§48B Qualifying gasification project credit

Summary

Gives a tax credit equal to 20 percent of the money a taxpayer spends in a year on eligible property used in a qualifying gasification project, or 30 percent for credits allocated under subsection (d)(1)(B). Qualified investment means the basis of eligible property put in service that is part of the project, either built by the taxpayer or bought when its first use starts with the taxpayer, and for which depreciation or amortization is allowed. Certain technical rules like those in section 48(a)(4) and parts of section 46 also apply. Qualifying gasification project: a project that uses gasification technology, is done by an eligible entity, and is certified under the program for credit in an amount not to exceed $650,000,000. Gasification technology: a process that converts coal, petroleum residue, biomass, or similar materials into synthesis gas (mainly carbon monoxide and hydrogen). Eligible property: equipment needed for the project’s gasification work. Biomass: agricultural or plant waste, wood or paper mill byproducts (including lignin), and other forestry maintenance products; it does not include paper that is commonly recycled. Carbon capture capability: a plant design that can reasonably accommodate equipment to capture carbon dioxide for use or storage. Coal: anthracite, bituminous, subbituminous, lignite, and peat. Eligible entity: someone applying for a domestic project using gasification for chemicals, fertilizers, glass, steel, petroleum residues, forest products, agriculture (including feedlots and dairy), or transportation-grade liquid fuels. Petroleum residue: the carbonized product from high‑boiling petroleum fractions. The Secretary, with the Energy Secretary, must set up a certification program within 180 days of enactment. Total credits available under the program cannot exceed $350,000,000 plus an extra $250,000,000 for projects that separate and sequester at least 75 percent of their CO2. Certificates may be issued only during the 10-fiscal-year period beginning October 1, 2005. Applicants must show financial viability without extra federal funds, provide information to ensure funds are spent well, show market demand, use identified fuels for at least 90 percent of the fuel needs for specified outputs, have a competent project team, and meet other published criteria. Priority goes to projects that sequester more CO2 and to those with research partnerships with eligible educational institutions. No credit is allowed for investments that already get a credit under section 48A. The Secretary must have rules to recapture credits if a project fails to meet or keep its required separation and sequestration levels.