Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Reporting Carbon Dioxide Injection and Storage: Federal Authorities and Programs

Reporting Carbon Dioxide Injection and
April 13, 2021
Storage: Federal Authorities and Programs
Angela C. Jones
Carbon capture and storage (CCS) of carbon dioxide (CO2) emissions is a suite of processes and
Analyst in Environmental
technologies viewed by some stakeholders as essential for mitigating anthropogenic CO2
Policy
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.
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 CO2, 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, CO2 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 CO2 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 CO2 injected for sequestration to the UIC program authority,
either EPA or a state. EPA has not established comparable UIC CO2 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 CO2 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 CO2 disposed in
underground formations, measured at the source of capture. For CO2 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 CO2 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.
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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

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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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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
Register 56259-56519, October 30, 2009, p. 56264.
11 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases; Final Rule,” 74 Federal
Register 56259-56519, October 30, 2009, p. 56350; and U.S. Environmental Protection Agency, “Mandatory Reporting
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
Register 56259-56519, October 30, 2009. For a few source categories, such as motor vehicle manufacturers and engine
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
Register 56259-56519, October 30, 2009, p. 56350.
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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
Register 56259-56519, October 30, 2009. CO2e is the number of metric tons of CO2 emissions with the same global
warming potential (GWP) as one metric ton of another GHG per year. To calculate the tons of CO2e 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 CO2e 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 CO2
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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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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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 CO2 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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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 CO2 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 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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 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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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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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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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 CO2 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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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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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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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.
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Table 1. Federal CO2 Injection and Sequestration Reporting Requirements
Underground Injection Control
Class II and Class VI
(Applies to injection wells under direct
EPA enforcement authority or in states
Mandatory Greenhouse Gas
with Section 1422 primacy for Class II

Reporting Subparts RR and UU
wells)a
Section 45Q
Federal Statutory Provisions and
Clean Air Act Section 114 and other CAA Safe Drinking Water Act, Subtitle C
Internal Revenue Code Section 45Q
Regulations
provisionsb
40 C.F.R. §§144 and 148
29 C.F.R. Part 1 §1-45Q-3
40 C.F.R. §98 Subparts RR and UU
CO2 Data Reporting Requirements
EOR (Subpart UU)
EOR (Class II)
EOR
Required to report annually:
Required to report annually:

Initial injection amount of

amount of CO
“qualified carbon oxide”
2 received for

monthly CO2 injection volume,
disposed
injection
(included in monitoring results)c
of in underground formations,
measured at the source of

capture and verified at the point
Geologic Sequestration (Subpart RR)
Geologic Sequestration (Class VI)
of disposal, injection, or
Required to report annually:
Required to report semi-annually:
utilization

mass of CO

2 received

monthly volume and/or mass of the

CO

mass of CO
2 stream and the cumulative
Geologic Sequestration
2 injected into the
subsurface
volume injected over the life of the

project

Amount of “qualified carbon

mass of CO
oxide”
2 produced (mixed with
disposed of in
produced oil, gas, or other fluids)
underground formations,
measured at the source of

mass of CO2 emitted by surface
capture and verified at the point
leakage
of disposal, injection, or

mass of CO2 emitted as equipment
utilization
leakage or vented from surface

Must comply with GHGRP
equipment
Subpart RR requirements

mass of CO2 sequestered in

subsurface geologic formations
Taxpayers seeking tax credit are

cumulative mass of CO2 sequestered
required to report annually on IRS
since the start of required reporting
Form 8933 or 1065
CRS-16

CO2 Monitoring Plan for
EOR (Subpart A general requirements)
EOR (Class II)
EOR
Quantifying or Detecting
Must maintain a written GHG emissions
No monitoring plan required
Meet secure geological storage
Emissions/Secure Geological
monitoring plan containing
requirements by either
Storage Requirements


persons responsible for data
Geologic Sequestration (Class VI)
(1) storing carbon oxides in
col ection
compliance with Subpart RR
UIC program director can require air

requirements; or

explanation of methods used to
monitoring detection at the surface
col ect data for GHG calculations
overlying the injection field or CO
(2) storing carbon oxides
2
in

compliance with EOR standard

description of procedures for
plume to detect the movement of CO2
maintaining GHG monitoring
that could endanger a USDWd
CSA/ANSI ISO 27916:19
equipment

Geologic Sequestration
Monitoring, reporting, and verification
To meet secure geological storage
plan is not required to be submitted or
requirements, must comply with
approved by EPA
GHGRP Subpart RR requirements

Geologic Sequestration (Subpart RR)
EPA-approved MRV Plan required that
includes

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
CRS-17

Underground Injection Control
Class II and Class VI
(Applies to injection wells under direct
EPA enforcement authority or in states
Mandatory Greenhouse Gas
with Section 1422 primacy for Class II

Reporting Subparts RR and UU
wells)a
Section 45Q

UIC well number

proposed date to begin col ecting
data for calculating the total amount
of CO2 sequestered
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.

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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 CO2 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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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

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99 U.S. Environmental Protection Agency, “Mandatory Reporting of Greenhouse Gases; Proposed Rule,” 75 Federal
Register 18578-18606, April 12, 2010, pp. 18578-18579.
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
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