Hoeven: Red Trail CCS Project First in the U.S. to Operate Under State-Led Carbon Storage Regulations

Hoeven Worked as Governor to Create Regulatory Framework, Secured Approval from EPA & Expanded 45Q Tax Credit as U.S. Senator

WASHINGTON – Senator John Hoeven today issued the following statement after Red Trail Energy announced that the carbon capture and storage project at its ethanol facility near Richardton, North Dakota is now officially operating. The project is the first of its kind in the U.S. to operate under state-led regulatory authority for carbon storage, an effort which Hoeven began nearly 15 years ago. Specifically, Hoeven worked: 

  • As governor, to create a regulatory framework for carbon storage when:
    • He established the North Dakota COStorage Workgroup in 2008.
    • He advanced a bill through the legislature to grant this authority to the North Dakota Industrial Commission.
    • The state enacted legislation that granted ownership of the pore space to the owner of the overlying surface estate.
  • As U.S. Senator, to secure approval of the state’s application for regulatory primacy over the use of Class VI wells for geologic storage of CO2.
    • North Dakota is one of only two states to have this regulatory authority.

At the same time, Red Trail is advancing the project utilizing the 45Q tax credit, which provides a critical revenue stream for new carbon capture, utilization and storage (CCUS) projects. Hoeven worked to pass legislation to reform and expand the 45Q tax credit, and secured final 45Q regulations in January 2021. The tax credit provides up to $50 per ton of CO2 stored, helping make the project financially viable.   

“Red Trail Energy’s carbon capture and storage project is now online, marking a major milestone for the implementation of CCUS in North Dakota,” said Hoeven. “This is a tremendous example of how our state continues to pave the way for this critical energy technology, starting with the regulatory framework that we put in place nearly 15 years ago. CCUS benefits both renewable and traditional energy, empowering our nation to continue utilizing all of its abundant energy resources while reducing emissions. That’s the right path forward for our nation, helping us to both fight inflation and ensure Americans have access to affordable and reliable energy.”

Moving forward, Hoeven is prioritizing: 

  • Front end investment in technology development, including bolstering the Department of Energy (DOE)-Energy & Environmental Research Center (EERC) partnership in support of efforts like Project Tundra.
  • Loan guarantees from DOE and the U.S. Department of Agriculture (USDA), which will help project developers secure financing to build the equipment and infrastructure needed to capture and store CO2.
  • Enhancements for the 45Q and 48A Advanced Coal tax credits to provide important revenue streams to project developers and encourage adoption of CCUS. This includes:
    • Sponsoring legislation to modernize the 48A tax credit for COcapture retrofit projects.
    • Helping introduce a bipartisan bill to provide a direct payment option for the 45Q and 48A CCUS tax incentives.