02.19.21

Hoeven: Summit Carbon Solutions, Green Plains to Build Carbon Capture Pipeline Network for CO2 Storage in North Dakota

Multi-billion Project Made Possible Due to North Dakota’s Leadership in Developing the Right Legal, Tax and Regulatory Environment for CCUS

BISMARCK, N.D. – Senator John Hoeven issued the following statement after Summit Carbon Slutions, a subsidiary of Summit Agricultural Group, announced that it would develop a pipeline network in partnership with Green Plains to capture and transport CO2 from its ethanol production facilities in Iowa to North Dakota for geologic storage. The system is projected to have capacity for 10 million tons of CO2 storage per year from up to 40 ethanol plants. Construction is scheduled to begin in 2023, following feasibility and permitting phases, and will support approximately 10,000 jobs.

Hoeven stressed that the project is made possible due to efforts at both the state and federal level to develop the right legal, tax and regulatory environment for carbon capture, utilization and storage (CCUS) technologies. This includes:

  • Securing Environmental Protection Agency (EPA) approval for North Dakota to be the primary regulator over Class VI wells, which are used for geologic or long-term CO2 storage, the first such approval in the nation.
  • Implementing and enhancing the 45Q tax credit, one of the most important incentives to make CCUS projects commercially-viable.

“For more than a decade, North Dakota has been setting the stage for CCUS efforts like Summit Carbon Solutions and Green Plains’ new pipeline network,” said Senator Hoeven. “Major investments like this don’t just happen – it took the right legal framework, as well as regulatory and tax certainty. It started with our state’s CO2 storage task force in 2008, up through our recent work on the 45Q tax credit. That’s how we’ve been leading the way on CCUS, a true path forward for developing all of our nation’s energy resources, supporting both our economic and national security, while improving environmental stewardship.” 

“We are excited to work with the state of North Dakota on this monumental new project,” said Bruce Rastetter, CEO of Summit Agricultural Group. “Not only are the geologic aspects of the state ideal for sequestering carbon, but the regulatory environment for expediting this type of project is welcoming. As Governor over a decade ago, Senator Hoeven laid the groundwork for sequestration of CO2, and has continued this critical work in the Senate by supporting the all-important 45Q tax credits and other CCUS-friendly policies.”

Securing State Primacy over Class VI Wells

Hoeven has worked since his time as governor to the secure the state’s role as the primary regulator of Class VI wells, which provides greater certainty to CCUS project developers. His efforts include:

  • Establishing the North Dakota CO2 Storage Workgroup in 2008, during his time as governor.
  • Helping advance a bill through the state legislature to create a regulatory framework for carbon sequestration under the North Dakota Industrial Commission.
  • As U.S. Senator, moving the state’s application for regulatory primacy forward at the EPA and successfully pressing for its approval.

Enhancing the 45Q Tax Credit 

Hoeven recently helped secure the final 45Q regulations, having worked closely with the Trump administration to move the final regulations forward. Specifically, the rule includes a more flexible definition of Carbon Capture Equipment (CCE), providing broader eligibility for the tax credit. In addition, the rule includes a provision similar to Hoeven’sCO2 Regulatory Certainty Act, ensuring that the tax credit works both for long-term storage and enhanced oil recovery. The senator also helped pass legislation providing a two-year extension on the construction deadline for the 45Q tax credit, helping incentivize the development of more CCUS projects.

Moving forward, Hoeven is prioritizing enhancements to make the 45Q tax credit more accessible and better incentivize the development of CCUS projects. This includes bipartisan legislation he helped introduce in the 116th Congress to: 

  • Provide a direct payment option for the 45Q and 48A tax incentives.
  • Further extend the 45Q commence construction deadline through January 1, 2029.
  • Allow the 45Q credit to offset tax obligations arising from the Base Erosion Avoidance Tax (BEAT), consistent with BEAT exceptions made for wind and solar energy production under the 2017 Tax Cuts and Jobs Act.

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