The Illinois SAFE CCS Act provides a regulatory foundation for Carbon Capture and Sequestration Projects

Newsletter

On July 18, 2024, Governor J.B. Pritzker signed SB 1289, known as the Safety and Aid for the Environment in Carbon Capture and Sequestration Act (SAFE CCS Act) which establishes a regulatory framework for carbon capture, utilization and storage (CCS) projects in Illinois.

The most significant near-term impact of the SAFE CCS Act is a pause on carbon dioxide pipeline construction in Illinois. The SAFE CCS Act prevents the Illinois Commerce Commission (“ICC”) from issuing a certificate of service authority to construct a carbon dioxide pipeline until the earlier of the date that the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) revises its pipeline rules for safe carbon dioxide transportation through pipelines or July 1, 2026.

The CCS process is complex. The first step in the process is capturing and purifying a steam of carbon dioxide from a fuel combustion or manufacturing process. That purified stream of carbon dioxide is then transmitted through a pipeline to a CCS facility. At the CCS facility, it is injected through a permitted underground injection well into an empty space underground between soil or rock formations, known as the pore space. The sequestered carbon dioxide is contained in the pore space.    

The SAFE CCS Act regulates all segments of the CCS process. Below are the key takeaways from the SAFE CCS Act that affect carbon dioxide generation facilities, CCS project operators, landowners, and pore space owners.

Key Takeaways


1. Pore Space Rights Are Tied to the Surface Estate.

The Act provides that pore space rights are tied to the surface estate and cannot be severed. However, the property owner can grant pore space rights to another party for carbon sequestration by easement or lease while retaining their rights to the surface estate. The grant of a right for a CCS project operator to use the surface property must be expressly given in an easement or lease for use of the pore space. If the holder of an easement or lease withdraws or cannot acquire a permit for sequestration under the Illinois Environmental Protection Act, the surface owner has the right to require that the pore space rights be united with the surface estate in exchange for returning any amounts received from the holder of the easement or lease.

2. Pore Space Owners Can Unite Their Interest.

When multiple pore space owners are situated within a proposed CCS project, they have the option to combine their interests to develop the pore space as a CCS facility. In cases where an agreement cannot be reached with all pore space owners within a project area, the CCS operator has the right to petition the Illinois Department of Natural Resources (IDNR) to integrate the interests of the pore space owners. Before this request is made, the CCS operator must secure the rights from the pore space owners who own the underlying pore space of at least 75% of the surface area above the proposed CCS project.  

If the CCS project operator is unable to locate the pore space owners, they must provide public notice in the county of the proposed CCS project. Following this, the operator must file proof of such notice with the IDNR along with their petition. The lengthy application process includes public hearings.

3. Environmental permits will be required for facilities that are capturing carbon dioxide and for CCS project operators, who will also be subject to mandatory post-injection monitoring and site closure.

Facilities that intend to capture carbon dioxide for sequestration must obtain an air construction permit from the Illinois Environmental Protection Agency (IEPA). The construction permit application must address compliance with air emission requirements and include a water impact assessment report, which must also be submitted to the IDNR and the Soil and Water Conservation District for the county in which the project will be constructed. 

The CCS owner/operator is also required to obtain a permit from the IEPA. The application requirements are very detailed and include: (1) an analysis of air and soil background conditions at properties potentially impacted by a release from the proposed carbon dioxide sequestration facility; (2) air and soil monitoring plans; (3) a water impact assessment report; (4) an emergency response plan designed to respond to and minimize immediate threats posed by a release of carbon dioxide from the sequestration facility; (5) a remedial action plan designed to address air and soil impacts from a carbon dioxide release; and (6) a closure plan that includes post-injection site care. CCS owners/operators are also required to provide IEPA with financial assurance and proof of insurance. 

Once the injection of carbon dioxide for a project is complete, CCS owners/operators must continue to monitor the site for a period of no less than 30 years after the last date of injection unless and until the IEPA certifies that the carbon sequestration facility is closed.

CCS owners/operators will also need to obtain certification of closure from the United States Environmental Protection Agency (US EPA) of its Class VI injection well site to ensure the carbon dioxide injection does not endanger groundwater. To obtain certification of closure from the IEPA, the CCS operator or owner must submit a copy of a closure certification obtained from the US EPA in accordance with 40 CFR § 146.93, and the CCS owner/operator must demonstrate no additional air or soil gas monitoring is needed to ensure the CCS project does not pose an endangerment to groundwater, human health, or the environment. The latter requirement must include location-specific monitoring data.

Receipt of a certification of closure from IEPA does not relieve the operator of any liabilities from the carbon sequestration activity or facility. 

4. Additional limitations may be imposed on CCS projects.

In September 2024, Illinois State Representatives Carol Ammons and Ann Williams filed HB 5874. which sought to amend the Illinois Environmental Protection Act so that no person shall conduct carbon sequestration at a facility that "overlies, underlies, or passes through a sole source aquifer." This bill, which was spurred on by a leak in ADM’s Decatur carbon dioxide sequestration plant this summer, was not enacted by the previous legislature. However, in January 2025, the Champaign County Board enacted a 12-month moratorium on carbon sequestration activities near the Mahomet Aquifer. See Champaign County Zoning Ordinance No. 2025-1.

The regulatory burden of constructing and operating a carbon sequestration facility in Illinois may increase before carbon dioxide pipelines are allowed to be constructed in Illinois.

5. The Illinois Commerce Commission’s approval will be necessary for the construction of carbon dioxide pipelines.

Applicants seeking to construct and operate carbon dioxide pipelines must obtain a certificate of service authority from the ICC through a complex and likely lengthy application process. The application process is extensive and multi-faceted because it includes requirements for the applicant to obtain requisite permits from state and federal entities, hold public meetings, and file safety plans in accordance with rules set out by the Illinois Emergency Management Agency and Illinois Office of Homeland Security. The applicant must also show that the proposed pipeline “is consistent with the public interest, public benefit, and legislative purpose” as set forth in the SAFE CCS Act.

Beyond the application requirements, the ICC’s application process may also be complicated by possible intervenors in an ICC proceeding. Environmental groups will likely intervene in future carbon capture proceedings and ask the Commission to closely examine the environmental impact of any proposed carbon dioxide pipeline. ICC Docket 19-0673, which was an application to install additional pumping stations and pumping facilities on existing oil pipelines in Illinois, is an example of how effective an environmental group’s litigation can be in extending the duration of an ICC proceeding.

Next Steps

There is significant uncertainty ahead for how prospective CCS project developers will navigate the SAFE CCS Act. Although pore space rights and unitization of pore space is an established concept in the oil sector, those rights and the acquisition of pore space have rarely been applied to long-term carbon sequestration, especially in Illinois. In addition, while the SAFE CCS Act sets out a comprehensive regulatory framework that encompasses multiple state and federal agencies, the various Illinois agencies involved in the SAFE CCS Act implementation will need to promulgate new rules and processes for CCS project applicants. CCS project developers will need to move quickly in the two years before the ICC is able to authorize the construction of carbon sequestration pipelines because Illinois agencies will expect the federal permits and authorizations to be complete for application purposes.

If you have any questions concerning the SAFE CCS Act and how it may impact you, please contact your Quarles & Brady attorney or:

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