Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Congressional research reportApr 13, 2021

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Reporting Carbon Dioxide Injection and

Storage: Federal Authorities and Programs

April 13, 2021

Congressional Research Service

https://crsreports.congress.gov

R46757

SUMMARY

Reporting Carbon Dioxide Injection and

Storage: Federal Authorities and Programs

Carbon capture and storage (CCS) of carbon dioxide (CO 2) emissions is a suite of processes and

technologies viewed by some stakeholders as essential for mitigating anthropogenic CO 2

emissions into the atmosphere. Others have raised concerns about CCS technical efficacy and

cost-effectiveness. As the application and deployment of these systems evolve, reliable

monitoring, measurement, and reporting of carbon dioxide injection and storage could contribute

to the assessment of CCS’s role in mitigating GHG emissions.

R46757

April 13, 2021

Angela C. Jones

Analyst in Environmental

Policy

Under Clean Air Act (CAA) authorities, the U.S. Environmental Protection Agency (EPA) has promulgated regulations for

mandatory reporting of greenhouse gases (GHGs) and administers the Greenhouse Gas Reporting Program (GHGRP).

GHGRP regulations require reporting of GHG emissions from large sources of GHGs and certain other facilities, but do not

limit GHG emissions. EPA has established 46 GHG source categories subject to the regulations, with nearly 8,000 facilities

in the United States currently reporting GHG data. Facilities report on six GHGs, including CO 2, and are required to follow

source-specific requirements for measurement, reporting, and verification. In 2010, EPA issued GHGRP regulations for

facilities injecting CO2 for geologic sequestration or enhanced oil recovery (EOR). Geologic sequestration is the process of

storing a fluid, including condensed CO2, by injecting it deep into an underground geologic formation, where it can be

permanently trapped or transformed. In some EOR operations, CO 2 is injected into aging oil reservoirs to produce additional

oil; most of the injected CO2 is pumped out during oil production, but a portion can be stored incidentally in the underground

reservoir. Under the GHGRP regulations (40 C.F.R. Part 98, Subpart RR), facilities injecting CO2 for geologic sequestration

must report the amount of CO2 injected and sequestered and other CO2 data to EPA annually and have an approved

monitoring, reporting, and verification plan, among other requirements. Subpart UU of 40 C.F.R. Part 98 requires that

facilities injecting CO2 for EOR, or for any purpose other than sequestration, report the amount of CO 2 received on an annual

basis. In general, Subpart RR requirements are more rigorous and comprehensive compared to Subpart UU requirements. For

reporting years 2012-2019, five facilities have reported to EPA under Subpart RR, and 125 facilities have reported under

Subpart UU.

EPA also requires certain tracking and reporting of CO2 through its underground injection control (UIC) authorities provided

in the Safe Drinking Water Act (SDWA). Under SDWA, EPA has promulgated UIC regulations and established minimum

federal requirements for injection wells, including wells used to inject CO2 for EOR (classified as Class II wells) and wells

used to inject CO2 for geologic sequestration (Class VI wells). UIC regulations are intended to protect underground sources

of drinking water from potential contamination associated with underground injection activity. UIC regulations require

owners or operators of Class VI wells to report the quantity of CO 2 injected for sequestration to the UIC program authority,

either EPA or a state. EPA has not established comparable UIC CO 2 reporting requirements for Class II wells. Most Class II

wells are located in states with UIC Class II program oversight and enforcement authority (also known as primacy).

The U.S. Department of the Treasury (Treasury), through the Internal Revenue Code Section 45Q, requires taxpayers

claiming the federal tax credit for carbon sequestration to calculate and report CO 2 data. In the 2008 Consolidated

Appropriations Act, Congress authorized the tax credit and directed Treasury to develop regulations for “secure geological

storage” of CO2. For CO2 injected for geologic sequestration, taxpayers must report the amount of CO 2 disposed in

underground formations, measured at the source of capture. For CO 2 injected for EOR, taxpayers must report the initial

amount of CO2 injected, measured at the source of capture. In 2021, the Internal Revenue Service promulgated regulations

establishing that to be eligible for the Section 45Q tax credit, geologic sequestration facilities must comply with all Subpart

RR requirements, including requirements for measuring and verifying the amount of CO 2 sequestered. EOR facilities may

fulfill the requirement through compliance with either Subpart RR requirements or designated internationally adopted EOR

standards.

Issues for consideration by Congress related to reporting of CO2 injection and storage include oversight of EPA’s

implementation of, and the effectiveness of, GHG reporting regulations under the CAA and Treasury’s verification of Section

45Q tax credit claims. Other issues that may be of oversight or legislative interest may include whether GHGRP regulations

affect the development of commercial-scale CCS projects in the United States; how generally less-stringent federal

requirements for EOR facility reporting may influence future CCS project deployment; and the implications of potential

increases in the number of GHGRP reporting facilities and Section 45Q tax credit claims on federal agency capacity and

resources.

Congressional Research Service

Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Contents

Introduction ..................................................................................................................................... 1

CAA and SDWA CO2 Reporting Authorities and Programs ........................................................... 2

Clean Air Act Authorities and EPA’s Greenhouse Gas Reporting Program ............................. 3

General GHGRP Requirements .......................................................................................... 4

Safe Drinking Water Act Authorities and UIC Reporting Requirements .................................. 5

UIC Reporting Regulations and the GHGRP ..................................................................... 6

Reporting Requirements for CO2 Injection and Sequestration Facilities ........................................ 6

Subpart RR: Geologic Sequestration Facilities ......................................................................... 7

Reporting Requirements ..................................................................................................... 8

Monitoring, Reporting, and Verification Requirements ...................................................... 8

UIC Class VI Requirements and Connection with Subpart RR .......................................... 9

Subpart RR Data Reported................................................................................................ 10

Subpart UU: CO2 Injection (EOR) Facilities ........................................................................... 11

Subpart UU Data Reported ............................................................................................... 12

Internal Revenue Code Section 45Q Authorities ........................................................................... 13

CO2 Measurement and Reporting Requirements .................................................................... 14

Issues for Congress ........................................................................................................................ 19

Figures

Figure 1. CO2 Injected for Sequestration and EOR Reported Under Subpart RR......................... 10

Figure 2. Subpart RR Reporting Facilities, 2016-2019 .................................................................. 11

Figure 3. Subpart UU Reporting Facilities, 2011-2019 ................................................................. 13

Tables

Table 1. Federal CO2 Injection and Sequestration Reporting Requirements ................................. 16

Contacts

Author Information........................................................................................................................ 20

Congressional Research Service

Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Introduction

Carbon capture and storage (CCS) is a process designed to capture, store, and utilize carbon

dioxide (CO2) emissions from power plants and other industrial sources.1 Proponents of CCS

expect the process to reduce anthropogenic CO2 emissions into the atmosphere. Others have

expressed concerns about the technical efficacy and cost-effectiveness of CCS projects in

trapping and permanently storing CO2. As Congress continues to debate options to mitigate the

impacts of climate change, some Members have shown increasing interest in federal policies and

technical standards to track and report the CO2 injected underground and stored as part of CCS

operations.

A CCS system involves complex equipment, infrastructure, and processes to capture and

compress CO2 gas, transport the CO2 if necessary (usually via pipeline), and in most cases, inject

it through wells into an underground geologic formation. Most captured CO2 is currently used to

produce oil from aging oil fields in a process known as enhanced oil recovery (EOR). An

integrated CCS project can include EOR that uses CO2 captured from power plants or industrial

sources.

EOR, whether or not conducted as part of an integrated CCS system, is accomplished through

several different methods, including injecting gas into existing oil wells to extract additional oil

from the underground reservoir. CO2 is the most commonly used gas as an injectant in these

projects.2 Most EOR projects injecting CO2 use gas mined from natural underground sources of

CO2 rather than captured from anthropogenic emissions. After the CO2 is initially injected, a

portion of it remains trapped underground, while much of the remainder is recovered and

reinjected to recover additional oil. The amount of CO2 that is stored or recovered as a result of

EOR depends on the specific injection operations, geologic characteristics of the site, and other

factors. CO2 injection for EOR is subject to some federal CO2 reporting requirements, but is not

subject to verification or monitoring requirements for the purposes of determining the amount of

CO2 stored underground. According to the Global CCS Institute, in 2020, 11 facilities were

injecting captured anthropogenic CO2 for EOR in the United States as part of CCS operations.3

Captured CO2 is also injected into underground formations for geologic sequestration—the

process of storing or disposing of a fluid, including condensed CO2, by injecting it deep into an

underground geologic formation, where it can be permanently trapped or transformed.4 As of

early 2021, one project injecting CO2 for the sole purpose of geologic sequestration was operating

in the United States. The facility has injected more than 1 million metric tons of CO2 into an

1 CCS is also used to refer to carbon capture and sequestration and is sometimes referred to as CCUS—carbon capture,

utilization, and storage (or sequestration).

2 Leena Koottungal, “2014 Worldwide EOR Survey,” Oil & Gas Journal, April 4, 2014, p. 79. EOR is also conducted

using injection of steam (thermal recovery) and chemical injection. In the United States, 60% of EOR production is

accomplished using gas recovery (Department of Energy, “Enhanced Oil Recovery,” accessed on January 6, 2021,

https://www.energy.gov/fe/science-innovation/oil-gas-research/enhanced-oil-recovery).

3 Global CCS Institute, Global Status Report 2020, December 1, 2020. Projects include facilities operating for

commercial purposes and do not include pilot or demonstration projects. The Global CCS Institute defines a

commercial facility as a facility capturing CO2 for permanent storage as part of an ongoing commercial operation that

generally has an economic life similar to the host facility whose CO2 they capture, and that supports a commercial

return while operating and/or meets a regulatory requirement. Two additional CCS with EOR projects have operated in

the United States, but suspended CCS operations in 2020.

4 See CRS Report R44902, Carbon Capture and Sequestration (CCS) in the United States, for further information.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

underground saline formation since 2017.5 For context, the United States emits more than 6,000

million metric tons of CO2 annually.6

For CCS to result in permanent storage or sequestration of CO2, the target underground reservoirs

would need to permanently store the vast majority of injected CO2, keeping the gas isolated from

the atmosphere forever. That assumption is untested at this time, although research on the

behavior and fate of large quantities of injected CO2 is being conducted by the Department of

Energy in partnership with industry and other entities.7

Two federal statutes, the Clean Air Act (CAA) and the Safe Drinking Water Act (SDWA), serve as

the foundation for regulations for reporting quantities of CO2 injected and stored at CCS

facilities. The U.S. Environmental Protection Agency (EPA), together with state and local agency

partners, implements these regulations and associated requirements through the Greenhouse Gas

Reporting Program (GHGRP) and the Underground Injection Control (UIC) Program. The

Department of the Treasury (Treasury), through the federal tax code, also requires certain

reporting of CO2 quantities from facilities seeking a tax credit for CO2 sequestration.

Some policymakers and stakeholders have raised questions regarding the accuracy and scope of

regulatory requirements for tracking and reporting CO2 during the CCS process. They view CO2

measurement and reporting as key elements in assessing and informing current approaches to

reducing greenhouse gas (GHG) emissions and developing future climate change mitigation

policy.

This report reviews relevant federal statutory provisions and regulations for measuring and

reporting CO2 data associated with underground injection and storage and analyzes the

connections among the authorities. The report also provides information on CO2 reported from

GHGRP-covered facilities since 2011 and trends in reporting over time. Finally, the report

identifies potential policy issues related to collecting and reporting CO2 data for congressional

consideration. This report does not review other reporting policies that may apply to CCS

facilities, such as state air quality or state UIC regulations.

CAA and SDWA CO2 Reporting Authorities and

Programs

Facilities are required to report the volume of CO2 they inject underground pursuant to CAA and

SDWA authorities. This section reviews these authorities, related agency programs, and general

reporting regulations. This section also analyzes the connections and potential overlap among

CAA and SDWA CO2 reporting requirements.

5 Global CCS Institute, Global Status Report 2020, December 1, 2020. In the United States, four other CCS

demonstration projects have injected CO2 into saline formations for geologic sequestration (CRS discussions with

DOE, September 26, 2019, and September 21, 2020).

6 See CRS Report R45453, U.S. Carbon Dioxide Emissions in the Electricity Sector: Factors, Trends, and Projections,

by Jonathan L. Ramseur.

7 See, for example, DOE’s CarbonSafe program at https://www.netl.doe.gov/coal/carbon-storage/storage-infrastructure/

carbonsafe.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Clean Air Act Authorities and EPA’s Greenhouse Gas Reporting

Program

In the Consolidated Appropriations Act, 2008 (P.L. 110-161), Congress provided funding for EPA

to develop and publish a rule “to require mandatory reporting of greenhouse gas emissions above

appropriate thresholds in all sectors of the economy of the United States.”8 The accompanying

explanatory statement directed EPA to use its existing authority under the CAA to develop the

rule.9 In 2009, EPA published the final rule, “Mandatory Reporting of Greenhouse Gases”

(referred to as the “Mandatory Reporting Rule” hereinafter in this report), which went into effect

on December 29, 2009.10

The Mandatory Reporting Rule does not regulate GHG emission levels, but requires designated

GHG source facilities and specific product suppliers to report annual GHG emissions and

establishes monitoring, verification, and recordkeeping requirements for some sources. According

to EPA, the mandatory emissions reporting regulations allow the agency to collect information

necessary to carry out its responsibilities for addressing air pollution through regulating facilities

and encouraging voluntary emissions reductions.11 In the rule, EPA established 41 GHGRP source

categories, codified in 40 C.F.R. Part 98, Subparts B-PP, along with specific requirements for 30

of the source categories.12 EPA’s GHGRP is responsible for collecting and managing the GHG

data reported under the Mandatory Reporting Rule.

In 2010, EPA issued a rule amending the Mandatory Reporting regulations and established two

new GHGRP source categories for facilities that inject CO2 for sequestration or other purposes.

The rule, which went into effect on December 31, 2010, added two new subparts to 40 C.F.R. Part

98 that set out monitoring and reporting requirements for the new source categories.13 Subpart RR

applies to facilities with wells that inject CO2 solely for geologic sequestration, while Subpart UU

applies to facilities with wells used to inject CO2 for EOR and other non-sequestration purposes.14

The agency explained in the preamble to the 2009 rule that subsequent GHGRP regulations for

CO2 injection were needed to collect information from facilities about the CO2 supplied, emitted,

and sequestered in the United States as part of assessing all CO2 potentially emitted into the

atmosphere and for carrying out its CAA responsibilities.15 In the preamble to the final 2010

8 Consolidated Appropriations Act, 2008 (P.L. 110-161), Division F, Title II, enacted December 26, 2007. The act

directed EPA to issue a final rule no later than 18 months after the date of enactment.

9 Consolidated Appropriations Act, 2008 (P.L. 110-161), Division F, Title II Explanatory Statement.

10 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases; Final Rule,” 74 Federal

11 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases; Final Rule,” 74 Federal

of Greenhouse Gases; Proposed Rule,” 75 Federal Register 18578-18606, April 12, 2010, p. 18570.

12 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases; Final Rule,” 74 Federal

manufacturers, the rulemaking added new requirements to existing reporting and monitoring regulations.

13 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010.

14 40 C.F.R. Part 98, Subparts RR and UU. EPA also created three additional source categories subject to the GHGRP

in 2010 in a separate rulemaking (U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases

from Magnesium Production, Underground Coal Mines, Industrial Wastewater Treatment, and Industrial Landfills;

Final Rule,” 75 Federal Register 39736-39777, July 12, 2010).

15 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases; Final Rule,” 74 Federal

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

GHGRP Subpart RR and UU rule, EPA stated that the Subparts RR and UU CO2 data would

provide information on CCS and geologic sequestration needed to evaluate policy options for

mitigating GHG emissions.16

General GHGRP Requirements

EPA’s GHGRP regulations apply to (1) direct GHG emissions sources that emit over 25,000

metric tons of CO2 equivalent (CO2e) per year; (2) fuel and industrial gas suppliers; and (3)

facilities with CO2 injection wells.17 The regulations address 46 categories of industrial sources.18

Facilities with these sources must report data on the following six standard GHGs: CO2; methane

(CH4); nitrous oxide (N2O); and hydrofluorocarbons (HFCs), sulfur hexaflouride (SF6),

perflourinated compounds (PFCs), and other fluorinated gases.19 Most facilities are required to

report total annual facility-level emissions for each source category directly to EPA.20

In the regulations associated with each subpart, EPA established the specific methodology

facilities must use to calculate total annual CO2 emissions for that source category, as well as

requirements for monitoring, quality assurance, accounting for missing data, recordkeeping, and

reporting.21 Owners or operators must submit annual reports to EPA on emissions from the prior

calendar year and keep the records for at least three years.22 Annual reports to EPA must include a

GHG Monitoring Plan that provides an explanation of emissions data collection processes and

descriptions of the procedures and methods used for quality assurance, maintenance, and repair of

continuous monitoring systems.23 Subpart RR regulations require that facilities injecting CO2 for

geologic sequestration also have an EPA-approved monitoring, reporting, and verification (MRV)

plan (see the “Reporting Requirements for CO2 Injection and Sequestration Facilities” section of

this report for detailed measurement, monitoring, and planning requirements).24 No similar MRV

plan requirements are in place for Subpart UU CO2 injection facilities.

16 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75062.

17 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases; Final Rule,” 74 Federal

warming potential (GWP) as one metric ton of another GHG per year. To calculate the tons of CO 2e for each GHG, the

GHG is weighted by its GWP and their different impacts on forcing global temperature increase are indexed relative to

CO2, which has a GWP of 1. Some facilities with sources that emit fewer than 25,000 metric tons of CO 2e per year are

also covered by the Mandatory Reporting regulations, such as electricity generation facilities; facilities engaged in

aluminum production, ammonia manufacturing, and cement production; and some municipal solid waste landfills.

18 40 C.F.R. §98.

19 40 C.F.R. §98.3.

20 40 C.F.R. §98.2. GHGRP reporters use the electronic GHG reporting tool (E-GGRT) to report data to EPA, found at

https://ghgreporting.epa.gov/ghg/login.do.

21 State laws and regulations may require facilities to comply with other program and permitting requirements for CO

monitoring and reporting.

22 40 C.F.R. §98.3.

23 40 C.F.R. §98.3(g).

24 40 C.F.R. §98.448.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Safe Drinking Water Act Authorities and UIC Reporting

Requirements

SDWA authorizes EPA to regulate underground injection of fluids and serves as the framework

for regulating injection of CO2 for geologic sequestration and EOR. The stated purpose of the

act’s underground injection control (UIC) provisions is to prevent endangerment of underground

sources of drinking water (USDWs) from injection activities. Pursuant to SDWA authority, EPA

has promulgated UIC regulations and established minimum federal requirements for injection

wells. See CRS Report R46192, Injection and Geologic Sequestration of Carbon Dioxide:

Federal Role and Issues for Congress, by Angela C. Jones for further information.

Under SDWA, EPA has established six classes of underground injection wells, based on similarity

in the fluids injected, and has issued regulations for each well class.25 UIC Class II wells are used

to inject fluid associated with oil and gas production, including EOR wells used to inject CO2 into

aging oil reservoirs to recover additional oil. According to one survey, in 2014 (the latest survey

data available), 8,728 CO2-EOR wells were operating across the country as part of 109 CO2-EOR

projects.26 Approximately 80% of the CO2 used in EOR is derived from naturally occurring

underground reservoirs of CO2, while the remainder is captured from power plants or other

industrial sources.27 UIC wells used to inject CO2 for long-term containment (geologic

sequestration) are classified by EPA as Class VI wells.28 Currently, there are two permitted Class

VI wells in the United States, both at an Illinois ethanol production facility injecting CO2 into an

underground saline reservoir.29

SDWA authorizes EPA to delegate primary enforcement authority for UIC programs, known as

primacy, to individual states.30 For Class II wells only, states can assume primacy under either

SDWA Section 1422 or Section 1425. States delegated primacy under Section 1422 must meet

minimum EPA regulatory requirements promulgated under SDWA. Sixteen states have Section

1422 primacy, two of which have permitted EOR wells.31 Section 1425 primacy allows states to

administer their own Class II UIC program without meeting EPA’s regulatory requirements,

provided the state demonstrates that its program meets certain requirements under SDWA and

represents an effective program to prevent endangerment of USDWs.32 SDWA does not prohibit

states from establishing UIC requirements that are stricter than federal requirements. Twenty-four

states and three tribes have Class II primacy under Section 1425.33 Nearly 99% of Class II EOR

25 Injection well means a well into which “fluids” are being injected (40 C.F.R. §144.6). EPA UIC regulations are

codified at 40 C.F.R. §§144-148.

26 Leena Koottungal, “2014 Worldwide EOR Survey,” 2014. In 2019, EPA estimated that there were 119,467 Class II

EOR wells in the United States, including CO2-EOR wells and wells used in other EOR methods (EPA, FY19 State

UIC Injection Well Inventory, accessed November 27, 2020).

27 U.S. Environmental Protection Agency, “Federal Requirements Under the Underground Injection Program for

Carbon Dioxide (CO2) Geological Sequestration Wells,” 75 Federal Register 77230-77303, December 10, 2010, p.

77234.

28 U.S. Environmental Protection Agency, “Federal Requirements Under the Underground Injection Control (UIC)

Program for Carbon Dioxide (CO2) Geologic Sequestration Wells; Final Rule,” 75 Federal Register 77230-77303,

December 10, 2010.

29 EPA, FY19 State UIC Injection Well Inventory, accessed November 27, 2020.

30 SDWA §1422 (42 U.S.C. §300h).

31 EPA, FY19 State UIC Injection Well Inventory, accessed November 27, 2020.

32 SDWA §1425 (42 U.S.C. §300h).

33 U.S. Environmental Protection Agency, “Primary Enforcement Authority for the Underground Injection Control

Program,” accessed January 6, 2021, at https://www.epa.gov/uic/primary-enforcement-authority-underground-

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

wells are located in these states and tribal lands; therefore, most CO2-EOR wells are regulated

under state UIC programs rather than EPA regulations.

For Class VI geologic sequestration wells, two states, North Dakota and Wyoming, have primacy.

As of early 2021, neither of these states has issued a Class VI permit.

UIC Reporting Regulations and the GHGRP

EPA issued the GHGRP Subparts RR and UU rule and the UIC Class VI rule in tandem,

finalizing both in December 2010. In the GHGRP rule preamble, the agency stated its intention to

implement the regulations through a coordinated approach to ensure both USDW protection and

reporting of CO2 emissions.34

As noted, SDWA authorizes EPA to issue UIC regulations to protect USDWs from potential

contamination associated with underground injection activity.35 In the UIC Class VI regulations

(discussed in detail in “UIC Class VI Requirements and Connection with Subpart RR” later in

this report), EPA established some requirements for reporting the amount of CO2 injected.36 EPA

has not issued comparable requirements for Class II wells through the UIC program; any federal

GHG emissions reporting requirements for these wells would be within the GHGRP framework.

The GHGRP regulations for facilities with Class VI wells require these facilities to provide

additional CO2 data and meet additional requirements for monitoring, reporting, and verification

of CO2 sequestered. In certain instances, meeting UIC permit requirements for planning and

monitoring fulfills GHGRP requirements.37

Reporting Requirements for CO2 Injection and

Sequestration Facilities

EPA created two different GHGRP source categories for facilities with wells that inject CO2 into

underground formations, depending on whether the CO2 is injected for geologic sequestration, or

for EOR or other purposes.38 The establishment of separate source categories, along with different

associated regulations and requirements, reflects various factors, including differences in the

primary purposes of injection for EOR and geologic sequestration and variations in the status of

EOR and sequestration projects in the United States.

In EOR, a portion of the CO2 injected is stored incidentally during oil production operations—

permanent storage is not the main purpose of injection. EOR operations are generally well

injection-control-program.

34 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75064.

35 EPA and state UIC regulations may include other provisions that may play a role in tracking and reporting CO data

and emissions, such as operating standards, requirements for testing and monitoring of equipment, and requirements for

data reporting and recordkeeping.

36 U.S. Environmental Protection Agency, “Federal Requirements Under the Underground Injection Control (UIC)

Program for Carbon Dioxide (CO2) Geologic Sequestration Wells; Final Rule,” 75 Federal Register 77230-77303,

December 10, 2010.

37 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75063.

38 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

established, as the oil and gas industry has been conducting EOR since the 1970s, and many EOR

wells predate EPA UIC Class II regulations.39 EOR also uses the existing oil production wells and

related infrastructure to inject CO2; thus, the practice does not require new development,

construction, or major operational changes from existing oil and gas operations. EOR facilities

also typically pay by the ton for the CO2 used in injection, providing incentives to track and

minimize leakage of CO2 so it is able to be reinjected for additional oil recovery. For these and

other reasons, EPA generally established fewer regulations and less-stringent monitoring and

reporting standards for Subpart UU facilities with CO2 EOR wells.

In contrast, the purpose of projects injecting CO2 for geologic sequestration is permanent

underground storage of large amounts of CO2 (i.e., over 1 million tons). Injection for long-term

containment typically involves larger volumes of CO2 at higher pressures than injection for EOR,

and particular physical and chemical properties of the injected CO2 that require unique

regulations, according to EPA.40 In the 2010 GHGRP rulemaking, EPA stated that geologic

sequestration of CO2 is a newer process that is still being tested for its potential for large-scale

deployment in the United States.41 As of 2021, one CCS project has injected a large amount of

CO2 for geologic sequestration in the United States. Prior to the GHGRP rules, no federal

regulatory framework existed for measuring or reporting emissions and sequestration amounts

associated with geologic sequestration. Subpart RR contains detailed requirements for calculating

CO2 amounts sequestered or vented or leaked from surface equipment, as well as monitoring,

planning, and reporting requirements, all designed to support the agency’s efforts to assess the

use of geologic sequestration as a GHG mitigation option and inform policy decisions.42

Specific Subpart RR and Subpart UU requirements are described in the following sections, along

with an analysis of the relationship between Subpart RR and UIC Class VI regulations.

Subpart RR: Geologic Sequestration Facilities

The Subpart RR source category applies to any well or group of wells that inject CO2 into a

subsurface geologic formation for sequestration and applies to all UIC Class VI wells.43 There is

no emissions quantity threshold—any facility injecting CO2 into subsurface formations for

geologic sequestration must report the amount of injected CO2 to EPA.44 Certain research and

development projects may be exempt from compliance with Subpart RR if the projects meet EPA

eligibility requirements.45

39 EPA promulgated regulations for Class II wells initially in 1983 (48 Federal Register 14189, April 1, 1983).

40 EPA explained in the preamble to its 2010 UIC rule that regulations of injection of CO

2 for geologic sequestration is

necessary because of the relative buoyancy of CO2 in underground geologic formations, the mobility of CO2 within

subsurface formations, the corrosive properties of CO2 in the presence of water that can affect well materials, and the

potential presence of impurities in the injected CO2 stream (U.S. Environmental Protection Agency, “Federal

Requirements Under the Underground Injection Control (UIC) Program for Carbon Dioxide (CO2) Geologic

Sequestration Wells; Final Rule,” 75 Federal Register 77230-77303, December 10, 2010, p. 77233).

41 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75062.

42 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75062.

43 40 C.F.R. §98.440.

44 40 C.F.R. §98.441.

45 Exemptions include projects that investigate practices, monitoring techniques, or injection verification, or that

conduct applied research on long-term containment of CO2 in geologic formations. For example, some Department of

Energy Regional Carbon Sequestration Partnership Projects have qualified for the research and development exemption

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Reporting Requirements

Facilities with Class VI wells are required to calculate and report several types of CO2 data to

EPA in accordance with specific instructions and formulas in the regulations. The facilities are

required to report



the mass of CO2 received;

the mass of CO2 injected into the subsurface;

the mass of CO2 produced (mixed with produced oil, gas, or other fluids);

the mass of CO2 emitted by surface leakage;

the mass of CO2 emitted as equipment leakage or vented from surface equipment;

the mass of CO2 sequestered in subsurface geologic formations; and

the cumulative mass of CO2 sequestered since the start of required reporting.46

Subpart RR regulations also require facilities to use a mass balance equation to calculate the mass

of sequestered CO2, subtracting the CO2 emitted from leaks or vented emissions from the CO2

injected to calculate the mass of CO2 sequestered.

Monitoring, Reporting, and Verification Requirements

Under Subpart RR, covered facilities must follow specific procedures for measuring the CO2

received, injected, and produced.47 Facilities must also monitor equipment for leaked and vented

CO2.48 As noted above, EPA explained in the Subpart RR and UU rulemaking that the specific

requirements for calculating and reporting CO2 quantities are necessary to validate these data and

evaluate geologic sequestration.49

Subpart RR regulations also require geologic sequestration facilities to develop a proposed

monitoring, reporting, and verification (MRV) plan and submit the plan to EPA. According to

EPA, the plan is intended in part to help the agency verify CO2 sequestration quantities and assist

in developing GHG emission reduction strategies.50 The MRV plan must include the following

elements:



delineation of the maximum monitoring and active monitoring areas;

identification of potential CO2 leakage pathways in the maximum monitoring

area and the likelihood, magnitude, and timing of surface leakage through these

pathways;

strategy to detect and quantify CO2 surface leakage;

strategy to establish the expected baselines for monitoring CO2 surface leakage;

(U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75064).

46 40 C.F.R. §98.442.

47 40 C.F.R. §98.444.

48 40 C.F.R. §98.444.

49 U.S. Environmental Protection Agency, Mandatory Greenhouse Gas Reporting Rule: EPA’s Response to Public

Comments; Geologic Sequestration and Injection of Carbon Dioxide: Subparts RR and UU, December 1, 2010, p. 79.

50 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75063.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs



summary of the considerations to be used to calculate site-specific variables in

the mass balance equation;

UIC well number; and

proposed date to begin collecting data for calculating the total amount of CO2

sequestered.51

Once EPA determines that the MRV plan meets all requirements, the agency announces its

approval and issues a final MRV plan.52 Facilities must submit a revised plan to EPA under

certain conditions, such as if they make an unanticipated “material change” to the monitoring and

operating procedures in the MRV plan (e.g., changes in injection volume, addition of injection

wells, equipment failure, or a change in the predicted underground CO2 plume).53 EPA also

requires plan resubmission if the agency determines it is necessary following a review of the

facility’s annual report, or if the UIC class of an injection well at the facility changes.54

UIC Class VI Requirements and Connection with Subpart RR

In the preamble to the GHGRP Subparts RR and UU rule, EPA addressed overlap with UIC

requirements for injection facilities, noting that the agency “designed the reporting requirements

under 40 CFR part 98, subpart RR with careful overlap between the two programs.”55 For

example, both Subpart RR and UIC Class VI regulations require reporting of the quantity of CO2

injected. UIC Class VI regulations require owners and operators to report the quantity of CO2

injected over the annual reporting period and the total volume of CO2 injected over the life of the

injection project.56 Under Subpart RR regulations, facilities must include these data in their

annual report to EPA.57

Both Subpart RR and UIC Class VI regulations also address air monitoring requirements for

geologic sequestration wells. Subpart RR requires facilities to have a monitoring plan for

quantifying air emissions as part of the MRV plan.58 Under UIC Class VI regulations, the UIC

program director can require an air monitoring detection plan covering the surface overlying the

injection field or CO2 plume to detect the movement of CO2 that could endanger a USDW.59

Owners and operators can satisfy the UIC Class VI monitoring requirement by demonstrating

compliance with all Subpart RR requirements and the UIC Class VI regulatory requirement to

report any release of CO2 into the atmosphere within 24 hours.60

51 40 C.F.R. §98.448.

52 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75066.

53 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75066.

54 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75066.

55 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75063.

56 40 C.F.R. §146.91(a).

57 40 C.F.R. §98.442.

58 40 C.F.R. §98.448(3).

59 40 C.F.R. §146.90(h).

60 40 C.F.R. §146.90(h). The reporter must include additional information describing how monitoring will achieve

surface detection and quantification of CO2.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

General MRV plan requirements are linked in the regulations. In the preamble to the GHGRP

Subparts RR and UU rulemaking, EPA explained that UIC permit requirements for Class VI wells

“can provide the basis for the MRV plan submitted to EPA.”61 In other words, the Subpart RR

regulations allow owners and operators to satisfy certain Subpart RR MRV plan requirements

with a UIC Class VI permit.62

Subpart RR Data Reported

Currently, Subpart RR applies to one facility in the United States. This facility, located in Illinois,

is operating with EPA UIC Class VI permits and is injecting CO2 from an ethanol plant into a

saline aquifer. From 2016 through 2019 (the most recent year for which data are available), the

facility reported that a total of 1,551,431 metric tons of CO2 had been sequestered at the site.63 As

of 2020, four other facilities injecting CO2 through UIC Class II wells for EOR, with some CO2

storage, have voluntarily reported under Subpart RR.64 Although it is not required for the facilities

with EOR wells, all five facilities have EPA-approved MRV plans. See Figure 1 for CO2 reported

under Subpart RR since 2016 and Figure 2 for the locations of facilities that have reported under

Subpart RR to date.

Figure 1. CO2 Injected for Sequestration and EOR Reported Under Subpart RR

Source: CRS, from EPA FLIGHT database, accessed November 16, 2020.

Notes: “EOR with Storage” amount is the amount of CO2 incidentally stored during oil production, as reported

to EPA by the facilities. These volumes were reported by four facilities conducting EOR that voluntarily reported

under Subpart RR.

61 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75063.

62 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75063.

63 EPA FLIGHT database, accessed November 16, 2020. For comparison, that facility reported emitting 17,467,428

tons of covered GHGs for that same period.

64 EPA FLIGHT database, accessed November 16, 2020.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Figure 2. Subpart RR Reporting Facilities, 2016-2019

Source: CRS, from EPA FLIGHT database, accessed November 16, 2020.

Note: Alaska and Hawaii are not shown on this map; no Subpart RR facilities are located in these states.

Subpart UU: CO2 Injection (EOR) Facilities

Subpart UU applies to GHG source facilities with a well or wells used to inject CO2 during EOR

operations or for any purpose other than geologic sequestration.65 As noted earlier in this report,

the CO2 can be mined from natural sources or be captured from a power plant or industrial

facility. All EOR wells at Subpart UU facilities are UIC Class II wells.66

Under Subpart UU, there is no minimum threshold for reporting—facilities are required to report

CO2 data if they inject any amount of CO2.67 These facilities are required to report the quantity of

CO2 “received for injection” and its origin, if known.68 The CO2 received includes CO2 streams

from the facility’s own production processes and any CO2 transferred from another facility for

injection.

Subpart UU regulations specify how facilities must calculate the mass of CO2 received for

injection.69 The regulations also require that owners and operators use certain procedures to

measure the CO2 flow rate and follow quality assurance/quality control procedures for

measurement devices, including continuous operation of flow meters.70 Subpart UU facilities

must complete the monitoring plans required under general GHGRP requirements.71 These must

65 40 C.F.R. §98.470.

66 In states with UIC Class II primacy, Class II EOR wells are subject to state regulations and requirements. In other

states, EPA directly administers the Class II programs and associated regulations. Reporting under UIC regulations and

requirements vary by state. Under the GHGRP requirements, all facilities report information directly to EPA.

67 40 C.F.R. §98.471.

68 40 C.F.R. §98.472.

69 40 C.F.R. §98.473.

70 40 C.F.R. §98.474.

71 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases: Injection and Geologic

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

be retained for EPA review, but do not have to be submitted to EPA. In addition to general

GHGRP recordkeeping requirements, Subpart UU facilities are required to keep quarterly records

of the quantity of CO2 received.72 An MRV plan is not required, but facilities may choose to

submit a plan. Unlike Subpart RR, Subpart UU facilities are not required to measure or report the

amount of CO2 injected or sequestered as part of GHGRP reporting.73

Subpart UU facilities report CO2 information at a facility level, which includes the total amount

of CO2 received for injection. The facilities do not report data associated with individual EOR

(UIC Class II) wells—the CO2 received may be injected through one or more wells located within

the facility.

Subpart UU Data Reported

Since 2012 (the first year of required reporting) through 2019, 125 facilities in 15 states have

reported quantities of CO2 received (see Figure 3).74 EPA treats the quantity reported as

confidential business information and does not make this information publicly available.75 Three

of the reporting facilities have received research and development exemptions from Subpart RR

and have reported under Subpart UU.76 Combined, these three facilities reported a total of

1,443,517 tons of CO2 received for injection through 2019.77

Sequestration of Carbon Dioxide; Final Rule,” 75 Federal Register 75060-75089, December 1, 2010, p. 75088.

72 40 C.F.R. §98.477.

73 Facilities typically conduct measurements for their own business purposes. Some CO tracking and reporting is

required by EPA for well owners and operators in states where EPA directly administers the UIC Class II program and

in states granted enforcement authority under SDWA §1422. In other states, reporting requirements may vary,

depending on state UIC regulations and requirements.

74 EPA FLIGHT database, accessed November 16, 2020.

75 In 2012, EPA published a final rule that included CBI determinations for Subpart RR and UU data (U.S.

Environmental Protection Agency, “Final Confidentiality Determinations for Regulations under the Mandatory

Reporting of Greenhouse Gases Rule,” 77 Federal Register 48072-48089, August 13, 2012).

76 EPA FLIGHT database, accessed November 16, 2020.

77 EPA FLIGHT database, accessed November 16, 2020.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Figure 3. Subpart UU Reporting Facilities, 2011-2019

Source: CRS, from EPA FLIGHT database, accessed November 16, 2020.

Note: Alaska and Hawaii are not shown on this map; no Subpart UU facilities are located in these states.

Internal Revenue Code Section 45Q Authorities

Section 45Q of the Internal Revenue Code, enacted as part of the Energy Improvement and

Extension Act of 2008 (P.L. 110-343, Division B), requires facility owners or operators to report

CO2 data in order to claim the federal tax credit for carbon sequestration. Under Section 45Q,

taxpayers can claim the tax credit for the disposal or utilization of CO2 and other carbon oxides,

providing they meet thresholds for the amount of CO2 captured or sequestered and begin

construction before January 1, 2026.78 The tax credit can be claimed for the amount of CO2 (1)

captured from an industrial source and disposed of in an underground geologic formation; (2)

captured from an industrial source and disposed of in underground geologic formations during

EOR operations; or (3) used in a qualified manner determined by Treasury (e.g., utilized as an

input into an industrial or manufacturing process).79 For EOR operations, taxpayers may claim

credit for the initial amount of CO2 injected but cannot claim the credit for CO2 that is recaptured,

recycled, or reinjected during the EOR process.80 For taxable year 2021, Section 45Q provides tax

credits of $34.81 per ton for CO2 that is geologically sequestered and $22.68 per ton for CO2 that

is disposed of during EOR or utilized in a qualified manner.81 These tax credits increase to $50

and $35 per ton, respectively, by 2026.82 See CRS In Focus IF11455, The Tax Credit for Carbon

Sequestration (Section 45Q), by Angela C. Jones and Molly F. Sherlock, for additional

information.

78 26 U.S.C §45Q. Carbon oxide refers to any of the three oxides of carbon: carbon dioxide, carbon monoxide, and

carbon suboxide.

79 26 U.S.C. §45Q(a).

80 26 U.S.C. §45Q(c)(2).

81 26 U.S.C. §45Q. Credit amounts apply to equipment placed in service on February 9, 2018, or later.

82 26 U.S.C. §45Q. Credit amounts apply to equipment placed in service on February 9, 2018, or later.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Section 45Q(f)(2) of P.L. 110-343 required Treasury, in consultation with EPA, the Department of

Energy, and the Department of the Interior, to establish regulations for the secure geological

storage of qualified carbon oxide to prevent release into the atmosphere. Secure geological

storage is required whether the taxpayer is claiming the credit for carbon oxides used as an

injectant and stored during EOR operations, or injected into underground formations solely for

geologic sequestration. As explained in the section below, these regulations establish a direct

connection between Section 45Q and GHGRP requirements.

CO2 Measurement and Reporting Requirements

To claim the Section 45Q tax credit, facilities must measure and report to the Internal Revenue

Service (IRS) the quantity of “qualified carbon oxide” disposed of in underground formations or

utilized.83 Section 45Q(c) defines “qualified carbon oxide” as that which “is measured at the

source of capture and verified at the point of disposal, injection, or utilization.”84 Section 45Q

also provides that, in claims for utilization of qualified carbon oxide, taxpayers are required to use

a lifecycle GHG analysis to determine the amount of CO2 captured or prevented from being

emitted into the atmosphere.85

In January 2021, the IRS promulgated regulations to implement Section 45Q, including

requirements for secure geological storage.86 The requirements in the regulations are generally

consistent with the provisions for demonstrating secure geological storage set out in 2009 IRS

Section 45Q guidance.87 The 2021 Section 45Q rule adds a new Section 1-45Q-3 to 29 C.F.R.

Part 1 to require that to meet the conditions of secure geological storage, geologic sequestration

facilities must comply with GHGRP Subpart RR reporting requirements.88 As explained earlier,

Subpart RR requirements include reporting the mass of CO2 injected (calculated using a mass

balance equation) and having an approved MRV plan. By comparison, for EOR operations,

taxpayers can meet the requirements by either (1) storing carbon oxides in compliance with

Subpart RR requirements or (2) storing carbon oxides in compliance with the EOR standard

adopted by the International Organization for Standardization (ISO) and endorsed by the

American National Standards Institute (CSA/ANSI ISO 27916:19).89 IRS stated in the preamble

to the proposed Section 45Q rule that many stakeholders suggested the option of the CSA/ANSI

ISO standard, which provides specific methodologies and processes for quantifying CO2 stored

during EOR operations.90 For taxpayers claiming amounts of CO2 utilized, the rule adds a new

Section 1-45Q-4 that codifies provisions in previous IRS guidance for measuring the amount of

CO2 utilized using lifecycle GHG emissions analysis.91 While not included in the new regulations,

IRS’s 2009 guidance, which preceded EPA’s establishment of Subpart RR, required that the

83 26 U.S.C. §45Q.

84 26 U.S.C. §45Q(c)(1).

85 26 U.S.C. §45Q(f)(5).

86 Internal Revenue Service, “Credit For Carbon Oxide Sequestration,” 86 Federal Register 4728-4773, January 15,

2021.

87 Internal Revenue Service Notice 2009-83, “Credit for Carbon Dioxide Sequestration Under Section 45Q,” November

2, 2009, §5.02(a).

88 29 C.F.R. Part 1 §1-45Q-3.

89 Internal Revenue Service, “Credit For Carbon Oxide Sequestration,” 86 Federal Register 4728-4773, January 15,

2021, p. 4769.

90 Internal Revenue Service, “Credit For Carbon Oxide Sequestration,” 85 Federal Register 34050-34075, June 2,

2020, p. 34055.

91 29 C.F.R. Part 1 §1-45Q-4.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

amount of CO2 reported for purposes of the Section 45Q tax credit be consistent with the amount

reported under the 2009 Mandatory Reporting Rule.92

The 2021 Section 45Q rule also establishes reporting requirements, requiring the taxpayer to

report the amount of CO2 sequestered on IRS Form 8933 and be submitted with the taxpayer’s

federal income tax return or reported on IRS Form 1065.93

Table 1 compares Section 45Q, GHGRP, and UIC requirements for reporting CO2 injection and

sequestration.

92 Internal Revenue Service Notice 2009-83, “Credit for Carbon Dioxide Sequestration Under Section 45Q,” November

2, 2009, §5.02(a).

93 29 C.F.R. Part 1 §1-45Q-3.

Congressional Research Service

Table 1. Federal CO2 Injection and Sequestration Reporting Requirements

Underground Injection Control

Class II and Class VI

Mandatory Greenhouse Gas

Reporting Subparts RR and UU

(Applies to injection wells under direct

EPA enforcement authority or in states

with Section 1422 primacy for Class II

wells)a

Section 45Q

Federal Statutory Provisions and

Regulations

Clean Air Act Section 114 and other CAA

provisionsb

40 C.F.R. §98 Subparts RR and UU

Safe Drinking Water Act, Subtitle C

40 C.F.R. §§144 and 148

Internal Revenue Code Section 45Q

29 C.F.R. Part 1 §1-45Q-3

CO2 Data Reporting Requirements

EOR (Subpart UU)

Required to report annually:

EOR (Class II)

Required to report annually:

EOR



CRS-16

amount of CO2 received for

injection

Geologic Sequestration (Subpart RR)

Required to report annually:

Geologic Sequestration (Class VI)

Required to report semi-annually:



mass of CO2 received



mass of CO2 injected into the

subsurface



mass of CO2 produced (mixed with

produced oil, gas, or other fluids)



mass of CO2 emitted by surface

leakage



mass of CO2 emitted as equipment

leakage or vented from surface

equipment



mass of CO2 sequestered in

subsurface geologic formations



cumulative mass of CO2 sequestered

since the start of required reporting



monthly CO2 injection volume,

(included in monitoring results)c

monthly volume and/or mass of the

CO2 stream and the cumulative

volume injected over the life of the

project

Initial injection amount of

“qualified carbon oxide” disposed

of in underground formations,

measured at the source of

capture and verified at the point

of disposal, injection, or

utilization

Geologic Sequestration



Amount of “qualified carbon

oxide” disposed of in

underground formations,

measured at the source of

capture and verified at the point

of disposal, injection, or

utilization



Must comply with GHGRP

Subpart RR requirements

Taxpayers seeking tax credit are

required to report annually on IRS

Form 8933 or 1065

CO2 Monitoring Plan for

Quantifying or Detecting

Emissions/Secure Geological

Storage Requirements

EOR (Subpart A general requirements)

Must maintain a written GHG emissions

monitoring plan containing

EOR (Class II)

No monitoring plan required



persons responsible for data

collection



explanation of methods used to

collect data for GHG calculations



description of procedures for

maintaining GHG monitoring

equipment

Geologic Sequestration (Class VI)

UIC program director can require air

monitoring detection at the surface

overlying the injection field or CO2

plume to detect the movement of CO2

that could endanger a USDWd

Monitoring, reporting, and verification

plan is not required to be submitted or

approved by EPA

Geologic Sequestration (Subpart RR)

EPA-approved MRV Plan required that

includes

CRS-17



delineation of the maximum

monitoring and active monitoring

areas



identification of potential CO2

leakage pathways in the maximum

monitoring area and the likelihood,

magnitude, and timing of surface

leakage through these pathways



strategy to detect and quantify CO2

surface leakage



strategy to establish the expected

baselines for monitoring CO2 surface

leakage



summary of the considerations to be

used to calculate site-specific

variables in the mass balance

equation

EOR

Meet secure geological storage

requirements by either

(1) storing carbon oxides in

compliance with Subpart RR

requirements; or

(2) storing carbon oxides in

compliance with EOR standard

CSA/ANSI ISO 27916:19

Geologic Sequestration

To meet secure geological storage

requirements, must comply with

GHGRP Subpart RR requirements

Underground Injection Control

Class II and Class VI

Mandatory Greenhouse Gas

Reporting Subparts RR and UU



UIC well number



proposed date to begin collecting

data for calculating the total amount

of CO2 sequestered

(Applies to injection wells under direct

EPA enforcement authority or in states

with Section 1422 primacy for Class II

wells)a

Section 45Q

Sources: CAA §114; 40 C.F.R. §98 Subparts RR and UU; SDWA Subtitle C; 40 C.F.R. §§144 and 148; Internal Revenue Code §45Q; 29 C.F.R. Part 1 §1-45Q-3.

a. In P.L. 110-161, Congress provided funding for EPA to develop and publish a rule “to require mandatory reporting of greenhouse gas emissions above appropriate

thresholds in all sectors of the economy of the United States.” The accompanying explanatory statement directed EPA to use its existing authority under the Clean

Air Act to develop the rule.

b. 40 C.F.R. §144.28 (for wells authorized by rule; applies to EPA administered UIC programs and in states with §1422 primacy); §144.54; and §146.23 (applies to EPA

administered UIC programs and in states with §1422 primacy). Owners and operators of EOR wells can monitor and report on a field or project basis rather than

for individual wells.

c. EPA UIC Class II regulations require monthly observation of CO2 injection volumes (§144.28).

d. Owners and operators can satisfy the UIC Class VI monitoring requirement by demonstrating compliance with all Subpart RR requirements and the UIC Class VI

regulatory requirement to report any release of CO2 into the atmosphere within 24 hours.

CRS-18

Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Issues for Congress

Many analysts expect CCS to expand in the United States over the next few decades, resulting in

more facilities handling increasing amounts of CO2 for injection and storage.94 According to the

Global CCS Institute, in addition to the 12 commercial CO2 injection and storage projects

currently operating in the United States, 10 new projects are in the advanced development stage.95

Growth in the number and size of geologic sequestration and EOR projects using captured CO2

could increase attention on CO2 reporting issues, including the scope of mandatory data collection

and verification of data reported.

Issues for consideration by Congress related to reporting of CO2 injection and storage include

oversight of EPA’s implementation of GHG reporting regulations under the CAA and oversight of

both Treasury’s verification of Section 45Q tax credit claims and implementation of Section 45Q

regulations. Other issues that may be of oversight or legislative interest may include whether

GHGRP regulations affect the development of commercial-scale CCS projects in the United

States; how generally less-stringent federal requirements for EOR facility reporting may

influence future CCS project deployment; and the implications of potential increases in the

number of GHGRP reporting facilities and Section 45Q tax credit claims on federal agency

capacity and resources.

One issue of potential oversight interest to Congress is verification of Section 45Q tax credit

claims and CO2 sequestration amounts. In recent years, some Members of Congress have raised

concerns regarding potentially fraudulent Section 45Q tax credit claims.96 In 2021, the IRS issued

Section 45Q regulations to address the issue of secure geological storage, among other

requirements. Congress may consider whether the IRS has adequately addressed concerns about

improper claims through its responses to Congress, Section 45Q guidance, and its new

regulations on secure geological storage for purposes of Section 45Q.

Another issue that may be of oversight or legislative interest is whether GHGRP regulations

affect the development of commercial-scale CCS projects in the United States. In its oversight

role, Congress may consider the implications of GHGRP regulatory requirements for overall CCS

project development. Some stakeholders have raised concerns regarding the mandatory

requirements in GHGRP Subpart RR regulations for CO2 injection for geologic sequestration and

their potential impacts on development and deployment of CCS projects in the United States.97 In

their view, monitoring, verification, and reporting of CO2 quantities could be burdensome for the

development of geologic sequestration projects and the utilization of CO2 by industry.98

94 See, for example, Intergovernmental Panel on Climate Change, Carbon Dioxide Capture and Storage, A Special

Report of Working Group III, 2005; and Global CCS Institute, Global Status Report 2020, 2020.

95 Global CCS Institute, Global Status Report 2020, 2020. Four of these projects anticipate injecting CO for geologic

sequestration, while six plan to inject for EOR. The Global CCS Institute defines a commercial facility as a facility

capturing CO2 for permanent storage as part of an ongoing commercial operation that generally has an economic life

similar to the host facility whose CO2 they capture, and that supports a commercial return while operating and/or meets

a regulatory requirement.

96 Letter from Sen. Robert Menendez to Russell George, Treasury Inspector General for Tax Administration, November

19, 2019.

97 See for example, public comments on pp. 77, 87-89, and 137 in U.S. Environmental Protection Agency, Mandatory

Greenhouse Gas Reporting Rule: EPA’s Response to Public Comments; Geologic Sequestration and Injection of

Carbon Dioxide: Subparts RR and UU, December 1, 2010.

98 See, for example, public comments on pp. 77, 87-89, and 137 in U.S. Environmental Protection Agency, Mandatory

Greenhouse Gas Reporting Rule: EPA’s Response to Public Comments; Geologic Sequestration and Injection of

Carbon Dioxide: Subparts RR and UU, December 1, 2010.

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Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

In its oversight role, Congress may consider how generally less-stringent federal requirements for

EOR facility reporting on CO2 injection and storage may influence future CCS project

deployment. Some analysts have noted that federal statutes and regulations, along with economics

and technology innovation, play a role in driving industry decisions of whether to inject CO2 for

EOR projects or for geologic sequestration only. Most CO2 is currently injected for oil production

rather than for geologic sequestration purposes. As Section 45Q tax credits are available for both

types of projects, an oversight issue for Congress is whether different, and generally less

burdensome, federal requirements for CO2 reporting from EOR facilities, in combination with the

tax credit, influence the development of more CO2-EOR projects compared to geologic

sequestration projects.

Another potential issue for Congress in its oversight and appropriations role is the potential

implications of projected increases on agency capacity and resources and the potential need for

enhanced coordination between agencies and programs. EPA, in the preamble to the proposed

Mandatory Subparts RR and UU, notes that “CCS is poised to play a sizable role in mitigating

U.S. GHG emissions” and that many CCS-related technologies currently commercially available

“will be more widely demonstrated over the next 10 to 15 years.”99 In addition, Treasury’s

Section 45Q tax expenditure estimates, published in February 2020, are $0.6 billion over the

2019-2023 five-year period and $2.3 billion from 2020 to 2029, suggesting an increase in tax

credit claims in future years.100 Congress may consider the effects of potential increases in

reporting on EPA and IRS program responsibilities for collecting and verifying GHGRP data and

Section 45Q tax claims.

Author Information

Angela C. Jones

Analyst in Environmental Policy

Disclaimer

This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan

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under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other

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copy or otherwise use copyrighted material.

99 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases; Proposed Rule,” 75 Federal

100 U.S. Department of the Treasury, “FY2020 Tax Expenditures,” accessed September 11, 2020, at

https://home.treasury.gov/policy-issues/tax-policy/tax-expenditures.

Congressional Research Service

R46757 · VERSION 1 · NEW

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