In 2023, the Indiana General Assembly gave the Indiana DNR (“DNR”) rulemaking authority for underground carbon sequestration projects and carbon dioxide transmission pipelines under Indiana Code section 14-39-1, 2. Effective October 2025, the DNR’s framework for permitting processes, operational requirements, and compliance standards for industry participants, as well as protections for neighboring landowners, can be found at 312 IAC 30.

As such, applicants seeking permits to operate carbon sequestration projects in Indiana are now subject to the regulations imposed by 312 IAC 30 and 40 CFR 146, and Indiana’s carbon sequestration projects will be regulated by both codes unless and until Indiana petitions the Environmental Protection Agency (“EPA”) for Class VI well primacy.

To understand the framework, it helps to understand carbon capture sequestration and the benefits that this burgeoning science provides. At a high level, carbon capture sequestration is the process of recapturing carbon dioxide from the atmosphere and permanently sequestering it underground through Class VI wells into naturally conducive geologic formations. These recapture efforts reduce atmospheric carbon dioxide levels, mitigating the effects of climate change. In practice, the atmospheric carbon dioxide is captured directly at the source – primarily industrial complexes and factories – and compressed into a condensed, supercritical state. This supercritical carbon dioxide is then transferred to an injection well and sequestered into specific underground formations for permanent storage.

The new regulations are divided into rules on applicability, definitions, agreements between an applicant for a carbon sequestration project permit and a pore space owner, preapplication coordination, carbon dioxide transmission pipelines, carbon sequestration project permits, ongoing responsibilities of storage operators, and records. We highlight a few of these rules below.

Carbon Dioxide Transmission Pipelines

            Applicants seeking carbon sequestration project permits in Indiana are not required to obtain a carbon dioxide transmission pipeline certificate of authority under certain circumstances. 312 IAC 30-5-1. Specifically, applicants need not seek a carbon dioxide transmission pipeline certificate of authority so long as the injection well is: (1) on land owned by the applicant; and (2) inside the boundaries of contiguous property owned by the applicant; such that the applicant is only transporting carbon dioxide on property the applicant has a proper ownership interest in. Id. If, however, the applicant’s proposed injection well is not situated on land owned by the applicant, the applicant must obtain a carbon dioxide transmission pipeline certificate of authority in accordance with 312 IAC 30-5-2 and Indiana Code section 14-39-1-4.

            Not just any applicant is granted such a certificate of authority, however. The DNR requires proof of financial ability to construct, operate, and maintain the carbon dioxide transmission pipeline, including minimum liability insurance requirements. 312 IAC 30-5-3. Proof of insurance is required to be updated on an annual basis. 312 IAC 30-7-1. Beyond financial ability, the applicant must also show the DNR that it also has the managerial and technical ability to construct, operate, and maintain a carbon dioxide transmission pipeline. 312 IAC 30-5-4. Minimum years of experience requirements for the construction, operation, and maintenance of pipelines are also imposed. Id. Finally, applicants for carbon dioxide transmission pipeline certificates of authority are required to submit at least one map to the DNR depicting the pipeline, identification of property owners in the vicinity of the proposed pipeline, and proposed easement pipeline parameters. 312 IAC 30-5-7.

            After submission of the carbon dioxide transmission pipeline certificate of authority application, the DNR has 60 days to review the application to evaluate completeness. 312 IAC 30-5-8. If the DNR determines an application is incomplete or inaccurate, the application is returned to the applicant advising that the applicant is entitled to file a corrected application. If the DNR determines the application is complete and accurate, the DNR shall notify the applicant of its completeness and advise the applicant of the date, time, and location of the public information meeting to be held in accordance with Indiana Code section 14-39-1-4. 312 IAC 30-5-8(a). Such meeting must be held within 120 days after determining the completeness and accuracy of an application. If the DNR fails to act on an application not later than 90 days after a public information meeting, the application is considered approved by the DNR. 312 IAC 30-5-8(b).

            The certificate of authority issued by the DNR is not absolute. While minor modifications or amendments to the certificate of authority without filing an application to amend permit are permitted, any changes not specifically identified in 312 IAC 30-5-10(b) require the permitholder to file an application to amend the certificate of authority. Certificates of authority can also be suspended or revoked by the DNR under certain circumstances, and there are limitations upon whom a certificate of authority may be transferred, given the stringent nature of the application process. 312 IAC 30-5-11, 12.

Carbon Sequestration Project Permits

            Similar to transmission pipeline permits, stringent requirements are imposed upon applicants seeking a project permit. The application process, however, closely mirrors the application process for the ERA Class VI well permit, including a demonstration of financial responsibility, managerial and technical ability to construct, operate, and maintain a carbon sequestration project, and the requisite expertise to construct, operate, and maintain a carbon sequestration project. 312 IAC 30-6-1(a)(1). In addition, applicants must submit information as to the storage facility, proposed monitoring wells and injection wells, the quantity and quality of carbon dioxide to be injected and stored in the storage facility, the character and fitness of the applicant, and whether the application is an initial application or a request to amend. 312 IAC 30-6-1(a)(2)–(8).

            The DNR has 90 days to review an application following submission to determine whether the application is complete and accurate. 312 IAC 30-6-2(a). Compared to the pipeline certificate of authority, more stringent timing requirements are imposed upon the DNR for informing applicants of deficiencies in their application and more stringent timing requirements for applicants to remedy such deficiencies. 312 IAC 30-6-2(b). For example, if the DNR determines an application has deficiencies, the DNR has five business days to inform the applicant. Id. Project permit applications can be denied by the DNR if: (1) the general assembly or federal government enacts legislation that requires denial of an application; (2) the applicant failed to submit a complete application for a project permit for at least one year following the initial application; (3) the DNR has concerns about the applicant’s character and fitness; or (4) the applicant fails to satisfy the financial, managerial, and technical requirements imposed by 312 IAC 30-5-3 through 5. See 312 IAC 30-6-2(c). A determination on an application is subject to review and appeal pursuant to Indiana Code section 4-21.5. 312 IAC 6-2-2(d).

            Issuance of the project permit, however, is not the end of the road. 312 IAC 30-6-3 sets forth a multitude of reasons why the DNR may suspend, or even revoke, a project permit. The list of potential reasons is expansive, so it is important to understand the nuances of each of the enumerated grounds. If an applicant is found to be in violation of their permit, 312 IAC 30-6-3 also sets forth the due process considerations for the applicant and the procedural requirements that the applicant is required to adhere to. Should the DNR determine that a project permit be suspended or revoked, the storage operator must immediately cease carbon sequestration operations. Again, such determinations are subject to review and appeal pursuant to the Indiana Administrative Orders and Procedures Act, Ind. Code § 4-21.5. 312 IAC 30-6-3(f).

            Should the permitholder desire to transfer its project permit to a transferee, the permitholder may apply for a project permit transfer with the DNR. 312 IAC 30-6-5(a). The transferee, however, must at least meet the underlying qualifications as the permitholder. Id. The transferee must also submit documentation substantially similar to that originally submitted at the outset of the permit application, demonstrating competency and capability to assume the position of the original policyholder. 312 IAC 30-6-5(c). If the DNR determines the application for permit transfer is complete, the transferee is obligated to notify the public, owners of adjacent real estate, owners that may be affected by the project, and owners of the adjacent real estate that may be affected by nearby road construction work of the transfer. 312 IAC 30-6-5(d). The DNR then has 90 days to approve or deny the transfer, and has enumerated specific instances where it must deny the transfer. 312 IAC 30-6-5(e). Permit transfers are effective upon DNR written approval, and determinations are against subject to review and appeal under Indiana Code section 4-21.5. 312 IAC 30-6-5(i), (j).

Ongoing Responsibilities of Storage Operators

            In an effort to ensure financial responsibility, the DNR requires storage operators to provide ongoing proof of financial responsibility on an annual basis. 312 IAC 30-7-1. Failure to maintain proof of financial responsibility as required by the project permit will render the project permit invalid. Id. If a project permit is considered invalid, the storage operator may not engage in carbon sequestration work until full compliance and the DNR considers the permit valid once again. Id. Storage operators must also file annual reports with the DNR, including information with respect to changes in the carbon dioxide, sequestration metrics, events requiring shutoff or remediation, monitoring results from the EPA, mechanical testing results, and a summary of instances of noncompliance with the Class VI permit. 312 IAC 30-7-2. Additionally, more stringent time requirements are imposed for notice of certain instances of noncompliance with the Class VI permit, as well as proposed alterations to the storage facility. 312 IAC 30-7-3, 4.

            Ultimately, if you are seeking or being asked to be part of a carbon dioxide transmission pipeline permit or a carbon sequestration project permit in Indiana, it is imperative to be well informed when navigating Indiana’s new statutory framework. While 312 IAC 30 sets forth a comprehensive roadmap for dealings with the EPA, it does not address other environmental or real estate related concerns with respect to the contemplated carbon sequestration project. Make calling an attorney at Plews Shadley Racher & Braun part of your carbon capture sequestration game plan!

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Tagged In: carbon capture, carbon dioxide, DNR, Environmental Law, EPA, Indiana, pipeline, Real Estate