Carbon Capture 45Q Storage Fraud Evidence: The Tons Have to Stay Stored

Evidence of carbon capture credit fraud connects storage measurement and verification to the tons claimed under the 45Q tax credit. A capture meter, an injection record and a signed certificate answer different questions about the same carbon. If you work at the plant, along the transport route or on the storage report, you may know where the quantity changed before it reached the tax claim.

This page follows the carbon from capture through storage or use to the certification behind the credit. The broader measurement-to-payment evidence chain applies across energy programs. Here, the decisive questions concern disposition, containment and leakage.

What Counts as Qualifying Stored Tons?

Qualifying stored tons connect measured capture to verified disposal or injection and secure geological storage. The carbon-capture rule requires measurement at the source of capture and verification at the point of disposal, injection or utilization. Gross plant emissions, captured carbon and qualifying stored carbon describe different quantities.

The carbon-capture credit law also sets annual facility thresholds: 1,000 metric tons for direct air capture, 18,750 for the specified electricity-generating facilities with a 75% capture-design condition, and 12,500 for other qualifying facilities. Those thresholds address whether the facility qualifies.

The destination determines the supporting file. Geological storage can include deep saline formations, oil and gas reservoirs, and unminable coal seams. Storage outside enhanced recovery must meet injection requirements and the Environmental Protection Agency’s geologic storage reporting rules, known as Subpart RR. Qualifying enhanced oil or natural gas recovery can use that reporting route or the ISO industry standard for storage through enhanced oil recovery.

The Meter Records Follow the Carbon

Capture and composition records, transported volumes and injected volumes let an insider follow the quantity across the businesses handling it. We examine those records alongside the mass-balance calculation, which accounts for the carbon entering, leaving and remaining within the relevant system. The useful comparison ties the measurements to the facility, destination and period claimed.

That comparison becomes especially important in enhanced recovery, where carbon can circulate through the operation more than once. The rule includes the initial deposit of captured carbon but excludes carbon recaptured, recycled and reinjected as part of that recovery process. A worksheet that treats recycled volume as fresh captured carbon would change the quantity supporting the claim. If you operate the injection system, you may know whether the claim counted a new delivery or carbon already in circulation.

Utilization Has a Different Test

Carbon utilization requires a lifecycle analysis showing carbon permanently isolated from the atmosphere or displaced from being emitted. The analysis considers the product’s lifecycle, including feedstock production, distribution and use. The qualifying quantity cannot exceed the carbon measured at capture.

The rule requires independent preparation or verification of that analysis, with review of the model and supporting data when a third party verifies it. The Department of Energy conducts a technical review, and the Internal Revenue Service decides whether to approve the analysis. Someone who works on the model may know which input changed the claimed emissions reduction. That evidence belongs beside the capture measurement and the resulting credit claim.

Which Carbon Storage Certification Reporting Extension Applies?

The carbon storage certification reporting extension changes when the environmental report is due, while separate IRS notices address proof of storage when the reporting system is unavailable. The Environmental Protection Agency’s extension does not replace the storage measurements, monitoring plan or certification supporting the tax credit.

Notice 2026-1 initially addressed certain storage during calendar year 2025 and based the relief on whether EPA’s electronic reporting system was available by June 10, 2026. It generally excluded use as an injectant in enhanced recovery.

Notice 2026-50, published in the August 31, 2026 bulletin, expanded the framework to qualifying storage from January 1, 2025, including specified enhanced-recovery storage. It changed the condition to whether EPA had launched its electronic reporting system for the reporting year by March 31 of the following year. The alternative applies when the system has not launched by that date. A browser error on an employee’s computer cannot answer that system-status question.

The Environmental Protection Agency’s October 14, 2026 interim final rule then moved the Greenhouse Gas Reporting Program deadline for reporting year 2025 from October 30, 2026 to March 10, 2027, effective immediately. EPA expressly limited the change to that annual reporting deadline. The rule also said EPA could not have the electronic reporting tool prepared in time for the older deadline.

The revised IRS notice retains an EPA-approved monitoring, reporting and verification plan applicable to the storage dates, the referenced Subpart RR requirements as of December 31, 2025, and mass-balance and containment reporting. It also retains independent certification and documentation obtained by the relevant timely tax filing. We would like to see a calendar hold carbon underground.

What Must the Storage Certification File Show?

The storage certification file must support the quantity claimed and the applicable method of proving secure storage. The monitoring, reporting and verification plan, usually called the MRV plan, connects the storage operation to the measurements and reporting it requires. Under the conditional IRS notice, its approval must cover the storage dates at issue.

The certification requirements depend on the route. Under the 2021 final rule, a qualifying enhanced-recovery taxpayer reporting volumes to EPA under Subpart RR may self-certify the claimed volume. Under the ISO route, the taxpayer can prepare documentation internally, but must provide it to a qualified independent engineer or geologist for certification. Calling a file certified leaves the essential question unanswered: certified under which route, and on which evidence?

For the ISO route, that engineer or geologist certifies the accuracy and completeness of the mass-balance calculations and the monitoring and containment information. The annual certification carries an independence affidavit and is made under penalties of perjury.

The revised IRS reporting relief likewise requires an independent engineer or geologist, a certification under penalties of perjury and an independence affidavit. The person signing, the relationship to the taxpayer and the underlying calculations each deserve attention. We connect the signed conclusion to the version of the calculation the certifier actually reviewed. If you saw a different quantity in the operating records, that difference gives us a concrete place to begin.

Form 8933 Connects the Parties and the Tons

Form 8933 connects the carbon-handling arrangements to the tax claim. The final rule requires annual reporting of the contracts and parties, including signed forms from the relevant contracting parties. The reported information includes the tons each party disposes of, injects or utilizes on the taxpayer’s behalf.

For storage and enhanced recovery, the contract reporting also identifies the operator, field, unit, reservoir, county and state, and the facility’s EPA reporting identifier. Those details let us connect the tax-support file to the actual storage site. A transport record, a reservoir report and the claimant’s form become useful together when they refer to the same carbon and the same operation.

The company claiming the credit can arrange for another business to carry out disposal, injection or utilization through a binding written contract. That makes the contractor’s evidence part of the inquiry, even when the tax department works elsewhere. The contract, the operator’s measurements and the signed tax forms show different parts of how the claimed quantity reached the return.

Leakage Changes the Quantity Behind the Credit

Leakage changes the storage calculation and can require repayment of credits previously claimed. The final rule requires quantification when the taxpayer, storage operator or regulator determines that stored carbon has leaked to the atmosphere. Under the ISO route, a qualified independent engineer or geologist must certify that quantity using sound engineering principles.

The rule compares leaked carbon with the amount securely stored in the same tax year. Leakage can reduce the year’s qualifying quantity or reach credits from earlier years through recapture. When leakage exceeds current-year storage, the 2021 rule reaches back as far as the third preceding year, starting with the most recent year’s credits. The IRS reporting relief expressly includes stored and leaked quantities in its conditional framework. The later environmental reporting date does not supply a different physical quantity.

The storage contract also matters after a leak. The rule requires the disposing party to inform the capturing party promptly of information relevant to recapture, including the leak’s location and amount. For someone who saw the operator’s notice, the question is what happened to that information in the calculation and the tax-support file. We follow the notice through to the claim it affected.

Does a Credit Registration Number Verify the Stored Tons?

A credit registration number does not verify the stored tons or establish eligibility for the credit. The transfer-registration rule keeps registration separate from the facts that support entitlement. For carbon storage, the important evidence remains the qualifying activity, the quantities and the supporting certifications.

A transferred credit also has its own required transaction documents. The signed transfer statement identifies the credit and property, the cash price and payment dates. Supporting documents address the property’s existence and the qualifying costs or production behind the credit.

For someone working on a credit transfer, we examine which storage file supplied the quantity offered to the buyer and which quantity reached the tax claim. The difference between a grant, a tax refund and a credit sale determines which financial event those documents support. The buyer’s payment is a private purchase of a tax credit. A federal grant draw is a separate request for government money.

Carbon Research Funding Has Its Own Payment Trail

The Two Elk case shows why identifying the payment matters as much as identifying the carbon project. According to the Justice Department’s announcement, DOE’s National Energy Technology Laboratory awarded approximately $14 million for carbon-sequestration research at Two Elk in Campbell County, Wyoming. The Justice Department described about $7 million claimed under the cooperative agreement and alleged that research funds went to personal uses. DOE’s Office of Inspector General participated in the investigation.

North American Power Group and an individual agreed to a $14.4 million civil False Claims Act settlement, against about $5.7 million DOE had reimbursed. The project work and reimbursement records concern money paid for research. A storage calculation supporting a tax credit answers a different question.

Tax claims follow a different whistleblower route from other government payments. We work out that route with you, connecting what you know to the whistleblower route that fits the actual payment. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The storage tax claim, a DOE reimbursement request and a private offset sale each have their own supporting file. We start with the representation your records support and follow it to the money.

Tell Us Where the Storage Number Changed

If you know the capture measurements, storage calculation or certification behind a questionable credit, speak with our whistleblower experts about the number that reached the claim. We work with you to connect the physical evidence to the decisions inside the business and bring in tax fraud whistleblower lawyers who understand energy-credit cases. We stay beside you through the process, with the storage file and the claim at the center of the case.