Carbon Tax Credits Need More Fraud Oversight, Activists Say

Environmental groups are urging the Department of Treasury and the Environmental Protection Agency to increase scrutiny on taxpayers claiming carbon capture credits.

Over 100 groups, including Sierra Club and Greenpeace USA, recommended in a letter ways to reduce fraud in the Section 45Q carbon oxide sequestration tax credit. The credit, expanded through the Democrats’ 2022 tax-and-climate law, is most popular among oil and gas companies and controversial among environmentalists who worry it justifies continued fossil fuel use.

Treasury and EPA should implement clawback provisions in cases of fraud, enact more substantive penalties for violations, and disallow subsidizing the same molecule ...