Illinois Paves Way for Carbon Capture and Sequestration with SAFE CCS Act | Insights | Mayer Brown (2024)

Illinois has established a comprehensive regulatory framework for the development of carbon capture and sequestration (CCS) projects. The state's legislature has passed Senate Bill 1289, also known as the SAFE CCS Act, which was signed into law on July 18, 2024. This groundbreaking legislation was the result of collaborative efforts among various stakeholders, including industry representatives, environmental groups, and labor organizations.

Key Features of the SAFE CCS Act

The SAFE CCS Act lays down a set of standard features essential for the regulation of CCS projects:

• Pore Space Ownership: The act formalizes the ownership of pore space by the owner of the surface estate, explicitly prohibiting the severance of pore space from the surface estate. This measure ensures that the rights to use the subsurface for carbon storage are clear and not subject to dispute.1
• Unitization Procedures: For a CCS project to proceed, the act requires the consent of owners representing at least 75% of the project's surface area. This provision is designed to ensure that a significant majority of those directly affected by the project are in agreement with its implementation.2
• Trust and Administrative Funds: The legislation establishes a Trust Fund to cover costs related to remediation, monitoring, and compensation, funded by annual per-ton fees levied on CCS operators.3 Additionally, a separate Administrative Fund will be created to support the regulatory activities associated with overseeing CCS projects and will be funded from any sources such as fees, fines, and penalties collected under the Safe CCS Act.4

Environmental, Safety, and Labor Regulations

Beyond the standard regulatory framework, the SAFE CCS Act incorporates several specific provisions aimed at ensuring environmental protection, safety, and fair labor practices, including:

• "Do No Harm" Mandates: CCS projects must demonstrate that they will not result in a net increase in potential emissions of the six pollutants regulated under the Clean Air Act's National Ambient Air Quality Standards.5
• Carbon Pipeline Moratorium: The act imposes a temporary halt on the approval of new carbon pipelines, which will last until July 2026 or until new safety rules are established by the federal Pipeline and Hazardous Materials Safety Administration, whichever comes first.6
• Prohibition on Certain Uses of CO2: The use of CO2 from CCS projects for enhanced oil and gas recovery or in ways that could lead to water pollution within the state is strictly prohibited.7
• Special Funds: The act introduces additional funds, including a Water Resources Fund, an Emergency Planning and Training Fund, and an Environmental Justice Grant Fund, to address specific concerns and support affected communities.8
• Emergency Response and Training: Operators are required to have emergency response plans and provide training to ensure preparedness for incidents such as fluid or carbon dioxide release. A proper training program would include regular training for employees and emergency responders on how to handle carbon dioxide, public safety, and evacuation plans.9
• Long-Term Monitoring: Developers of carbon capture projects are required to obtain state permits that require ongoing safety monitoring and post-injection site care for a minimum of 30 years.10
• Labor Agreements: The legislation enforces project labor agreements that include apprenticeship opportunities for minorities and women and establish fair labor relations between operators and labor organizations.11

Conclusion

By setting out detailed requirements for permitting, monitoring, and safety, Illinois aims to facilitate the development of CCS projects while ensuring public and environmental protection. With an effective date of July 18, 2024, the Act represents a significant step in regulating and advancing CCS technology within the state.

¹ SB 1289, 103rd Gen. Assemb., § 10 (Ill. 2024). SB1289enr 103RD GENERAL ASSEMBLY (ilga.gov).

² Id. §§ 15(b), 15(e)(3).

³ Id. § 59.17.

⁴ Id. § 59.17; § 59.13; see also Lawmakers move to pause – then further regulate – carbon dioxide pipeline development, Capitolnewsillinois.com ("The bill requires monitoring of injection wells for at least 30 years after they close, a process that must be approved by the state and federal government. It also grants the Illinois Commerce Commission expanded authority to impose fees and require certain safety models to be used during permitting for carbon sequestration and transportation projects. The fees would go into a group of newly created state funds that will help train first responders and provide equipment to manage potential emergency situations associated with carbon capture technology.").

⁵SB 1289, 103rd Gen. Assemb., § 59.1 (Ill. 2024), supra note 3.

⁶ Id. § 20(g).

⁷Id. § 5; § 10; § 21(y).

⁸ Id. § 59.14; § 59.7.

⁹ Id. § 4-615; § 59.5; § 59.6.

¹⁰ Id. § 59.9; see also New Illinois law lays out safety requirements for future carbon sequestration projects • North Dakota Monitor (It requires developers of carbon capture projects to obtain state permits that require safety monitoring during a project’s life cycle and for at least three decades after it finishes. It also requires that the projects result in a net reduction of greenhouse gases – satisfying some environmentalists who worry companies might end up contributing more pollution in building these projects than they would actually sequester.)

¹¹ Id. § 59; § 59.17.