United States

The One Big Beautiful Bill Act, signed into law in early July 2025, contains tax and spending policies that form the core of the Trump administration second term agenda. The Act overturns much of the clean energy framework established under the Inflation Reduction Act.

For carbon management specifically, it modifies the 45Q tax credit to support CO₂ captured for utilisation or enhanced oil recovery (EOR) projects at the same $85 per ton rate as CO₂ captured for geological sequestration. The Act also introduces new restrictions on supply chains. It is expected that the modification of the 45Q tax credit rates to offer identical support for utilisation and EOR projects will spur commercial interest in such projects.

Further information: 45Q under One Big Beautiful Bill Act

The Infrastructure and Investment Jobs Act (IIJA) was passed under the Biden Administration, and initially allocated over $62bn to the US Department of Energy (DOE), including more than $10bn for carbon capture, direct air capture and industrial emissions reduction.

The Biden administration created the Office of Clean Energy Demonstrations (OCED) to administer the funds. The Trump Administration has cancelled numerous awards for carbon capture projects, including cancelling $3.7bn of awards for carbon capture projects in May 2025, and terminated an additional 223 project awards in October 2025, some of which were carbon capture related. In additions a FOA program scheduled under the Biden Administration was cancelled.

While the IIJA remains law until its scheduled expiry on 30 September 2026, considerable IIJA funding remains unspent, with no clear indication of if and when it will be spent.

In November 2025, the Department of Energy announced the abolition of OCED, with no clear successor office.

Further information: Infrastructure Investment and Jobs Act; Unleashing American Energy

The Inflation Reduction Act (IRA) of 2022 allocated $369bn for clean energy in general. Central to the IRA’s support for decarbonisation were a number of strengthened tax credits, including 45Q which provides a tax credit for every ton of CO₂ captured. The IRA increased the value of the tax credit to $85 per ton for capture and sequestration projects and to $60 per ton for capture and utilisation or capture for use in enhanced oil recovery. It also extended the deadline for qualifying carbon capture projects to 2033. These provisions were retained in the One Big Beautiful Bill Act passed under the Trump Administration in 2025.

Further information: Inflation Reduction Act, Leading the way: America boosts industrial carbon capture

The Regional Greenhouse Gas Initiative (RGGI) is a market-based, cap-and-invest regional initiative in the US. Within the RGGI states, fossil-fuel-fired electric power generators with a capacity of 25 megawatts or greater ('regulated sources') are required to hold allowances equal to their CO₂ emissions over a three-year control period. It is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont to cap and reduce power sector CO₂ emissions. 

RGGI consists of separate CO₂ Budget Trading Programs within each state involved.

Further information: RGGI

Formerly known as the Cap-and-Trade Program, Cap-and-Invest is a key element of California’s strategy to reduce GHG emissions. It is an emissions trading-based scheme which requires all large emitters in the state to purchase and surrender sufficient allowances to cover their emissions. It began operation in 2012 and remains active through at least 2045. A rulemaking expected in early 2026 will further clarify how the scheme will operate in future.

Further information: Cap-and-Invest Program