Hidden in the U.S. tax code are two of the most powerful financial incentives for climate action: Section 45Q and Section 45V. Together, they support two emerging technologies critical to decarbonization—carbon capture and storage (CCS) and clean hydrogen.
If you’re building or investing in low-carbon infrastructure, these credits could make or break your project economics. But they’re complex, technical, and require rigorous emissions accounting and third-party verification.
What Are 45Q and 45V?
Section 45Q provides a federal tax credit for capturing and permanently storing CO₂. This applies to industrial facilities, power plants, and even direct air capture systems. The credit increases based on the storage method and is now worth up to $85 per metric ton for geological storage.
Section 45V, introduced through the Inflation Reduction Act, offers a credit for clean hydrogen production based on the carbon intensity of the process. Projects using electrolysis powered by renewable electricity may qualify for the highest rates—up to $3 per kilogram.
These credits are game-changers. But claiming them means getting your carbon math right.
Why Verification and Lifecycle Analysis Matter
Both credits hinge on precise measurement and reporting of emissions reductions. For 45V, that means conducting a Life Cycle Assessment (LCA) that calculates the full cradle-to-gate emissions associated with hydrogen production.
For 45Q, you must demonstrate permanent CO₂ sequestration through geologic storage or approved utilization pathways, and you’ll need monitoring, reporting, and verification (MRV) plans consistent with IRS and EPA requirements.
How ECG Supports 45Q and 45V Projects
At ECG Global Solutions, we help developers, utilities, and manufacturers navigate the entire process:
- Screening projects for eligibility
- Modeling emissions intensity and reduction potential
- Conducting lifecycle analysis for hydrogen
- Preparing verification-ready documentation for IRS compliance
- Engaging qualified third-party verifiers
These credits reward precision. Getting it wrong can mean missed revenue—or worse, a clawback.
The Bottom Line
45Q and 45V represent a major shift in U.S. climate policy: real money for real reductions. But to benefit, companies must be ready to meet the measurement and reporting bar. That’s where technical expertise—and experienced partners—make all the difference.
