8933 Carbon Dioxide Sequestration Credit

Form

8933

Carbon Dioxide Sequestration Credit

2013

Attach to your tax return.
To claim this credit, the qualified facility must capture at least 500,000 metric
tons of carbon dioxide during the tax year.
Information about Form 8933 and its instructions is at www.irs.gov/form8933.
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Department of the Treasury
Internal Revenue Service

OMB No. 1545-2132

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Attachment
Sequence No.

165

Identifying number

Name(s) shown on return

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 . . . . . . . . . . .

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$21.25
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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 . . . . . . . . .

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$10.63
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2c

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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 . . . . . . . . . . . . . . . . .

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Carbon dioxide sequestration credit from partnerships and S corporations

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General Instructions
Section references are to the Internal Revenue Code.

Future Developments
For the latest information about developments related to Form 8933 and its
instructions, such as legislation enacted after they were published, go to
www.irs.gov/form8933.

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• $21.25 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
• $10.63 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.

Definitions

Purpose of Form

Qualified Carbon Dioxide

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.

• Would otherwise be released into the atmosphere as industrial emission of
greenhouse gas, and

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.

Qualified carbon dioxide is carbon dioxide captured after October 3, 2008, from an
industrial source that:

• 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 Facility
A qualified facility is any industrial facility that is owned by the taxpayer where
carbon capture equipment is placed in service and that captures at least 500,000
metric tons of carbon dioxide during the tax year.

How To Figure the Credit

Industrial Facility

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.

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.

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.

Inflation Adjustment
For 2013, the $20 and $10 rates are adjusted for inflation.

Secure Geological Storage
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.
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.

The 2013 credit rates are:

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 37748H

Form 8933 (2013)

Page 2

Form 8933 (2013)

Tertiary Injectant

Line 1

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).

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 $21.25.

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
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.

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

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 2
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 $10.63.
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.
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.
Recordkeeping .

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. 1 hr., 54 min.

Learning about the law or the form

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. 6 min.

Preparing and sending the form
to the IRS . . . . . .

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. 7 min.

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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.