8933 Carbon Dioxide Sequestration Credit

Form

8933

Carbon Dioxide Sequestration Credit
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Department of the Treasury
Internal Revenue Service

OMB No. 1545-0123

2017

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.
▶ Go to www.irs.gov/Form8933 for the latest information.

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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$22.48
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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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$11.24
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2c

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3

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

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3

Carbon dioxide sequestration credit from partnerships and S corporations

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General Instructions

How To Figure the Credit

Section references are to the Internal Revenue Code unless
otherwise noted.

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, isn't included in the calculation.

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.

Purpose of Form
Use Form 8933 to claim the section 45Q 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 aren't 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)
aren't required to complete or file this form. Instead, report
this credit directly on line 1x of Form 3800, General Business
Credit.

Inflation Adjustment
For 2017, the $20 and $10 rates are adjusted for inflation.
The 2017 credit rates are:
• $22.48 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
• $11.24 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
Qualified Carbon Dioxide
Qualified carbon dioxide is carbon dioxide captured after
October 3, 2008, from an industrial source that:

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Cat. No. 37748H

Form 8933 (2017)

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Form 8933 (2017)

• 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 doesn't include carbon dioxide that is
recaptured, recycled, or otherwise reinjected 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.

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 doesn't include a facility
that produces carbon dioxide from carbon dioxide production
wells at natural carbon-dioxide-bearing formations.

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.
After 2010 the following apply.
• Secure geological storage requires approval by the U.S.
Environmental Protection Agency (EPA) of a Monitor, Report
and Verify Plan (MRV Plan) submitted by the operator of the
storage facility or tertiary injection project.
• The annual amount of carbon dioxide claimed for the credit
must be reconciled with amounts reported to the EPA under
its Greenhouse Gas Reporting Program, subpart RR.
See the EPA website at www.epa.gov and 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.

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 won't 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 1
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 $22.48.

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 $11.24.
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The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
burden for individual and business taxpayers filing this form
is approved under OMB control number 1545-0074 and
1545-0123 and is included in the estimates shown in the
instructions for their individual and business income tax
return. The estimated burden for all other taxpayers who file
this form is shown below.
Recordkeeping . . . . . . . . . . 1 hr., 54 min.
Learning about the law or the form . . . . . . 6 min.
Preparing and sending the form to the IRS . . . 7 min.
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
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