Nelson Mullins partner Pete Lowy authored an article for Law360 examining the U.S. Department of the Treasury and the IRS’s expanded temporary relief for taxpayers claiming the Section 45Q carbon capture credit under Notice 2026-50. The notice addresses uncertainty surrounding the EPA’s electronic greenhouse gas reporting system, e-GGRT, which taxpayers have relied upon to substantiate secure geological storage.

Lowy explains how the notice expands a prior safe harbor to qualifying enhanced oil and natural gas recovery projects and allows independent engineers or geologists to certify compliance when e-GGRT is unavailable. The relief also applies to recapture determinations, providing a consistent approach to qualification and recapture analyses involving stored carbon and potential leakage.

While Notice 2026-50 provides a practical bridge for projects navigating the reporting transition, Lowy emphasizes that the relief is temporary and conditional. He highlights the importance of maintaining detailed records and engaging qualified professionals early as Treasury and the EPA work toward a longer-term verification framework.

Subscribers may read the full article here.