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45Q - Frequently Asked Questions

In partnership with the United States Energy Association, the U.S. Department of Energy's (DOE) Office of Fossil Energy and Carbon Management and the National Energy Technology Laboratory (NETL) are hosting a hybrid training workshop to inform stakeholders and lifecycle analysis (LCA) professionals of the tools and resources available from NETL to support the development of an LCA that is compliant with the 45Q requirements.

Click here for more information or to register for in-person or virtual attendance for the 45Q Carbon Oxide Conversion LCA Training WorkshopMore

NETL will also be releasing additional resources that can be leveraged for completing the 45Q LCA requirement in the coming months. These resources include example LCAs, standardized comparison product system (CPS) life cycle inventory data for carbon oxide capture from ammonia and ethanol facilities, and an updated 45Q addendum to the NETL CO2U LCA Guidance document.

Helpful links:

For any of the LCA software, we want to ensure that we’re able to review the models exactly as the applicant or third-party analysts have constructed and used them for LCA results. To this end, an entire database export is preferred, as that reduces the chances for missing data or processing steps required by NETL. For example if the LCA model is prepared in openLCA, we would prefer the model be submitted as a database backup (i.e., a .zolca file). Some other examples are: sphere GaBi - .gcd and SimaPro .SPBackup

Carbon oxides used as a tertiary injected in enhanced oil or natural gas recovery should be treated as a co-product and follow the appropriate co-product management methods described in the CO2U Guidance and 45Q Addendum, e.g., system expansion. The expanded system can be truncated at CO2 production with the use phase assumed to be the same in the proposed and comparison product systems. The comparison CO2 can be CO2 from another source such as natural dome CO2 which is frequently used in EOR operations.

Carbon oxides sent to be disposed of in secure geological storage should be treated as a waste with the waste management operations (e.g., energy used for CO2 storage) included in the system boundary.

However, the amount of carbon oxides sent to a recovery project or disposal should not be included in the quantity of carbon oxide utilized (i.e., the denominator in the DF calculation, as seen in the 45Q Addendum Section

Note: The applicant should see TR 1-45Q regarding treatment and credit calculation for the non-utilization fractions of the total captured CO2 stream.

Federal employees are obligated to not disclose any confidential information under 18 U.S.C. 1905. As a Federal agency, DOE must comply with requests made under the Freedom of Information Act (FOIA) (5 U.S.C. 552). Under FOIA, Federal agencies are required to disclose agency records requested by a member of the public, including information received from outside parties, unless FOIA specifically exempts the information’s disclosure. FOIA Exemption 4 (5 U.S.C. 552(b)(4)) exempts from FOIA disclosure confidential commercial and financial information obtained from a person outside the agency.

Whenever a document submitted to DOE by a private business contains information which may be exempt from public disclosure, it will be handled in accordance with the procedures in 10 CFR 1004.11. While DOE is responsible for making the final determination with regard to the disclosure or nondisclosure of information contained in any requested documents, DOE will consider the submitter's views in making its determination. Therefore, if the submitter believes the information submitted would constitute trade secrets or commercial/financial information that is privileged and confidential, it is recommended that the submitter label the documents as such.

An adequate critical review requires a thorough evaluation of the Life Cycle Inventory (LCI) data used as part of the study. 26 CFR 1.45Q 4(c)(5) states that in addition to a report, the model must be submitted if the LCA has not been verified by an independent third-party review. 26 CFR 1.45Q 4(c)(4) indicates that if conducted, an independent third-party review must include an assessment of the model and supporting data.

If the applicant does not want to disclose this information to DOE, an alternative would be for the applicant to seek an independent third-party review of their LCA. However, the third-party reviewer is expected to thoroughly evaluate the model and LCI as noted above. If DOE, in its review, determines that this level of review did not occur or was insufficient, resulting in major errors, DOE may request additional information from the applicant. Additional information regarding this option is noted in Section 2.4.5 of the 45Q Addendum.

DOE may need to share nontax information with the IRS, whose employees are also subject to confidentiality laws (Privacy Act (PA), Freedom of Information Act (FOIA), and IRC section 6103 and other USC code sections).

As noted in the previous FAQ, a complete critical review requires that all relevant portions of the model are reviewed. Data from third-party providers must be verified in some way to complete a review.

As noted in the 45Q Addendum Section 1.5, “use of any third-party licensed data shall include permission from the data providers for DOE review access.” If this permission cannot be obtained, summary information regarding the third-party processes must be submitted and DOE may contact you to verify its accuracy.

From the CO2U Guidance Section “The LCA shall include at least 99% of the carbon and energy inputs and outputs to the system boundary. Completeness shall be demonstrated based on a carbon and energy balance. Completeness shall be tested by determining if the inclusion of secondary or tertiary processes to the system boundary would change the environmental impact result for the Product System by 1%. If more than one process is excluded the sum of the exlusions shall change the result less than 1%. Completeness shall be determined based on the expected or median value for data representativeness.

Thus, the DOE review may find errors or data which are not of sufficient quality or representativeness but changing these items do not or cannot change the result (the Displacement Factor) by greater than 1%. Such errors would be considered “immaterial” and would not affect the acceptance of the submitted LCA.

Section of the 45Q addendum makes clear that a sensitivity analysis is required for 45Q LCAs, while an uncertainty analysis is not. The results of the sensitivity analysis should lead to a break-even analysis on highly sensitive parameters.

Section of the CO2U Guidance, which is not superseded by a corresponding 45Q Addendum section, discusses a common approach for a sensitivity analysis. Exhibit 2-27 in the same section (recreated below) shows an example of an expected results graph from this analysis. Changing the percentage of the parameters “all-at-once” does not satisfy the requirements for the sensitivity analysis, which instead should test the individual contribution of uncertain parameters to the overall impacts. To do this, the parameters should be changed by +/- 10% “one-at-a-time” so the individual parameter impacts can be seen and potentially displayed in a “tornado graph.” Please refer to the previously referenced CO2U Guidance requirements for a sensitivity analysis. Highly sensitive parameters must be determined to review and show how their values affect the LCA results and if their values are within expected or verified ranges. In the example below, this would mean calculating the value at which Parameters A and B cause the total lifecycle greenhouse gases (GHGs) of the Proposed Product System to equal the lifecycle GHGs of the Comparison Product System.

Bar chart

According to Section of the 45Q Addendum, the expectation is that “the applicants will develop custom, parameterized unit process or unit processes of all operations within the operational control of the utilization project.” However, if black box unit processes are used as background data, the input quantities of the black box process may be varied during a sensitivity analysis. For example, the quantity of material inputs can be adjusted by a set percentage point individually the same way a parameter would change.

Additionally, Section of the CO2U Guidance provides information on when the use of proxy data requires a sensitivity analysis. This section states that documentation and a sensitivity analysis are required to evaluate data gaps. “For example, if a unit process for a material does not exist, identify at least two proxy data sets equivalent to the mass of the required material input that would theoretically bound a low and high environmental profile for a similar type of material. Double the mass of the requirement for each profile and test the sensitivity of the study results to the importance and relative changes in study-level results. If the study results are determined to be sensitive (materially changes the interpretation of the study findings) then this deficiency and its impact on results must be prominently noted with the study conclusion; see Section on sensitivity analysis. Alternatively, if time and resources permit, conduct primary research and modeling to fill the data gap.”

Sufficient information must be provided to allow for confirmation of the applicant's mass, energy, and carbon balances, as stated in Section 2.4.5 of the 45Q Addendum. Generally, this should include information regarding the mass, energy content, and carbon content of each input and output. For example, the energy balance should essentially be a comprehensive accounting of all energy demands and any energy products/co-products – types, amounts, sources, properties (e.g., heating value). This could be presented in tabular format to satisfy the completeness check requirements. It is not necessary to close the energy balance so long as the source of discrepancies can be described and justified qualitatively. However, non-closure of the engineering balances due to data gaps may be subject to proxy data requirements, as discussed in Section of the CO2U Guidance.

An energy balance table similar to the carbon balance table may be required for unit processes that generate energy flows, consume significant energy flows, or include sensitive parameters for the model. The NETL guidance requires that 99% of mass and energy of inputs and outputs are included in the system boundary (Section of the CO2U Guidance) unless the applicant can justify otherwise.


Section of the 45Q Addendum provides a hierarchy for selecting the relevant technologies for the Comparison Product System. In order, that section requires the representation of the U.S. average greenhouse gas technology or the industry standard practice if the U.S. average is unavailable.

As noted in Section of the CO2U guidance, the U.S. average GHG performance technology is calculated as the production weighted average emissions intensity of all facilities producing the product. This can be calculated as the total GHG emissions across all facilities divided by the total product across all facilities. This approach accurately represents the full range of emissions intensity for the product of interest in the comparison system. Also, it must include facilities that have carbon capture equipment installed in the industry of interest. EPA reporting databases, such as the Greenhouse Gas Reporting Program (GHGRP), can be used in combination with industry production data to characterize a sector’s facility-level GHG emission intensity performance. This information should be coupled with appropriate supply chain emissions to account for purchased raw materials and energy.

According to the EPA GHGRP 2022 data, there were 18.1 million metric tons of CO2 captured from industrial sources (as reported by subpart PP), comprising 117 different facilities.1 This does not include CO2 that is captured and utilized on-site (e.g., CO2 capture from ammonia production and utilization at integrated facilities to make urea). According to EPA, the top sectors in terms of number of facilities capturing CO2 are ethanol, natural gas processing, and ammonia.

If CO2 is sourced from one of the top sectors that are conducting carbon capture already, the existence of carbon capture should be reflected in the Comparison Product System technology. It is not valid to compare a facility with carbon capture as the source of CO2 in the Proposed Product System to the same facility without carbon capture in the Comparison product system because the latter would not reflect the relevant technologies in the hierarchy established in Section

Section of the CO2U guidance also describes in detail how to determine the functional unit for the proposed system, which in turn dictates what products must also be included in the comparison system.

The CO2U GuidanceSection advises applicants to include any process within the system boundary that may contribute >1% to the global warming potential. However, the 45Q Addendum notes that if the downstream impacts are equivalent between the two systems, then the system boundary can exclude identical processes after the point of functional equivalence.

The NETL guidance does not specifically allow truncation of data upstream of the utilization process even if it is a consistent input for both the proposed and comparison systems. However, from Section “The LCA shall include at least 99% of the carbon and energy inputs and outputs to the system boundary. Completeness shall be demonstrated based on a carbon and energy balance. Completeness shall be tested by determining if the inclusion of secondary or tertiary processes to the system boundary would change the environmental impact result for the Product System by 1%. If more than one process is excluded the sum of the exclusions shall change the result less than 1%. Completeness shall be determined based on the expected or median value for data representativeness.”

If a data limitation exists, we recommend that you identify a proxy and note the use of the proxy as part of your completeness check. Note, the NETL openLCA LCI Database does not have to be the sole source of life cycle inventory data. You are welcome to use additional public and commercial sources to supplement any missing data.