Form 8933 Carbon Dioxide Sequestration Credit

Form

8933

OMB No. 1545-2132

Carbon Dioxide Sequestration Credit

Department of the Treasury
Internal Revenue Service
Name(s) shown on return

©

Attach to your tax return.

2010
Attachment
Sequence No.
Identifying number

165

Qualified carbon dioxide captured at a qualified facility, disposed of in secure geological
storage, and not used as a tertiary injectant in a qualified enhanced oil or natural gas
recovery project.
1a Metric tons captured and disposed of (see instructions)
b Inflation–adjusted credit rate
c Multiply line 1a by line 1b

$20.24
1c

Qualified carbon dioxide captured at a qualified facility, disposed of in secure geological
storage, and used as a tertiary injectant in a qualified enhanced oil or natural gas recovery
project.
2a Metric tons captured and used (see instructions)
b Inflation–adjusted credit rate
c Multiply line 2a by line 2b

$10.12
2c

3

Carbon dioxide sequestration credit from partnerships and S corporations

3

4

Add lines 1c, 2c, and 3. Partnerships and S corporations, report this amount on Schedule K, all
others, report this amount on Form 3800, line 1x

4

General Instructions

Inflation Adjustment

Section references are to the Internal Revenue Code.

For 2010, the $20 and $10 rates are adjusted for inflation.

Purpose of Form
Use Form 8933 to claim the carbon dioxide sequestration credit.
The credit is allowed for qualified carbon dioxide that is captured
and disposed of or captured, used, and disposed of by the
taxpayer in secure geological storage. Only carbon dioxide
captured and disposed of or used as a tertiary injectant within
the United States or a U.S. possession is taken into account
when figuring the credit. See Definitions, below.
For the purposes of this form, a partner in a partnership that
has made a valid section 761(a) election will be considered the
taxpayer. Partnerships with valid section 761(a) elections are not
required to complete or file this form. Instead, the partner is
required to complete and file this form in a manner
commensurate with its undivided ownership interest in the
qualified facility.
Taxpayers other than partnerships or S corporations whose
only source of this credit is from those pass-through entities
(other than a partnership with a valid 761(a) election) are not
required to complete or file this form. Instead, report this credit
directly on line 1x of Form 3800, General Business Credit.

How To Figure the Credit
Generally, the credit is $20 (adjusted for inflation) per metric ton
for qualified carbon dioxide captured at a qualified facility,
disposed of in secure geological storage, and not used as a
tertiary injectant in a qualified enhanced oil or natural gas
recovery project.
Generally, the credit is $10 (adjusted for inflation) per metric
ton for qualified carbon dioxide captured at a qualified facility,
used as a tertiary injectant in a qualified enhanced oil or natural
gas recovery project, and disposed of in secure geological
storage.
For the purpose of calculating the credit, a metric ton of
carbon dioxide includes only the contained weight of the carbon
dioxide. The weight of any other substances, such as water or
impurities, is not included in the calculation.
For Paperwork Reduction Act Notice, see back of form.

The 2010 credit rates are:
● $20.24 for qualified carbon dioxide captured at a qualified
facility, disposed of in secure geological storage, and not used
as a tertiary injectant in a qualified enhanced oil or natural gas
recovery project; and
● $10.12 for qualified carbon dioxide captured at a qualified
facility, disposed of in secure geological storage, and used as a
tertiary injectant in a qualified enhanced oil or natural gas
recovery project.
For more details, see Notice 2010-75, 2010-48 I.R.B. 781,
available at www.irs.gov/irb/2010-48_IRB/ar07.html.

Definitions
Qualified Carbon Dioxide
Qualified carbon dioxide is carbon dioxide captured after
October 3, 2008, from an industrial source that:
● Would otherwise be released into the atmosphere as industrial
emission of greenhouse gas, and
● Is measured at the source of capture and verified at the point
of disposal or injection.
Qualified carbon dioxide also includes the initial deposit of
captured carbon dioxide used as a tertiary injectant. However, it
does not include carbon dioxide that is re-captured, recycled, or
otherwise re-injected as part of the enhanced oil and natural gas
recovery process.
Qualified carbon dioxide does not include carbon dioxide that
is captured and sequestered in a project to the extent required
under an agreement executed with the IRS under the qualifying
advanced coal project program of section 48A or the qualifying
gasification project program of section 48B.

Qualified Facility
A qualified facility is any industrial facility that is owned by the
taxpayer where carbon capture equipment is placed in service

Cat. No. 37748H

Form

8933

(2010)

Form 8933 (2010)

and that captures at least 500,000 metric tons of carbon dioxide
during the tax year.

Industrial Facility
An industrial facility is a facility that produces a carbon dioxide
stream from a fuel combustion source, a manufacturing process,
or a fugitive carbon dioxide emission source that, absent capture
and disposal, would otherwise be released into the atmosphere
as industrial emission of greenhouse gas. An industrial facility
does not include a facility that produces carbon dioxide from
carbon dioxide production wells at natural
carbon-dioxide-bearing formations.

Secure Geological Storage

Page

2

Specific Instructions
In order to claim the credit, the amount of carbon dioxide must be
measured at the source of capture and verified either at the point of
disposal in secure geological storage or at the point of injection as
a tertiary injectant in an enhanced oil or natural gas recovery
project. The amount of qualified carbon dioxide is presumed to be
the lesser of the amount measured at capture and the amount
verified at disposal or injection, unless it can be established to the
satisfaction of the IRS that the greater amount is the correct
amount.

Line 1

This includes storage at deep saline formations, oil and gas
reservoirs, and unminable coal seams under such conditions as
the IRS may determine under regulations.

Enter the metric tons of qualified carbon dioxide captured at a
qualified facility, disposed of in secure geological storage, and not
used as a tertiary injectant in a qualified enhanced oil or natural gas
recovery project. Then, multiply the metric tons entered by $20.24.

See Notice 2009-83, 2009-44 I.R.B. 588, for more information
on secure geological storage. Notice 2009-83 is available at
www.irs.gov/irb/2009-44_IRB/ar11.html.

Line 2

Tertiary Injectant
This is an injectant (other than a hydrocarbon injectant that is
recoverable) that is used as part of a tertiary recovery method.
For more details, see section 193(b).

Qualified Enhanced Oil or Natural Gas Recovery Project
A qualified enhanced oil or natural gas recovery project means
any project located in the United States involving the application
of one or more tertiary recovery methods defined in section
193(b)(3) that can reasonably be expected to result in more than
an insignificant increase in the amount of crude oil or natural gas
that will ultimately be recovered and with respect to which the
first injection of liquids, gases, or other matter commences after
1990. The project will not be treated as a qualified enhanced
crude oil or natural gas recovery project unless the operator
submits to the IRS a certification from a petroleum engineer that
the project meets (and continues to meet) these requirements.

United States and U.S. Possessions

Enter the metric tons of qualified carbon dioxide captured at a
qualified facility, used as a tertiary injectant in a qualified enhanced
oil or natural gas recovery project, and disposed of in secure
geological storage. Then, multiply the metric tons entered by
$10.12.
Paperwork Reduction Act Notice. We ask for the information
on this form to carry out the Internal Revenue laws of the United
States. You are required to give us the information. We need it
to ensure that you are complying with these laws and to allow us
to figure and collect the right amount of tax.
You are not required to provide the information requested on
a form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records
relating to a form or its instructions must be retained as long as
their contents may become material in the administration of any
Internal Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.

This includes the seabed and subsoil of those submarine areas
that are adjacent to the territorial waters of the United States (or
a U.S. possession) and over which the United States has
exclusive rights according to international law with respect to the
exploration and exploitation of natural resources.

The time needed to complete and file this form will vary
depending on individual circumstances. The estimated burden
for individual taxpayers filing this form is approved under OMB
control number 1545-0074 and is included in the estimates
shown in the instructions for their individual income tax return.
The estimated burden for all other taxpayers who file this form is
shown below.

Who Can Take the Credit

Recordkeeping

Generally, the credit is allowed to the person that captures and
physically or contractually ensures the disposal of or the use as
a tertiary injectant of the qualified carbon dioxide.

Learning about the law or the form

6 min.

Preparing and sending the form
to the IRS

7 min.

See Notice 2009-83 for the annual report that is required if the
credit is claimed.

If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would
be happy to hear from you. See the instructions for the tax
return with which this form is filed.

1 hr., 54 min.