The U.S. Environmental Protection Agency (EPA) has proposed suspending most reporting requirements under the Greenhouse Gas Reporting Program (GHGRP). This means that carbon dioxide (CO2) sequestration projects or facilities that emit more than 25,000 metric tons of CO2 equivalent per year would no longer be subject to GHGRP reporting under subparts PP, RR, UU, and VV at least until 2034—if the proposed rule is adopted. The initial Greenhouse Gas Reporting Rule was mandated by Congress in 2008 and promulgated under the Clean Air Act. 

While most GHGRP reporting requirements may soon be null, this information has often historically been used to verify eligibility for the 45Q tax credit program. This Delve explains the connection between the 45Q program and GHGRP reporting.  

45Q Tax Credit Program Impacts 

45Q provides tax credits for captured and sequestered carbon dioxide. The tax credit is administered by the Internal Revenue Service. To claim the 45Q tax credit, operators indicate the credit on their tax returns and only need to supply documentation if they are audited.  

Changes to the GHGRP don’t directly impact operators claiming the 45Q tax credit. But the reports required under GHGRP can be useful for supporting claims in tax filings. Even without the GHGRP reporting requirements, operators seeking to claim the 45Q tax credit may need to provide similar information if they are audited under the 45Q tax credit program.  

What’s Next for GHG Reporting? 

While federal reporting under the Clean Air Act may no longer apply, state-level reporting will continue and potentially expand, differing from state to state. For example, Colorado currently has a robust GHG reporting system.