States Battle for CCS Leadership Role

A quiet but powerful competition is unfolding across the United States as states race to control carbon capture and storage permitting. What was once exclusive federal territory is shifting to state hands, and the economic stakes are massive. The winners could emerge as North America's carbon storage capitals, attracting billions in investment and thousands of jobs.

The prize is Class VI primacy, the authority to permit and regulate wells that inject carbon dioxide deep underground for permanent storage. States with this power can move projects forward in months rather than years. For energy-producing states with the right geology, workforce, and infrastructure, primacy offers a path to lead the emerging $77 billion carbon capture industry.

The Current Leaders

Four states have crossed the finish line. North Dakota led in 2018, followed by Wyoming in 2020, Louisiana in 2024, and West Virginia in early 2025. These pioneers are seeing tangible results.

North Dakota has issued eight Class VI permits since gaining primacy. By comparison, the EPA issued just eight permits nationwide since the Class VI program began in 2010. The efficiency gap shows why states are pursuing this authority.

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Texas Makes Its Move

Texas exemplifies the stakes of this competition. After over two years since submitting its application, the Lone Star State is nearing approval. On June 9, 2025, EPA proposed granting Texas full authority over Class VI wells, positioning it to become the fifth state with primacy.

The numbers tell the story. Texas holds 56 of the 165 Class VI applications in EPA's queue. Business leaders mobilized, with 33 organizations urging EPA to expedite approval. The economic projections are compelling: 7,500 full-time jobs, $1.8 billion in infrastructure investment, and potential for Houston alone to capture 50 million metric tons of CO2 by 2030.

The Texas Railroad Commission will take over pending applications once primacy is granted. With decades regulating Class II wells for enhanced oil recovery, the Commission brings institutional expertise. The RRC already oversees five other injection well classes, demonstrating technical capacity for carbon storage oversight.

Arizona and the Next Wave

Arizona follows close behind. EPA proposed granting Arizona primacy over all UIC well classes, including Class VI, in May 2025. After a public comment period ending July 3, Arizona could join the primacy club. The state represents a different model, proving CCS leadership isn't limited to traditional energy states.

Behind Arizona, nine more states work through applications. Alaska, Alabama, Colorado, Mississippi, Nebraska, Oklahoma, Texas (awaiting final approval), and Utah see opportunity in bridging industrial heritage with climate solutions. Each state recognizes that federal policy only works if projects can get permitted.

Industry Support

The Carbon Capture Coalition, representing over 100 companies, unions, and environmental organizations, actively supports state primacy. The coalition sees efficient permitting as critical to scaling carbon management technologies economy-wide.

What Primacy Means

Gaining primacy requires meeting or exceeding federal requirements. States must prove their regulations match EPA standards before receiving approval. They demonstrate institutional capacity, technical expertise, financial resources, and community engagement plans. The process typically takes years and requires extensive documentation.

Once approved, states assume full responsibility for permitting, monitoring, enforcement, and long-term stewardship. They inspect facilities, ensure permit compliance, and protect underground drinking water sources. EPA maintains oversight but steps back from daily administration.

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The Federal Context

State primacy works alongside broader federal policy. The enhanced Section 45Q tax credit provides up to $85 per ton for CO2 stored in saline formations. The Infrastructure Investment and Jobs Act and Inflation Reduction Act together provide over $10 billion for CCS research, development, and demonstration. But incentives only work if projects get permitted.

The push for primacy reflects frustration with federal timelines. EPA's process has been thorough but slow, with some permits taking six years. Regional EPA offices, stretched across multiple programs, lack specialized expertise for surging Class VI applications. States argue they can deliver better results with existing staff, geological knowledge, and industrial relationships.

The Road Ahead

The race for Class VI primacy enters a new phase. With Texas and Arizona nearing approval, and nine more states working through applications, the model shifts from federal administration to state leadership. This transition could unlock project pipelines that have built for years.

For states on the sidelines, the message is clear: act fast or watch competitors capture economic benefits. For project developers like ExxonMobil and Calpine, the primacy landscape reshapes where and how they plan facilities. For the carbon management industry, state primacy represents a crucial step toward achieving scale needed for real climate impact.

States winning this race won't just gain regulatory authority. They'll position themselves as hubs of a multi-billion dollar industry bridging America's industrial heritage with its clean energy future. The race has only begun.