CCUS State Update 2026

Nearly halfway through 2026, state regulatory action and litigation continues to drive the legal landscape impacting carbon capture, utilization, and storage (CCUS) development and deployment across the country. Below, we highlight the latest state CCUS developments with significant potential implications for projects across jurisdictions.

California Initiates CCUS Rulemaking Process

On May 7, 2026, the California Air Resources Board (CARB) released “Concepts for Potential Regulations” to implement California’s CCUS regulatory program, authorized by Senate Bill 905. California’s carbon neutrality goals rely on CCUS as a critical leg of the decarbonization stool. S.B. 905, enacted in 2022, provided a skeletal framework for CCUS regulation, but left considerable discretion for CARB to design and develop the program. Among other things, S.B. 905 directed CARB to include a unified permitting application to expedite the issuance of state permits, a process for combining subsurface property interests if at least 75% of owners consent, and financial assurance requirements extending at least 100 years post-injection.

Though far beyond the statutory deadline to promulgate final regulations by January 1, 2025, CARB’s draft regulations and conceptual framework provide stakeholders with their first formal opportunity to comment on CARB’s approach to CCUS regulation. The draft “Concepts” include several provisions likely to be of interest to CCUS project proponents, including:

• Subsurface, ambient, and seismic monitoring requirements, including a mandate to publish all monitoring plans and compliance status on a public webpage
• A 100-year post-injection monitoring period, consistent with California’s requirements for opt-in Low Carbon Fuel Standard eligibility in the CCS Protocol, including a potential process to demonstrate plume stabilization after at least 10-years post-injection to reduce the monitoring period
• Expanded emergency response requirements that go beyond existing Class VI standards
• Financial responsibility requirements
• Standards for agreements to combine subsurface interests, including a 100-year drill-through prohibition
• A voluntary unified permit application to streamline the various state permitting processes necessary for project construction and operation, and facilitate interagency collaboration

CARB’s regulatory approach is likely to have significant impacts on the U.S. CCUS industry, as California boasts the largest amount of federal and private investment in CCUS, and the third-largest number of projects with pending or active Class VI permits. Moreover, California’s regulations could have spillover effects as other state agencies, particularly in western states, may draw from California’s template in drafting their own standards.

Comments on the draft Concepts are due to CARB by June 5, 2026.

North Dakota Courts Strike Down CCUS Statute, Permit

North Dakota courts delivered a pair of losses to CCUS project proponents in recent months. First, in Northwest Landowners Association v. State, a North Dakota District Court set aside the state’s amalgamation statute, which had previously allowed project proponents to combine pore space interests if at least 60% of owners consent. The court explicitly distinguished unitization to maximize resource extraction (such as oil and gas), which is supported by the correlative rights doctrine, from the storage of carbon dioxide on a landowner’s property, which the court determined to be a physical taking. The court further found that the compensation the statute provided to non-consenting owners fell short of the constitutional “just compensation” standard.

Subsequent to the NWLA v. State decision, a separate N.D. court in Swenson Living Trust v. NDIC found that the state’s amalgamation statute was unconstitutional as applied to Summit Carbon Solutions’ Class VI permit, which had relied upon a state amalgamation order to obtain the pore space rights needed to receive an injection permit in North Dakota. Applying similar reasoning to NWLA v. State, the court in Swenson held that the amalgamation order amounted to a physical taking, the correlative rights doctrine was inapplicable, and the compensation provided fell short of the “just compensation” standard. The court therefore reversed the state agency’s orders related to Summit’s permits.

As pore space disputes and jurisprudence continue to develop across the country, NWLA v. State and Swenson Living Trust v. NDIC could have ripple effects in other jurisdictions as some of the first cases to directly address the application of correlative rights in the CCUS context. The state initially indicated its intent to appeal the rulings, though one has not yet been filed.

Class VI Primacy Updates

Primacy continues to be an active area, with nine states and one tribe currently awaiting U.S. Environmental Protection Agency (EPA) approvals to assume regulatory authority over the Class VI permitting program. Most advanced is Colorado, whose primacy application EPA proposed to approve in March. With the 45-day comment period now closed, a final decision from EPA is expected in the near future. Next in the queue is Utah, for which EPA indicates it is in the process of drafting a proposal.

In addition, states that have received primacy in recent years have faced some challenges in implementation. In West Virginia, environmental groups have challenged the state’s primacy grant in West Virginia Surface Owners’ Rights Organization v. Zeldin, (4th Cir., No. 25-1384), arguing that West Virginia’s liability transfer and amalgamation provisions render the state regulations less stringent than the federal program. Challengers also argue that EPA should have more carefully considered West Virginia’s alleged mismanagement and non-compliance of other regulatory programs, including the UIC Class II program for oil and gas-related injection wells, over which the state has had primacy since 1983. EPA’s response emphasized that Petitioners lacked standing, an argument that was recently successful in the Fifth Circuit’s dismissal of challenges to Louisiana’s Class VI primacy approval in Deep South Center for Env. Justice, et al. v. Zeldin (5th Cir. 2025, No. 24-60084). EPA was also supported by West Virginia as intervenor and amicus briefs from industry trade groups and a coalition of nine states. Briefing concluded in April, but oral argument has not yet been scheduled.

Meanwhile, Louisiana remains under a moratorium issued in October 2025 blocking the state agency from considering new Class VI permit applications as it works through the current backlog. Pending applications for 23 projects were transferred from EPA to the state when its primacy became effective in February 2024. Since that date, the queue has grown to 31 projects — the highest of any state by a wide margin — and only two projects have received final permit approval thus far (the first in September 2025, and the second on May 7, 2026).

In neighboring Texas, 18 projects were transferred to the state railroad commission (RRC) when it assumed primacy in December 2025. However, shortly after obtaining primacy, one of three elected RRC commissioners sought to require a commissioner-level vote on Class VI permitting decisions, potentially adding delay to decisions that are currently made by administrative staff. The RRC was involved in EPA’s issuance of the first Class VI permit in the state in October, but has not issued any permits since fully assuming primacy.

Primacy has long been hailed as a pathway to expedite Class VI permit applications that had languished in EPA’s backlog. EPA’s gradual improvement, combined with the issues seen in Texas’ and Louisiana’s rollouts, may raise questions of whether state primacy is necessarily the more efficient pathway.

However, the Texas and Louisiana programs are still very much in their infancy, and the jury is still out. For comparison, over three years elapsed between North Dakota receiving primacy and issuing its first Class VI permit, but it has since progressed to become the swiftest Class VI permitting process in the nation.

*               *               *

For questions or additional information, please reach out to the authors of this Blog or your Arnold & Porter contact. More detailed information on CCUS permitting and state legislation is also available on Arnold & Porter’s state-by-state CCUS Tracker, a collaboration with Columbia Law School’s Sabin Center for Climate Change Law.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.