S-1842 — Wildfire Reduction and Carbon Removal Act of 2025

YourVoice.Now Summary

Corporate BenefitsWorkers & JobsEnvironmentTransparency & Accountability

Pays companies $36 a ton to bury carbon from small trees cleared out of fire-prone forests.

Corporate Benefits

New carbon storage tax credit — $36 or $12 per ton

A new Section 45BB would pay $36 for each ton of carbon dioxide stored deep underground. Carbon stored in biochar or lasting building materials would earn $12 a ton. Both amounts would rise with inflation after 2026.

Five times bigger credit — up to $180 per ton

Projects that pay local wage rates and hire registered apprentices would earn five times the base rate. That is $180 a ton for underground storage and $60 a ton for storage in products.

Credit usable without a tax bill — sell it or take cash

A company could sell the credit to another taxpayer for cash. Nonprofits and government bodies could take it as a cash payment instead.

Double-dipping blocked — cannot combine with other energy tax credits

A project could not claim this credit and the Section 45Q or 48C credit in the same year. Power or fuel it makes could not earn other clean-energy credits unless the project uses it.

Credit limited at existing projects — only new equipment counts

Older projects could only count carbon captured above what their old gear could handle. This aims the credit at new equipment.

Workers & Jobs

Wage rules for project workers — required for the bigger credit

To earn the five-times-larger credit, a project would have to pay the local going wage rates set for that kind of work. The rule is borrowed from the existing Section 45Q carbon credit.

Apprentice hiring required — projects must use registered apprentices

The bigger credit also requires projects to hire apprentices for part of the work. That opens paid training slots on the job.

Environment

Carbon storage from forest waste — paid per ton removed

The credit only pays for carbon that is measured and verified at the point it is stored or used. Payment is by the ton, so bigger removals earn more.

Small-tree removal in fire-risk areas — trees 8 inches or less

Only wood from thinning trees 8 inches or less across counts, plus limbs and bark. It must come from wildfire hazard work or restoration named in a federal land plan or in a high-risk fireshed.

Soil, water, wildlife, and food rules — required before credits flow

Treasury would write these standards with the farm and land agencies. They must limit harm to soil, water, and wildlife. They must also limit crowding out food growing.

Storage must hold 1,000 years — or 100 years in products

Underground storage counts only if it can hold the carbon safely for at least 1,000 years. Storage in biochar or building materials counts at 100 years.

Whole-process emissions counted — hauling and land change included

The carbon total must subtract emissions from growing, hauling, processing, and disposing of the wood. It must also count land-use change and carbon that leaks out over 100 years.

Using captured carbon to pump oil — barred from the credit

No credit would be allowed if the captured carbon is injected to squeeze more oil or gas from a well. That use is allowed under some other carbon credits.

Transparency & Accountability

Public comment on the rules — at least 60 days

Treasury would have to publish draft rules within 6 months and take comments for at least 60 days. Final rules would follow within 90 days after comments close.

Rules revisited every 5 years — with new public comment

Every 5 years Treasury would ask the public again if the rules need updating. Any change would go through the same steps.

Independent checkers verify carbon claims — outside firms, not the company

Outside third parties would have to check the carbon totals a project claims. Projects would also be watched for a period Treasury sets after the carbon is stored.

Wood must be traced — proving it came from qualifying forests

Rules would have to track the source and share of qualifying wood in each project. That is meant to stop wood from other places being counted.

Credit taken back if carbon escapes — Treasury must reclaim it

If stored carbon stops being held the way the law requires, Treasury must take back the credit already given. Treasury would write the rules for doing that.

More about this bill

Companies that clear small trees and brush from fire-prone forests would earn a new federal tax credit. They would be paid $36 for each ton of carbon dioxide they bury deep underground. Wood turned into biochar or lasting building materials would earn $12 a ton. Both amounts would rise with inflation after 2026. Projects that pay local wage rates and hire registered apprentices would earn five times those amounts. That is up to $180 a ton. The credit would start with tax years that begin after December 31, 2025. Only certain wood counts. It must come from thinning trees 8 inches or less across, plus limbs and bark. It must also come from wildfire hazard work or forest restoration in high-risk areas. No credit would be allowed if the captured carbon is used to pump more oil or gas. Firms could sell the credit to another company. Governments and nonprofits could take cash instead. A project could not claim this credit and other energy credits in the same year. Before the credit could be claimed, the Treasury Department would have to write rules. Those rules would set limits to protect soil, water, wildlife, and food growing. They would also set how carbon removal is measured and checked. Storage underground would have to hold the carbon for 1,000 years. Storage in products would have to hold it for 100 years. Independent outside verifiers would check each project's claims. The wood would have to be traced back to its source. If stored carbon later escapes, Treasury would take the credit back. The public would get at least 60 days to comment on each set of rules. Treasury would revisit the rules every 5 years. Most people would see no direct change in what they pay or receive.

Congressional Summary

Wildfire Reduction and Carbon Removal Act of 2025This bill establishes a new federal business tax credit for forest residue biomass carbon removal and storage.Specifically, the bill allows a tax credit for qualified carbon dioxide equivalent that is (1) captured from qualified forest residue biomass using biomass equipment placed in service at a qualified forest residue biomass carbon removal and storage project on or after the date the bill is enacted, and (2) stored in secure geological storage or via long-duration utilization. Qualified forest residue biomass is forest residue from the thinning of certain trees, limbs, and bark and produced from certain wildfire hazard reduction or ecological restoration activities. Sustainability standards apply.The tax credit amount is (1) $36 (adjusted for inflation) per metric ton of qualified carbon dioxide equivalent stored in secure geological storage, and (2) $12 (adjusted for inflation) per metric ton of qualified carbon dioxide equivalent stored via long-duration utilization. The tax credit is increased if certain wage and apprenticeship requirements are met.The bill limits the tax credit for existing removal and storage projects to the qualified captured carbon dioxide that generally is attributable to additional biomass equipment placed into service after the bill is enacted.The tax credit may be transferred to an unrelated third party, and certain tax-exempt and government entities may receive the tax credit as a payment.Finally, the bill requires the Internal Revenue Service to establish sustainability standards for the identification of qualified forest residue biomass and issue other regulations.

Details

Congress: 119th
Chamber: Senate
Status: summarized
Action: Introduced in Senate
Action Date: 2025-05-21
Date Added: 2026-07-16
Source: Congress.gov →

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