Form 8933 Carbon Dioxide Sequestration Credit

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Form

8933

OMB No. 1545-0123

Carbon Oxide Sequestration Credit
▶

Department of the Treasury
Internal Revenue Service

▶ Go

2019

Attach to your tax return.

Attachment
Sequence No.
Identifying number

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

Name(s) shown on return

165

DRAFT AS OF
August 15, 2019
DO NOT FILE
Qualified carbon oxide captured using carbon capture equipment originally placed in service
at a qualified facility before February 9, 2018, disposed of in secure geological storage and not
used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project, nor
utilized in a way described in section 45Q(f)(5).

1a Metric tons captured and disposed of
b Inflation-adjusted credit rate . . . .
c Multiply line 1a by line 1b . . . . .

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1c

Qualified carbon oxide captured using carbon capture equipment originally placed in service
at a qualified facility before February 9, 2018, disposed of in secure geological storage and
used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project, or
utilized in a way described in section 45Q(f)(5).

2a Metric tons captured and used .
b Inflation-adjusted credit rate . .
c Multiply line 2a by line 2b . . .

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2c

Qualified carbon oxide captured using carbon capture equipment originally placed in service
at a qualified facility on or after February 9, 2018, during the 12-year period beginning on the
date the equipment was originally placed in service, disposed of in secure geological storage,
and not used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project,
nor utilized as described in section 45Q(f)(5).

3a Metric tons captured and disposed of . . . . . . . .
b Section 45Q(a)(3) applicable dollar amount (see instructions) .
c Multiply line 3a by line 3b . . . . . . . . . . . . .

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3c

Qualified carbon oxide captured using carbon capture equipment originally placed in service
at a qualified facility on or after February 9, 2018, during the 12-year period beginning on the
date the equipment was originally placed in service, disposed of in secure geological storage,
and used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project, or
used as described in section 45Q(f)(5).
4a Metric tons captured and disposed of . . . . . . . .
b Section 45Q(a)(4) applicable dollar amount (see instructions) .
c Multiply line 4a by line 4b . . . . . . . . . . . . .

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4c

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8

5

Section 45Q(b)(3) election. Check the box if you’re making the election under section 45Q(b)(3)

6

Section 45Q(f)(6) election. Check the box if you’re making the election under section 45Q(f)(6)

7

Reserved for future use

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8

Carbon oxide sequestration credit from partnerships and S corporations .

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9

Add lines 1c, 2c, 3c, 4c, and 8. 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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9

General Instructions

Purpose of Form

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

Use Form 8933 to claim the section 45Q carbon oxide
sequestration 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

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.
For Paperwork Reduction Act Notice, see instructions.

Cat. No. 37748H

Form 8933 (2019)

Page 2

Form 8933 (2019)

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.

The section 45Q(b)(1) applicable dollar amounts for lines 3b and
4b are established by linear interpolation between $22.66 and
$50, and $12.83 and $35, respectively. The applicable dollar
amounts are credit rates and as follows.
• Line 3b: $28.74 per metric ton.

DRAFT AS OF
August 15, 2019
DO NOT FILE

How To Figure the Credit

Section 45Q(a)(1) allows a credit of $20 per metric ton of
qualified carbon oxide captured by the taxpayer
using carbon capture equipment which is originally placed in
service at a qualified facility before the date of the
enactment of the Bipartisan Budget Act (DOE), disposed of by
the taxpayer in secure geological storage, and not used by the
taxpayer as a tertiary injectant in a qualified enhanced oil or
natural gas recovery project.
Section 45Q(a)(2) allows a credit of $10 per metric ton of
qualified carbon oxide (1) captured by the taxpayer using
carbon capture equipment which is originally placed in service
at a qualified facility before DOE, and (2) either (a) used by the
taxpayer as a tertiary injectant in a qualified enhanced oil or
natural gas recovery project and disposed of by the taxpayer in
secure geological storage, or (b) utilized by the taxpayer in a
manner described in section 45Q(f)(5).
Section 45Q(a)(3) allows a credit of the applicable dollar
amount (as determined under section 45Q(b)(1)) per metric ton
of qualified carbon oxide (1) captured by the taxpayer using
carbon capture equipment which is originally placed in service
at a qualified facility on or after DOE during the 12-year period
beginning on the date the equipment was originally placed in
service, (2) disposed of by the taxpayer in secure geological
storage, and (3) neither used as a tertiary injectant in a qualified
enhanced oil or natural gas recovery project nor utilized in a
manner described in section 45Q(f)(5).
Section 45Q(a)(4) allows a credit of the applicable dollar
amount (as determined under section 45Q(b)(1)) per metric ton
of qualified carbon oxide (1) captured by the taxpayer using
carbon capture equipment which is originally placed in service
at a qualified facility on or after DOE, during the 12-year period
beginning on the date the equipment was originally placed in
service, and (2) either (a) used by the taxpayer as a tertiary
injectant in a qualified enhanced oil or natural gas recovery
project and disposed of by the taxpayer in secure geological
storage, or (b) utilized in a manner described in section 45Q(f)(5).
For purposes of determining the credit, a taxpayer may elect
under section 45Q(b)(3) to have the dollar amounts applicable
under section 45Q(a)(1) or (2) apply in lieu of the dollar amounts
applicable under section 45Q(a)(3) or (4) for each metric ton of
qualified carbon oxide which is captured by the taxpayer using
carbon capture equipment which is originally placed in service
at a qualified facility on or after DOE.
For the purpose of calculating the credit, a metric ton of
carbon oxide includes only the contained weight of the carbon
oxide. The weight of any other substances, such as water or
impurities, isn’t included in the calculation.
2019 credit rates and applicable dollar amounts. The credit
rates for lines 1b and 2b are increased by the adjustment for
inflation. The rates are as follows.
• Line 1b: $23.40 per metric ton.
• Line 2b: $11.70 per metric ton.

• Line 4b: $17.76 per metric ton.
See Notice 2019-31, available at https://www.irs.gov/
irb/2019-20_IRB and Notice 2018-93, available at https://
www.irs.gov/irb/2018-51_IRB#NOT-2018-93.
Amount captured by additional carbon capture equipment
on existing qualified facility. For a qualified facility placed in
service before DOE, for which additional carbon capture
equipment is placed in service on or after DOE, the amount of
qualified carbon oxide which is captured by the taxpayer is the
following.
• For purposes of lines 1 and 2, equal to the lesser of (a) the
total amount of qualified carbon oxide captured at such facility
for the tax year, or (b) the total amount of the carbon dioxide
capture capacity of the carbon capture equipment in service at
such facility on the day before DOE.
• For purposes of lines 3 and 4, an amount (not less than zero)
equal to the excess of (a) the total amount of qualified carbon oxide
captured at such facility for the tax year, over (b) the total amount
of the carbon dioxide capture capacity of the carbon capture
equipment in service at such facility on the day before DOE.

Definitions

Qualified Carbon Oxide

This is (a) any carbon dioxide captured from an industrial source
by carbon capture equipment originally placed in service before
DOE, which would otherwise be released into the atmosphere
as industrial emission of greenhouse gas or lead to such
release, and is measured at the source of capture and verified at
the point of disposal, injection, or use; (b) any carbon dioxide or
other carbon oxide which is captured from an industrial source
by carbon capture equipment originally placed in service on or
after DOE, which would otherwise be released into the
atmosphere as industrial emission of greenhouse gas or lead to
such release, and is measured at the source of capture and
verified at the point of disposal, injection, or use; or (c) in the
case of a direct air capture facility, any carbon dioxide which is
captured directly from the ambient air, and is measured at the
source of capture and verified at the point of disposal, injection,
or use.
Qualified carbon oxide also includes the initial deposit of
captured carbon oxide used as a tertiary injectant. It doesn’t
include carbon oxide that’s recaptured, recycled, and
re-injected as part of the enhanced oil and natural gas recovery
process.

Qualified Facility
This is any industrial facility or direct air capture facility (a) the
construction of which begins before January 1, 2024, and the
construction of carbon capture equipment begins before that
date, or the original planning and design for the facility includes
installation of carbon capture equipment; and (b) which
captures:
1. In a facility which emits not more than 500,000 metric tons
of carbon oxide into the atmosphere during the tax year, not
less than 25,000 metric tons of qualified carbon oxide during the
tax year which is used as described under section 45Q(f)(5); or
2. In an electricity generating facility which isn’t described in
(1), not less than 500,000 metric tons of qualified carbon oxide
during the tax year, or that captures at least 500,000 metric tons
of carbon oxide during the tax year; or
3. In a direct air capture facility or any facility not described in
(1) or (2), not less than 100,000 metric tons of qualified carbon
oxide during the tax year.

Page 3

Form 8933 (2019)

Secure Geological Storage

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).

In the case of qualified carbon oxide captured using carbon
capture equipment which is originally placed in service at a
qualified facility before DOE, if you’re the person that captures
and physically or contractually ensures the disposal, utilization,
or use as a tertiary injectant of this qualified carbon oxide, the
credit is attributable to you unless you elect to allow the credit
to the person that disposes of the qualified carbon oxide,
utilizes the qualified carbon oxide, or uses the qualified carbon
oxide as a tertiary injectant. If you make this election, the credit
won’t be allowed to you.
The credit is attributable to you in the case of qualified
carbon oxide captured using carbon capture equipment that is
originally placed in service at a qualified facility on or after DOE,
if you’re the person that owns the carbon capture equipment
and physically or contractually ensures the disposal, utilization,
or use as a tertiary injectant of this qualified carbon oxide. For
purposes of section 45Q, for any tax year in which such facility
is an applicable facility (a facility placed in service before DOE
and for which no taxpayer claimed a section 45Q credit for any
tax year ending before DOE) that captures not less than 500,000
metric tons of qualified carbon oxide during the tax year, you
can elect to have the facility, and any carbon capture equipment
placed in service at the facility, treated as if it was placed in
service on DOE.

Qualified Enhanced Oil or Natural Gas Recovery
Project

Application of Section 45Q for Certain Carbon
Capture Equipment

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 begins after
1990.

In the case of any carbon capture equipment placed in service
before DOE, the credit will apply to qualified carbon oxide
captured using such equipment before the end of the calendar
year in which the Secretary, in consultation with the
Administrator of the EPA, certifies that, during the period
beginning after October 3, 2008, a total of 75 million metric tons
of qualified carbon oxide have been taken into account in
accordance with section 45Q(a), as in effect on the day before
DOE, and section 45Q(a)(1) and (2).

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.

DRAFT AS OF
August 15, 2019
DO NOT FILE

After 2010, the following apply.
• Secure geological storage requires approval by the U.S.
Environmental Protection Agency (EPA) of a Monitoring,
Reporting, and Verification Plan (MRV Plan) submitted by the
operator of the storage facility or tertiary injection project.
• The annual amount of carbon oxide claimed for the credit
must be consistent 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

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 for the
exploration and exploitation of natural resources.

Who Can Claim the Credit and Elections
You can elect to have the credit rates applicable to line 1b or 2b
apply instead of the applicable dollar amounts applicable to
lines 3b and 4b for each metric ton of qualified carbon oxide
that is captured by you using carbon capture equipment which
is originally placed in service at a qualified facility on or after
DOE.

Regulations and other guidance will be issued for this
credit, including guidance on making elections, to
ensure proper allocation for qualified carbon oxide
CAUTION captured by a taxpayer during the tax year ending
after DOE, and to determine whether a facility satisfies the
requirements under section 45Q(d)(1) during such tax year.

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▲

Recapture
Regulations will provide for recapturing the benefit of any credit
allowable under section 45Q for any qualified carbon oxide which
ceases to be captured, disposed of, or used as a tertiary injectant
in a manner consistent with the requirements of section 45Q.
To claim the credit, the amount of carbon oxide 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 oxide 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.

Form 8933 (2019)

Page 4

Specific Instructions
Line 1b.
Enter $23.40 on line 1b.
Line 2b.
Enter $11.70 on line 2b.
Line 3b.
Enter $28.74 on line 3b.
Line 4b.
Enter $17.76 on line 4b.
Line 7.
Line is reserved for future use.

DRAFT AS OF
August 15, 2019
DO NOT FILE

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