 20 parts per billion. Total sulfur sits at a tenth of a part per million. Every load ships with a certificate proving that specific batch cleared the spec, because last month's clean run says nothing about today's trailer.
A Class VI well would take that same molecule at a fraction of the purity. A bottler will reject it at the gate.
The Credit Was Never the Hard Part
This is why parity, welcome as it is, does not change the real work. The tax code finally stopped favoring the hole in the ground. It did not lower the bar for the alternative. Turning captured CO₂ into a product still means purifying it to a food ingredient's specification and documenting every load, and that is engineering, not tax planning.
It is the engineering CleanCycleCarbon is built around. We capture CO₂ off the back end of a renewable natural gas upgrader and purify it with a patent pending cryogenic process to full beverage grade at our facility in Lewiston, North Carolina. The credit helps the economics of doing that. It does not do the purification. Nothing on a tax form makes a stream clean enough to carbonate a drink.
What the Change Actually Tells You
If you evaluate a capture project or a CO₂ source, the credit used to be a signal. A project built for storage was chasing the higher-value path, and a project built for utilization was accepting less. That signal is gone. Under current law both roads pay the same, so the credit tells you less than it once did about which one makes sense.
What separates them now is the question each road has to answer. Storage asks whether you can contain the CO₂ and monitor it for fifty years. Selling asks whether you can certify it on the trailer sitting at the dock today. Both are hard. Only one of them ends with a product a customer is willing to buy, and for that one, beverage grade is still the bar the tax code never set.
