Lucy Smith contributed to this Insight
The road to obtaining Class VI permits for carbon capture and storage (CCS) projects in the U.S. has historically been a rough one, with delays and outright cancellations being common occurrences. That remains the case in 2026, with headlines announcing eight cancellations, and the repeal of Biden-era regulations requiring CCS technology on existing coal and new natural gas-fired power plants. Despite these setbacks, there have been six projects that have been granted Class VI permits in 2026, and CCS remains a cornerstone for many states’ decarbonization initiatives. In this Insight, we spotlight the overall state of Class VI permitting in the United States, focusing in on promising developments in California.
Primacy and CCS Development in the U.S.
Much of the development in CCS projects has so far been concentrated in states that have obtained Class VI permitting primacy, such as Texas, Louisiana, and North Dakota. California is a notable exception, as it still outsources Class VI permitting duties to the Environmental Protection Agency (EPA). California is still building out the regulatory and infrastructure foundation needed to support large-scale CCS projects, but policy changes beginning in 2022 have helped to set the stage for growth and mitigate barriers to project development.
In September 2022, California Governor Gavin Newsom signed a series of bills enacting aggressive climate measures, with the goal to reach carbon neutrality no later than 2045. Of these bills, SB 905 and SB 1314 established a direct regulatory framework for CCS and banned the use of CO2 for enhanced oil recovery. In addition to this framework, the 2022 California Air Resources Board (CARB) Scoping Plan set and evaluated a CO2 removal and capture target of 20 million metric tons (MMT) annually by 2030 and 100 MMT annually by 2045. These policies paved the way for the proposal of many CCS projects in California.
CRC, CTV, and CCS Development in California
The California Resources Corporation (CRC) accounts for 8 of the 14 total Class VI permit applications within the state submitted to the EPA. CRC is one of California’s largest independent oil and natural gas producers and has been at the forefront in adopting carbon management as a core part of its business. In 2022, CRC entered a joint venture with Brookfield Renewables known as Carbon TerraVault (CTV). CTV is working to repurpose existing oil and gas assets and technical expertise to develop large-scale CCS solutions for industrial emitters across the state. Brookfield committed an initial $500 million to invest in CCS projects, accelerating its entry into the market.
In May 2026, CRC announced it had officially begun CO2 injection at its CTV I project site, the first project made possible by this joint venture. The project, located in Kern County, is initially sourcing CO2 from CRC’s Elk Hills Cryogenic Gas Plant for permanent storage in the depleted oil and gas reservoir “26R.” CTV plans to capture emissions from additional sources in the future, which may include the Elk Hills Power Plant, clean ammonia and hydrogen, renewable gasoline, steam generators, and other power plants and industrial sources. The EPA approved Class VI permits for four wells at the project site, and these are expected to inject up to 1.46 MMT of CO2 per year. With a storage capacity of 37 MMT, the project is expected to run for 26 years.
CTV I is a major milestone and an important proof of concept for the future of CCS in California, validating the regulatory pathway and demonstrating that commercial-scale carbon storage can be safely implemented in the state. This first-of-its-kind project has instilled confidence in the potential for long-term project growth and CRC’s ability to effectively contribute to the state’s carbon neutrality goals. The company has already submitted Class VI applications to the EPA for seven additional storage sites, having secured several Carbon Dioxide Management Agreements (CDMAs) and Memorandums of Understanding (MOUs) from major industrial partners. Across all planned projects, CTV is expected to transport and store up to 320.7 MMT of CO2. If projects come online as expected, CRC-owned endeavors could account for up to 80% of California’s 20 MMT carbon removal goal for 2030. The already-proposed projects would make up at least 4% of the state’s 2045 goals, with potential for more contribution if projects start injecting later than expected or as more are announced.
Going forward
CTV’s carbon management plans highlight how California’s new policies affect the evolution of CCS projects, with the establishment of future partnerships reflecting an increasing demand for third-party carbon storage solutions among regional emitters. Seeing the first operational CCS facility in California will help validate the viability of providing these solutions within the state. California can expect to see continued progress from both CRC and other industrial emitters as CCS deployment expands. For more info on how to stay updated on Carbon TerraVault’s projects and other CCS projects in the U.S., check out FactSet’s comprehensive energy coverage, which includes access to the Carbon Capture Projects dataset in the Workstation.
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