Tax incentives increasing for carbon pipelines headed for Siouxland
SIOUX CITY (KTIV) - The Inflation Reduction Act signed by President Joe Biden Tuesday will have a practical impact on your tax dollars here in Siouxland.
The bill increases the amount of federal money available to companies that build carbon pipelines. It’s pretty simple: Any company who builds a carbon pipeline will receive more of a tax incentive now that the legislation is signed.
Think of it this way: For every ton of gas that runs through the line, the company will receive $85 if the carbon ends up buried in the ground. Previously, the company would receive just $50.
This is significant because two companies are currently planning to build carbon pipelines right here in Siouxland. The companies say these pipelines are good for the environment, because they capture carbon from ethanol plants and sequester it into the ground, instead of releasing it into the atmosphere.
While they’ll receive more federal funds now, one company told us the tax rebate will allow an expansion of the industry.
“Because the industry has developed to have valuable marketplaces for dried distillers grains, or the corn oil and what that has done for the biodiesel and the renewable diesel sector. CO2 has the opportunity to be just the same way,” said Elizabeth Burns-Thompson, the VP of Government and Public Affairs for Heartland-Greenway.
But not everyone is on board with the tax incentive. The Sierra Club, which is coordinating opposition across Iowa, says this tax incentive basically results in the federal government paying for the pipelines.
“And so I think that’s why these companies are very excited about this. They’re going to make even more taxpayer dollars. And these tax credits alone are enough to cover their entire upfront infrastructure cost,” said Jess Mazour, a program coordinator with the Sierra Club of Iowa.
The tax incentive for a pipeline company that wants to use carbon to pump oil instead of just burying it was also increased.
“There are very few things that enjoy bipartisan support in Washington DC anymore. First increased during the Trump Administration and expanded in the Biden Administration, the 45Q tax credit is one of the few exceptions and is a clear reflection that carbon capture and storage is critical to drive meaningful economic growth and help achieve significant reductions in greenhouse gas emissions,” said Summit Carbon Solutions, another pipeline company, in a statement.
But when will these pipelines be built? Most likely, they’re at least a year away from that. And landowners still have a chance to make their voice heard in front of the Iowa Utility Board, which will make the final decision on whether the pipelines can be built.
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