§48B Qualifying Gasification Project Credit

Summary

Gives a tax credit equal to 20% of the money spent on certain gasification projects, or 30% if the project gets a special allocation for strong carbon capture. The credit applies to the cost of eligible equipment put into service that year if the taxpayer built it or bought it as the first user and can take depreciation on it. Key terms (one line each): qualifying gasification project — a project that uses gasification technology, is done by an eligible entity, and has part of its investment certified for credit (certified amount not to exceed $650,000,000); gasification technology — a process that turns coal, petroleum residue, biomass, or other recovered materials into synthesis gas (mainly carbon monoxide and hydrogen); eligible property — parts needed for the gasification process; biomass — agricultural or plant waste, wood/paper mill byproducts (including lignin), and forestry maintenance products, but not commonly recycled paper; carbon capture capability — a plant design able to accommodate equipment to capture CO2; coal — anthracite, bituminous, subbituminous, lignite, and peat; eligible entity — someone applying for a domestic project in fields like chemicals, fertilizers, glass, steel, petroleum residues, forest products, agriculture (including feedlots and dairies), or transportation fuels; petroleum residue — the carbonized product from heavy petroleum fractions. The Secretary of the Treasury, with the Energy Secretary, must set up a certification program within 180 days. The program can allocate up to $350,000,000 in credits plus $250,000,000 more for projects that capture and sequester at least 75% of their CO2. Certificates may be issued only during the 10 fiscal years starting October 1, 2005. Applicants must prove financial viability without extra federal money, show plans and market demand, use the identified fuels for at least 90% of project fuel needs, have a competent team, and meet other published rules. Priority goes to projects with higher CO2 capture and to those with research partnerships with eligible schools. No credit if the same investment already got a section 48A credit, and the Secretary must recapture credits if a project fails to meet the required CO2 separation/sequestration.