The federal government wants companies to capture carbon dioxide before it reaches the atmosphere and store it permanently underground. To make the economics work, Congress created Section 45Q, a tax credit that pays companies for every metric ton of CO2 they sequester. For CO2 stored in dedicated geological formations, that credit currently runs at $85 per metric ton. For larger operations, it can be the difference between a project that works financially and one that doesn't.
The IRS doesn't take operators at their word on how much CO2 was actually stored. To claim the credit, companies must prove it using a specific, government-approved measurement and reporting system. For Class VI underground injection well operators, that system is Subpart RR of EPA's Greenhouse Gas Reporting Program. Subpart RR dictates exactly how to measure injection volumes, monitor for leakage, verify the data, and report annually to EPA. It is not one option among several. It is the only authorized pathway for this category of storage operation.
If a company cannot file under Subpart RR, it cannot claim the 45Q credit. There is no alternative.
EPA has proposed repealing the Greenhouse Gas Reporting Program. The stated purpose is deregulation and reducing compliance burden on industry. The consequence for CCS operators is that their only reporting pathway for 45Q credit qualification would disappear without a replacement.
The IRS acknowledged the problem and issued a temporary fix through Notice 2026-1. For the 2025 tax year only, operators can still follow Subpart RR's requirements and have an independent, credentialed engineer or geologist certify the results through an affidavit, even if EPA's reporting system is offline. If EPA has not reopened its electronic reporting tool by June 10, 2026, that bridge applies for 2025 claims.
It covers one year. It does not cover what comes after.
The International Organization for Standardization has released the updated version of its geological carbon storage standard this week. The previous version, ISO 27914:2017, was technically insufficient to serve as a substitute for Subpart RR. It lacked the quantification methodology and the monitoring, reporting, and verification requirements that federal credit compliance demands.
The 2026 version addresses those gaps directly. It adds a methodology for calculating the net mass of CO2 stored using a mass balance approach, quantification and verification requirements, and site characterization and monitoring protocols detailed enough to run alongside Subpart RR on the substantive questions. Analysts who have reviewed both documents note that the new standard reads much like a combination of the Class VI underground injection control regulations and Subpart RR itself.
The parallels are close enough to be functional. Both frameworks require delineation of the storage unit and area of review, characterization of the CO2 stream being injected, and a calculation where stored quantity equals mass input minus documented losses. The 2026 standard fills the gap the 2017 version left open.
In the United States, ISO 27914:2026 must first go through review and approval by the American National Standards Institute. Treasury and the IRS would then need to formally adopt it through guidance or rulemaking. There is precedent for this path. ISO 27916:2019, which covers CO2 storage associated with enhanced oil recovery operations, was accepted by Treasury as an authorized reporting alternative after ANSI approval, with a third-party certification requirement attached. A similar process would likely apply to ISO 27914:2026 if Treasury moves in that direction.
None of those steps have happened yet. The standard is new, the ANSI process takes time, and Treasury has not signaled a timeline.
For CCS project operators, the practical read is this: two things need to be monitored in parallel. First, whether EPA formally advances the Subpart RR repeal and on what schedule. Second, whether Treasury provides a post-2025 reporting pathway before the Notice 2026-1 safe harbor expires. ISO 27914:2026 is the most viable candidate for that pathway, but it is not there yet.
Companies with Class VI storage operations and 45Q credits on their books should be in active conversations with legal and tax advisors now. Waiting for the guidance to land before starting that conversation is the wrong sequence.
