Wildfire Reduction and Carbon Removal Act of 2025
Sponsored By: Senator Whitehouse, Sheldon [D-RI]
Introduced
Summary
Tax credit for forest residue carbon removal and storage. The bill creates a per‑metric‑ton tax credit for net CO2e removed from qualified forest residues and stored domestically, and ties payments to clear sustainability, lifecycle, and monitoring rules.
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- Project owners and developers can claim a per‑ton credit of $36 for CO2e put into secure geological storage or $12 for CO2e stored via long‑duration utilization. Credits are normally claimed by the owner of the biomass equipment but may be assigned under an election.
- Forest managers and landowners face new definitions and standards for eligible feedstock. Qualified forest residue must come from thinning trees no greater than 8 inches diameter or other specified residues and projects must store at least 1,000 metric tons in a taxable year, with aggregation allowed across facilities.
- The bill imposes strict measurement, reporting, and verification and lifecycle analysis rules and defines secure storage durations: geological storage must keep CO2e for 1,000 years and long‑duration utilization must demonstrate roughly 100 years of retention. It bars credits for CO2 used as a tertiary injectant in enhanced oil or natural gas recovery and limits overlap with other federal energy and carbon credits.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
New forest carbon removal credit
If enacted, this bill would create a tax credit for CO2 removed from qualified forest residues. You would get $36 per metric ton for CO2 stored in secure geological storage and $12 per ton for CO2 stored in long-lasting products. After 2026 those base amounts would be adjusted for inflation. The dollar amount could be multiplied by 5 for CO2 that meets stricter requirements. A project must store at least 1,000 metric tons in a taxable year to claim the credit. The credit would apply to tax years beginning after Dec. 31, 2025. No credit would be allowed for CO2 used as a tertiary injectant in enhanced oil or gas recovery. For projects already in service before enactment, only the extra capture above pre-enactment capacity would be creditable.
Who can claim and monetize credit
If enacted, the credit would normally go to the owner of the biomass equipment who ensures capture and storage. That owner could elect to let the person who stores or disposes of the CO2 claim the credit instead. Taxpayers would also be able to elect direct payment from the Treasury or transfer the credit under existing transfer rules. These options would apply for taxable years beginning after Dec. 31, 2025.
Rules for eligibility and monitoring
If enacted, Treasury (with DOE and EPA) would write rules that say what counts as qualified forest residue and qualified CO2e. Draft rules must be published within 6 months and guidance issued by January 1, 2026. There must be at least 60 days of public comment and final rules within 90 days after that. Rules must require lifecycle analysis, traceability, independent verification, and ongoing monitoring. Treasury must set standards so geological storage aims to hold CO2 for 1,000 years and long-duration products for at least 100 years. The rules would also include recapture requirements if stored CO2 no longer meets standards.
Sponsors & CoSponsors
Sponsor
Whitehouse, Sheldon [D-RI]
RI • D
Cosponsors
Sen. Schiff, Adam B. [D-CA]
CA • D
Sponsored 5/21/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov