New tax credit for forest-waste carbon capture—but rules still unwritten.
S. 1842 — Wildfire Reduction and Carbon Removal Act of 2025 · Filed by Sheldon Whitehouse (D-RI) · 1 cosponsor · Introduced May 21, 2025 · Referred to committee
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What it does
This bill creates a new federal tax credit for companies and projects that capture carbon dioxide from forest waste (branches, bark, small trees) generated during wildfire-prevention thinning and store it either underground for 1,000 years or in long-lasting products like biochar for 100 years. The credit pays $36 per metric ton for geological storage or $12 per metric ton for product storage, with a 5× multiplier for projects meeting additional wage and apprenticeship standards. The bill requires the Treasury Department to write detailed rules by early 2026 to define which forest residues qualify, how to measure carbon removal accurately, and what sustainability practices must be followed to protect soil, water, and biodiversity.
Why we flagged it
The bill's operative mechanism is a tax credit for private entities capturing and storing carbon from forest residues. The wildfire-mitigation framing is genuine—the bill explicitly ties eligibility to Forest Service hazard-reduction plans—but the primary financial flow is a subsidy to carbon removal and biomass companies, not a direct public expenditure on forest management.
What the text implies
- The credit's actual climate benefit depends entirely on Treasury regulations not yet written. If lifecycle analysis rules are weak or default values are generous, projects with minimal net carbon removal could claim full credits, turning the subsidy into a wealth transfer rather than climate action.
- The 5× multiplier for projects meeting wage/apprenticeship standards (section 45Q(h)(3)) creates a two-tier credit system: $180/ton for compliant projects vs. $36/ton for others. This may concentrate benefits among larger, unionized operators and exclude smaller or rural biomass companies.
The full analysis lists 5 implications of this text.
Who stands to gain
Biomass equipment manufacturers and suppliers; Carbon removal and biochar companies; Forest management contractors performing thinning operations