Enhancing Energy Recovery Act

This bill amends the Internal Revenue Code to modify the carbon oxide sequestration tax credit (Section 45Q) to ensure parity for different uses and utilizations of qualified carbon oxide.

Sec. 2, Parity for different uses and utilizations of qualified carbon oxide: The bill revises Section 45Q to treat carbon oxide disposed of in secure geological storage, used as a tertiary injectant in qualified enhanced oil or natural gas recovery projects and then disposed of in secure geological storage, or utilized in a manner described in subsection (f)(5) equally for credit purposes. It sets the applicable dollar amount at $17 for taxable years beginning after 2024 and before 2027, and for years after 2026, $17 adjusted for inflation using the method in section 43(b)(3)(B) substituting 2025 for 1990. For carbon oxide used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project and disposed of in secure geological storage, the dollar amount is $36, also inflation-adjusted. The bill removes the separate provision for carbon oxide not used as a tertiary injectant. Conforming amendments update cross-references in other sections. The changes apply to taxable years beginning after December 31, 2024.