Tax Credits Drive Carbon Capture Deployment in US EIA Annual Energy Outlook - CleanTechnica

The U.S. Energy Information Administration’s Annual Energy Outlook 2025 (AEO2025) introduces a new Carbon Capture, Allocation, Transportation, and Sequestration (CCATS) module to model carbon capture deployment through the coming decades. The report projects that CO2 capture at electric power and industrial facilities will increase through the 2030s, primarily driven by enhanced tax credits established under the 2022 Inflation Reduction Act (IRA). These tax credits, which can be claimed for projects beginning construction before 2033 and last for up to 12 years after service, significantly incentivize carbon capture, with projected peak capture rates reaching between 1.5% and 3.5% of energy emissions in the late 2030s. However, CO2 capture is expected to decline after these credits expire by mid-century. The AEO2025 scenarios show variation in peak CO2 capture amounts, ranging from about 56 million metric tons (MMmt) in the Alternative Electricity case