CapturePoint has sold the federal tax credits from its Arkalon carbon capture plant in Kansas, and the deal carries a $105 million label. The plant captures a modest volume of CO2 and had been running for less than a year. Neither the buyer nor the price per credit was announced. What the $105 million actually measures matters more than its size.
Key takeaways
- CapturePoint LLC closed a private Section 45Q direct transfer tax credit transaction for its Arkalon CO2 capture facility in Kansas, announced on 18 March 2024, which Enerdatics values at $105 million.
- The CapturePoint agreement places 100 percent of the Section 45Q tax credits generated by the Arkalon facility for 12 years, and Marathon Capital placed the transaction privately.
- The Arkalon CO2 capture facility can capture 250,000 metric tons of CO2 a year from nearby bio-ethanol production and has been in service since April 2023.
- Enerdatics derives the $105 million value of the Arkalon credit sale from the Section 45Q credit of $35 per ton available for CO2 captured and used for enhanced oil recovery, applied to the plant's annual capture over the 12-year term.
- The CapturePoint deal is the only tax credit transfer among 15 US carbon capture and storage financings Enerdatics records from 2023 to 2025; the others are government grants, equity raises and one tax equity investment.
What is a Section 45Q tax credit transfer?
It is the outright sale of a federal carbon capture tax credit to a buyer that can use it against its own tax bill. Section 45Q is the US credit paid for each metric ton of CO2 that a facility captures and then stores underground or puts to use. The Inflation Reduction Act made these credits transferable, which means the owner of a capture plant can sell them for cash rather than finding a tax equity partner to absorb them.
The distinction matters for a company of CapturePoint's size. Tax equity brings an investor into the project itself, with its own share of cash flows and its own governance rights. A direct transfer is a simpler trade. The plant keeps its ownership, generates the credits as it captures CO2, and hands them to the buyer as they arise.
In this case the sale covers every credit the plant generates, with no retained slice. Marathon Capital arranged it privately, and the buyer stayed out of the announcement.
How does Enerdatics arrive at $105 million?
By multiplying three public numbers, which reproduce the stated transaction value exactly. The plant's capacity is 250,000 metric tons a year. The applicable credit is $35 per ton, the rate the record applies to CO2 captured on or after February 2018 and used for enhanced oil recovery. The placement runs for 12 years. Those inputs give $8.75 million of credits a year and $105 million over the term, and Enerdatics calculates the value of the entire deal on that basis.
That method makes the figure a face value, not a cash receipt. It assumes Arkalon captures at its full rate every year for 12 years and that every ton qualifies at the enhanced oil recovery rate. It also assumes the buyer pays full value for each credit. The record does not say what the buyer paid per dollar of credit, so the cash CapturePoint actually receives may differ from the headline.
The 12-year term is not an arbitrary choice either. Section 45Q credits are available for 12 years from the date a capture facility enters service. Arkalon entered service in April 2023, so the agreement covers the plant's whole credit life as the rules stand today.
Why does it matter that the CO2 goes to enhanced oil recovery?
Because the use of the CO2 decides which credit rate applies, and so what each ton is worth to the buyer. Enhanced oil recovery is the practice of injecting CO2 into older oil fields to push out more oil, with much of the CO2 remaining underground afterwards. CapturePoint's business covers capture, transport and use of CO2 for enhanced oil recovery, as well as secure underground storage.
The $35 per ton rate in the record is the one tied to that use. A plant that sent its CO2 somewhere else would sit under a different rate, and the arithmetic behind the $105 million would change with it. The valuation therefore rests on a physical route for the gas as much as on the capture plant itself.
Why sell twelve years of credits at once?
Because a single placement turns an uncertain annual income into one contracted arrangement with a known counterparty. Arkalon earns credits only when it captures CO2. Selling them year by year would expose CapturePoint to a new negotiation, and a new buyer, every time. A 12-year agreement for all of them removes that exposure and gives the company a revenue line it can plan around.
The record says the proceeds will support CapturePoint's initiatives and enhance its carbon capture and storage capabilities. In other words, the credits from one running plant help fund what comes next.
Enerdatics records 26 tax credit transfer financings in the US in 2024, with a combined value of $3.33 billion, or an average of about $128 million each. At $105 million, the Arkalon deal sits a little below that average while coming from a single plant capturing 250,000 tons a year. Within carbon capture specifically, it stands alone: of the 15 US carbon capture and storage financings Enerdatics records from 2023 to 2025, seven are government grants, six are equity raises, one is the $205 million tax equity investment Harvestone Low Carbon Partners secured from Bank of America for the Blue Flint ethanol carbon capture project, and one is CapturePoint's transfer.
What does the deal signal for US carbon capture finance?
It suggests that an operating capture plant can be financed on its credits in the same way as a wind or solar farm. Most carbon capture money in Leap's records still comes from government grants or venture-style equity for technology that is not yet running. Arkalon is different. It is operating, its output is measurable, and its credits can be sold forward. That is the same logic behind deals such as TransAlta's agreement to sell most of the production tax credits from two Oklahoma wind farms for ten years.
The timing also lines up with activity on the storage side of the business. On the same day as the CapturePoint announcement, TotalEnergies agreed to buy Talos Energy's carbon storage business, which includes a share of Bayou Bend on the Texas Gulf Coast. Capital is reaching both ends of the chain: the plants that capture CO2 and the sites that store it. The open question for buyers of credits like Arkalon's is how much of the face value they should pay for, given that the credits depend on a plant running at full rate for 12 years.
Frequently asked questions
How much did CapturePoint raise from the Arkalon tax credit sale? Enerdatics values the transaction at $105 million, based on 250,000 metric tons of CO2 a year at the Section 45Q rate of $35 per ton over a 12-year term. The cash price per credit was not disclosed.
Who arranged the CapturePoint 45Q transaction? Marathon Capital supported CapturePoint and placed the Section 45Q tax credit transfer privately. The buyer of the credits was not named.
Where is the Arkalon carbon capture facility? The Arkalon CO2 capture facility is in Kansas. It captures CO2 from nearby bio-ethanol production, has been in service since April 2023, and its CO2 is used for enhanced oil recovery and stored underground.
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