Summary
This guide discusses the management of risks associated with 45Q tax credits in carbon capture, utilization, and storage (CCUS) projects. It outlines the significance of Section 45Q of the Internal Revenue Code, which provides tax credits to incentivize investment in CCUS technologies. The document details the evolution of these credits, including amendments made through the Bipartisan Budget Act and the Inflation Reduction Act, which expanded credit amounts and introduced new monetization mechanisms. It emphasizes the importance of a robust risk management framework for developers and investors, addressing potential challenges such as credit allocation, compliance, and credit recapture. The guide also presents the role of tax insurance in mitigating risks, highlighting various insurance products tailored for CCUS projects, including business interruption and contingent business income insurance. Additionally, it discusses the necessity of manuscripted insurance policies to cover unique project risks, ensuring financial stability and project viability.
