How US States Can Lead on Carbon Removal Policy

As climate change continues to shape the future, carbon removal (CDR) has taken on a central role in the United States’ broader strategy to achieve net-zero emissions by 2050.

While the focus on rapidly reducing emissions remains paramount, CDR serves as a necessary complement to manage residual emissions that other strategies cannot completely eliminate.

The federal government’s recent policy support, highlighted by a $5 billion injection through the Inflation Reduction Act’s Climate Pollution Reduction Grants, signals the rising importance of carbon removal.

States are taking notice, with many recognizing the unique potential they hold to shape climate solutions that align with their specific economic, geographic, and political landscapes.

By developing tailored policies and fostering favorable regulatory environments, states can actively contribute to national climate goals while inspiring collective action.

The Current Carbon Removal Policy Landscape in the U.S.

U.S. states vary significantly in their approach to CDR, and these policies generally fall into three categories: those going beyond net-zero, states focusing on carbon management infrastructure, and states in the early stages of exploring CDR policy.

States Going Beyond Net-Zero

Several states, such as California, Washington, and New York, are already leaders in environmental action, integrating ambitious carbon removal efforts into comprehensive climate strategies.

These states aim not only to scale CDR but to do so responsibly, ensuring that CDR supplements—rather than replaces—emission reductions.

California, for instance, has adopted a dual-target approach, mandating reductions of 85% from 1990 levels by 2045 while setting separate, gradually increasing targets for CDR.

By 2045, California aims to remove 75 million metric tons of carbon, reinforcing the notion that carbon removal should be an addition, not an alternative, to emissions reduction. "This dual-target approach is critical for ensuring that carbon removal complements emissions reductions rather than replacing them," said one of the report's authors.

Other states are considering similar legislation, such as New York’s proposal to make CDR targets binding.

Additionally, California, Oregon, and Washington have pioneered low-carbon fuel standards (LCFS) that promote technologies like direct air capture, providing financial incentives for companies to support these emerging methods.

State Spotlight: California

California, a standout example in CDR policy, has laid the groundwork with legislation such as the California Climate Crisis Act (AB1279), aiming for an 85% emissions reduction by 2045, with CDR addressing the residual emissions.

“California is leading by example,” remarked another expert from the study, “through its dedication to safe and effective carbon management.” Supporting policies, such as SB905, provide regulations on CCS and CDR safety, monitoring, pore space ownership, and liability.

States Developing Carbon Management Infrastructure

States like Texas, Louisiana, Oklahoma, and Wyoming are building out carbon management infrastructure, leveraging their geologic and economic advantages.

These states are home to heavy industries and fossil fuel sectors, prompting a focus on carbon capture, transport, and storage capabilities. Through favorable policies and established infrastructure, they’ve become attractive locations for technological CDR projects.

"Louisiana, for instance, with its CO2 pipeline network and ideal geology, has enacted legislation such as HB492, giving eminent domain to CO2 pipeline developers," one expert noted.

HB516 further strengthens regulations around emergency preparedness and groundwater monitoring, ensuring safe carbon storage.

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State Spotlight: Louisiana

Louisiana’s extensive CO2 pipeline infrastructure and favorable geology make it a significant player in the development of CDR infrastructure.

Legislations like HB492 and HB516 provide a regulatory framework to ensure CO2 pipeline safety and siting.

Other regulations, such as HB169, address liability in case of damage, creating a more predictable environment for project developers.

With technical expertise and existing infrastructure in place, states like Louisiana are positioned to scale direct air capture (DAC) projects.

Notable projects in Oklahoma, Louisiana, and Texas are already setting records in planned capacity, making these states models of carbon management infrastructure.

However, to fully embrace a sustainable future, these states must continue refining policies to ensure carbon-negative outcomes.

Emerging States in Carbon Removal Policy

States like Alabama, Kentucky, and Missouri are only beginning to explore CDR policies, often because their economic structures haven’t traditionally aligned with carbon capture needs.

However, federal incentives have spurred these states into action, particularly through grants and tax credits, encouraging the development of CDR infrastructure.

Alabama, for example, passed HB327, governing geologic CO2 storage and positioning the state for future CDR opportunities. Kentucky and Missouri are similarly starting to include CDR in their Climate Pollution Reduction Grant proposals, with a focus on natural carbon removal projects like reforestation.

Next Steps: States Leading the Way Forward

While progress varies, states can advance their carbon removal goals by adopting measures that foster responsible and effective CDR projects. This includes establishing comprehensive safety standards and community engagement requirements.

States like California and Massachusetts offer models, emphasizing stringent monitoring, long-term storage safety, and community consultation as critical steps toward equitable CDR deployment.

Focus on Safety and Equity

Effective CDR deployment requires comprehensive safety standards that cover all infrastructure and long-term monitoring.

States should pair these safety measures with community engagement requirements to ensure that projects benefit local communities and protect public health.

The EPA’s review process for CO2 storage wells now includes equity considerations, encouraging states to integrate these values into their frameworks.

Massachusetts’ Carbon Dioxide Removal Leadership Act is a prime example, establishing competitive standards-based procurement programs that emphasize social benefits alongside cost-effectiveness.

Cross-State Collaboration for Future Success

Cross-state partnerships can accelerate carbon removal progress by aligning regulations, sharing best practices, and creating cohesive markets.

For instance, the 4 Corners Carbon Coalition, involving multiple states, fosters collaboration on CDR efforts, and California’s MOU with Wyoming to develop DAC demonstrates the potential of regional cooperation.

With the shared goal of achieving net-zero emissions by 2050, states can use these partnerships to streamline approval processes and enhance the scalability of CDR projects.

Moving Toward a Carbon-Negative Future

Despite differing approaches and timelines, U.S. states have the potential to make substantial impacts on carbon removal.

While pioneers like California showcase how states can ambitiously integrate CDR into climate policy, infrastructure-focused states, such as Louisiana, highlight the critical role of industrial infrastructure in CDR development.

By adopting thoughtful regulations and fostering partnerships, states can amplify their impact on carbon removal and contribute to a more sustainable future.