New tax credit for forest-waste carbon capture—but rules still unwritten.

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.
• Aggregation of multiple facilities to meet the 1,000-metric-ton annual threshold (section (e)(1)(B)) allows a single taxpayer to combine small projects, potentially enabling credit stacking and reducing the per-project scrutiny.
• The bill permits transfer of the credit to third parties (section 6418 amendment), meaning equipment owners can sell the credit to unrelated entities. This creates a secondary market for credits and decouples the credit from the actual carbon-removal operator, increasing fraud risk.
• Recapture rules (section (f)(8)) require the Secretary to write regulations to claw back credits if carbon escapes storage, but the bill does not specify penalties, timelines, or enforcement mechanisms, leaving recapture effectiveness uncertain.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Citizens gain a potential public benefit: wildfire hazard reduction on federal lands and carbon sequestration, both genuine environmental goods. However, the primary direct beneficiary is the private sector (biomass companies, carbon removal operators, equipment manufacturers), and the credit's value depends entirely on regulatory definitions not yet written—sustainability standards and carbon accounting rules that will determine whether the credit actually delivers net climate benefit or become

Who stands to gain

• Biomass equipment manufacturers and suppliers
• Carbon removal and biochar companies
• Forest management contractors performing thinning operations
• Operators of geological storage facilities
• Building material manufacturers using biochar or carbon-infused products

Named in the bill

U.S. Forest Service, Bureau of Land Management, Department of Treasury, Department of Energy, Environmental Protection Agency, Department of Agriculture, Internal Revenue Code Section 45BB (new), Internal Revenue Code Section 45Q (referenced), Internal Revenue Code Section 48C (referenced)

Where it stands

1 cosponsor: 1 Democrats.

• May 21, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• May 21, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

5 lobbying clients named this bill on 6 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $1,462,500 in lobbying spend. A filing names 5 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 78% of bills with at least one filing.

Sheldon Whitehouse, the sponsor, reported $52,000 in PAC receipts in the 2026 cycle.

• Nature Conservancy — $900,000 on 1 filing
• Ceres, Inc. — $230,000 on 1 filing
• Dairy Farmers of America Inc — $190,000 on 1 filing
• Elanco Animal Health — $102,500 on 2 filings
• East Bay Regional Park District — $40,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.