The decision marks a significant shift for Carbon Capture and Storage (CCS) developers across the state. Until now, companies seeking to build Class VI wells were required to navigate a dual permitting structure with both EPA and the RRC. Primacy consolidates those functions under a single agency, with EPA oversight remaining in place for wells on tribal lands and final concurrence required on each permit decision.
Texas submitted its Class VI program revision in February 2025. EPA’s evaluation, outlined in the pre-publication rule, found that Texas’ regulatory framework, enforcement authority, and technical program met federal requirements under the Safe Drinking Water Act. The RRC’s long history regulating Class II CO₂ injection wells for enhanced oil recovery—numbering more than any other state—was a central factor in that determination.
The RRC expects to issue up to 25 Class VI permits within the first two years of primacy. This could significantly reduce the current backlog of CCS applications, many of which stalled during EPA’s historically long federal review timelines. For developers, faster permits mean timely access to federal 45Q tax credits, which remain a key incentive for large-scale carbon storage projects.
Primacy also opens the door to CCS projects that have been unable to pursue Class VI wells due to delays. To date, most Texas carbon storage activity has occurred through Class II wells tied to oilfield operations, limiting the ability to inject CO₂ from industrial or power-sector sources at higher volumes.
With primacy in place, developers are expected to pursue larger geologic storage hubs capable of accepting CO₂ from refineries, LNG facilities, cement production, and petrochemical complexes along the Gulf Coast. Texas’ existing CO₂ pipeline network—already one of the most extensive in the country—strengthens the state’s competitive position for emerging storage markets.
Project developers will still need a “Letter of Determination” from the Texas Commission on Environmental Quality verifying no conflicts with Class I wells, though EPA notes the requirement should not pose significant obstacles given the remote locations of Texas’ most suitable geologic formations.
EPA received more than 7,500 public comments on the Texas proposal, including concerns from environmental organizations questioning the RRC’s enforcement track record. Similar challenges have been filed in Louisiana and West Virginia following their primacy approvals, though the Fifth Circuit dismissed the Louisiana case earlier this year for lack of standing.
Despite potential legal pushback, financial drivers continue to favor rapid CCS deployment. Federal 45Q incentives remain intact, and proposed federal legislation would extend credit transferability timelines—further improving project economics
