FOR IMMEDIATE RELEASE
July 7, 2025

New Law Raises Value of Tax Credit to Use Captured CO₂, Notching a Win for CO₂ Solutions Coalition

WASHINGTON, D.C. — The CO2 Solutions Coalition, led by the Compressed Gas Association (CGA), is celebrating a major policy victory with the signing of the One Big Beautiful Bill Act by President Donald J. Trump on July 4. The legislation includes a critical update to the Section 45Q tax credit that brings long-overdue parity between carbon dioxide (CO₂) sequestration and CO₂ utilization.

For more than a year, the Coalition has led the charge to ensure that companies that use CO₂ in essential commercial and industrial applications—such as food and beverage production, healthcare, water treatment, and manufacturing—receive equal tax treatment to those who sequester CO₂ underground.

“This is a landmark win for CO₂ users across the U.S. economy,” said Rich Gottwald, President and CEO of the Compressed Gas Association. “CO₂ is vital to countless industries and everyday products, and this legislation finally recognizes the critical role these companies play in keeping supply chains running and products on shelves.”

Under previous law, the Section 45Q tax credit provided a higher tax credit for sequestration projects over utilization, creating an uneven playing field and discouraging investment in CO₂ utilization infrastructure. The updated policy corrects that imbalance, making the credit value the same regardless of whether CO₂ is permanently stored or put to beneficial use. The new law also recognizes enhanced oil recovery (EOR) as a valid use of CO₂, and thus also eligible for the tax credit.

“The CO₂ Solutions Coalition was formed to make sure that industries using CO₂ weren’t left behind,” said Gottwald. “This legislation validates that mission. It ensures continued access to CO₂, supports domestic production, and strengthens U.S. manufacturing and industrial competitiveness.”

The CO₂ Solutions Coalition brings together businesses that rely on a stable, economically viable CO₂ supply to deliver critical goods and services. The group has worked closely with Congress, federal agencies, and industry partners to advocate for practical, pro-growth policy updates.

“Parity in 45Q is more than a policy fix—it’s a signal that Washington understands how essential CO₂ is to the U.S. economy,” added Gottwald.

To learn more about the CO₂ Solutions Coalition, visit www.CO2Solutions.org.

Media Contact:
Paul Pflieger
Director of Marketing, Communications, and Events
Compressed Gas Association
ppflieger@cganet.com