Principal Issues: How is the determination of the "actual eligible use percentage", as defined in subsection 211.92(1) of the Act, of a CCUS capture project impacted where captured carbon is transported to dedicated geological storage (i.e., an eligible use) through a common pipeline which also transports captured carbon for use in ineligible uses, if any, where the actual carbon dioxide molecules from a capture facility may not be the same molecules that arrive at a storage hub due to the fungible nature of carbon dioxide?
Position: The fungible nature of carbon dioxide on a common pipeline does not, in and of itself, impact the determination of a CCUS project's actual eligible use percentage. A taxpayer must measure the quantity of captured carbon its CCUS project supported for storage or use in eligible and ineligible uses. In order for a taxpayer to demonstrate that the captured carbon of its CCUS project supported a particular end use where the taxpayer transports the captured carbon through a common pipeline, the taxpayer should be able to show that it is technically feasible for the captured carbon to be transported to the relevant end use and that the end use is measurable and verifiable, among other things as applicable in the particular circumstances.
Reasons: Textual, contextual, and purposive analysis of the relevant provisions.
