Enhancing Energy Recovery Act

This bill amends the Internal Revenue Code to modify the carbon oxide sequestration tax credit (Section 45Q) to ensure equal treatment for different uses of captured carbon oxide, including enhanced oil or natural gas recovery and other utilization methods.

Sec. 2, Parity for different uses and utilizations of qualified carbon oxide: The bill revises the credit rules so that qualified carbon oxide used as a tertiary injectant in enhanced oil or natural gas recovery and then stored securely, or utilized in other approved ways, qualifies for the credit on the same basis as carbon oxide simply disposed of in secure geological storage. It removes a separate, lower credit category for certain uses. The credit amount is set at $17 per metric ton for taxable years beginning after 2024 and before 2027, and for later years it is adjusted for inflation using the same method as for the enhanced oil recovery credit, substituting 2025 for 1990. A higher $36 amount applies for carbon oxide disposed of in secure geological storage that is not used for enhanced recovery or other utilization. The bill also makes conforming amendments to related provisions and applies to taxable years beginning after December 31, 2024.