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Colorado Industrial Tax Credit Offering

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In May 2023, Governor Polis signed House Bill 23-1272 Tax Policy That Advances Decarbonization, which authorizes the Colorado Energy Office (CEO) to provide financial assistance through refundable tax credits for the exploration and implementation of eligible industrial greenhouse gas emission reduction projects in Colorado. The Colorado Industrial Tax Credit Offering (CITCO) will be a competitive, refundable tax refund administered through CEO. A total of $168 million in tax credits will be available over the program’s nine-year duration, through December 31, 2032.

Contact information
Wil Mannes, wil.mannes@state.co.us

Sign up for updates on the Industrial Tax Credit Offering

 

Overview

Type: Refundable tax credit

For: Industrial facilities (see Eligibility section below)

Amount: $168 million total

Match: Varies, amounts may be project and/or applicant-type specific

Program Length: Until funding is expended, or until December 31, 2032

Application Cycles: Semi-annual, closing on June 30 and December 31 of each year, with the first round expected to open April 1, 2024

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First application cycle open April 1 - June 30!

The first CITCO application cycle is open April 1 - June 30, 2024. Applicants must submit applications online through the CITCO application portal.

Download application materials

Apply for CITCO

Before beginning your application, please be sure to review both the general standards and guidelines and the standards and guidelines for your specific project type.

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Informational webinar, office hours, and Q&A responses

CEO hosted an informational webinar about the tax credit offering on April 3 at 2:00 PM MT.

Watch informational webinar recording

CEO will also host regular office hours from 11:00 AM - 12:00 PM MT every second and fourth Wednesday of each month during the application period (April, May, June).

CEO will publicly post responses to questions posed about the program.

View CITCO Q&A responses

Eligible applicants

Industries within North American Industry Classification System (NAICS) codes 31-33 are eligible to apply.

Eligible project types

  • Industrial Studies, including energy and emissions audits,  feasibility studies, or front-end engineering and design studies meeting CITCO’s standards (to be determined).
  • Improvements that help measurably reduce greenhouse gas emissions, including:
    • Replacing fossil-fuel-powered off road equipment, such as forklifts and construction equipment, with electric equipment
    • Replacing fossil-fuel-fired equipment for space or water heating or industrial process heating with high-efficiency electric equipment
    • Replacing fossil-fuel-fired or compressed air-driven industrial process equipment with high-efficiency electric equipment
    • Placing in service advanced refrigeration systems that reduce greenhouse gas emissions
    • Placing in service waste heat recovery technology
    • Upgrading or implementing energy monitoring systems
    • Installing high efficiency electric pumps, motors, compressors, and lighting
    • Installing variable volume or load efficiency equipment
    • Installing carbon capture equipment that demonstrates a net reduction in greenhouse gas emissions and provides a permanent durable carbon storage plan; the captured carbon may not be used for enhanced oil recovery
    • Installing equipment used for collection of biomethane
    • Replacing fossil-fuel-fired equipment with hydrogen fueled equipment
    • Installing hydrogen fueling stations for fuel cell vehicles at industrial facilities
    • Converting fossil-fuel-powered pumps, compressors, and controllers to compressed air-driven or electric-driven pumps, compressors, and controllers
    • Installing onsite energy storage
    • Installing or upgrading to utility service feed equipment to directly support the implementation of any of the electrification improvements
    • Placing in service carbon management systems including direct air capture and other forms of carbon dioxide removal
    • Material substitutions within industrial processes to reduce industrial process greenhouse gas emissions by a minimum of 15% percent when compared to existing production practices; and
    • Other similar improvements as established in CITCO’s standards (to be determined)

Please Note: The office may reserve credits for the current or any future tax year based on the anticipated completion or in-service date indicated in the entity's application. However, credits may not be reserved for studies or projects completed before the end of the application and approval process.

A total of $168 million in refundable tax credits is available to eligible entities over the next nine years. An initial total of $8 million will be available for the first application cycle. CEO retains the right to increase this amount based on the applications it receives.

Minimum & Maximum Funding Awards:

  • Industrial Study: up to 30% of approved costs, not to exceed $1 million
  • Improvements: up to 30% of approved capital costs, not to exceed $5 million (does not include design costs)
    • Applicant must request a tax credit of at least $75,000 for project capital costs
    • CEO may increase cost coverage to 50% in select cases based on an applicant’s ability to demonstrate project innovation

CITCO has both general and project type specific standards & guidelines: 

View general standards & guidelines

View project type specific standards & guidelines

Applicants who meet program criteria and eligibility will submit applications and all required supporting documents through the online application portal

Download application materials

Step I: CEO will review applications to determine that the applicant and project type are eligible and the applicant has submitted all required information.

Step II: A review committee will score project applications based on specific criteria for each project type

CEO will systematically weight scores to prioritize funding for projects in disproportionately impacted communities and nonattainment areas and for small disadvantaged businesses. 

CEO will notify awardees of the awarded tax credit amount and the income tax years when the awarded tax credit will be available. Awardees will report their associated study or improvement expenses to CEO through regular reporting methods. CEO will provide a tax credit certificate for the awardee to file with the Colorado Department of Revenue during their tax filing period. If the credit exceeds the income tax due for the taxpayer, the excess credit will be refunded.