As investment in carbon capture and sequestration (CCS) projects grows, project proponents must remain apprised of recent developments in the complex permitting landscape. One CCS project that Kern County recently permitted illustrates the path toward permitting large-scale CO2 storage, which will help reduce emissions across energy, industry, transportation, and other sectors.

Why Carbon Capture and Sequestration Matters

California’s commitment to reducing greenhouse gas emissions aligns with the urgency for permitting CCS projects. Kern County recently approved a CCS project that alone is projected to permanently store over 49 million metric tons of CO2. CCS projects such as the Kern County project thus significantly advance California’s commitment to accelerating deployment of carbon management technologies.

But the regulatory path for CCS is rigorous. Several agencies are tasked with ensuring that projects meet safety and environmental standards. These standards typically focus on CO2 migration, water quality, and habitat conservation. And the agencies tend to have overlapping jurisdiction on these standards. Project proponents thus should anticipate comprehensive environmental reviews and be prepared to address these concerns.

What Developers Should Know

For CCS projects, California’s regulatory framework requires multiple federal, state, and local permits, each with specific compliance standards and timelines. Essential federal permits may include the Class VI underground injection control permits, National Pollutant Discharge Elimination System permits for water quality control, and incidental take permits under the Endangered Species Act.

State permits add a further layer of complexity. For example, CCS projects may need permits from the California Department of Fish and Wildlife for species protection as well as waste discharge requirements or water quality certification from a Regional Water Quality Control Board.

CCS projects also must comply with local permitting requirements, such as approvals for any required zoning changes, conditional use permit, building permit, or encroachment permits. These local permits, in turn, trigger environmental review requirements under the California Environmental Quality Act.

Grant and Funding Considerations

There is significant support for CCS projects through federal grants. For example, of its total $34,407,006 projected budget, the Kern County project received $26,984,027 in grants from the Department of Energy’s Office of Fossil Energy and Carbon Management. These funding opportunities underscore federal and state commitments to advancing carbon capture and incentivizing large-scale CCS initiatives. For developers and other project proponents, securing grants from agencies can help offset substantial costs associated with project planning, infrastructure, and regulatory compliance. Additionally, with the recent passage of California’s Assembly Bill 2731 (AB 2731), carbon capture, utilization, storage equipment projects, and direct air capture projects that qualify for federal tax exemptions are now eligible for tax-exempt bond financing. This legislative development further expands financing options, providing support needed for projects that advance carbon capture technology.