1. (a) Eligibility. The following entities are eligible to submit applications and, if approved, receive credits associated with net GHG reductions from CCS projects, in accordance with following protocol which is incorporated herein by reference and is referred to as the “CCS Protocol” hereafter.

   1. (1) Alternative fuel producers, petroleum refineries, and oil producers that capture CO₂ on-site, including at the location of the production of hydrogen used as an intermediate input, and geologically sequester CO₂ either on-site or off-site.

   2. (2) An entity that employs direct air capture to remove CO₂ from the atmosphere using chemical and/or physical separation and geologically sequester the CO₂

      1. (A) Direct air capture and sequestration projects must be physically located in the United States.
      2. (B) If CO₂ derived from direct air capture is converted to fuels, it is not eligible for project-based CCS credits. However, applicants may apply for fuel pathway certification using the Tier 2 pathway application process as described in section 95488.7.

   Industrial Strategies Division, California Air Resources Board. August 13, 2018. Carbon Capture and Sequestration Protocol under the Low Carbon Fuel Standard.

2. (b) General Requirements.

   1. (1) Projects and fuel pathways claiming CCS credits must comply with the CCS Protocol. To be considered in compliance with the CCS protocol, a project must be issued executive orders and meet all the requirements throughout the project life in accordance with the permanence requirements of the CCS protocol.
   2. (2) Credit determination for any project that utilizes CCS must be performed in accordance with the accounting requirements of the CCS protocol.
   3. (3) Except for direct air capture and sequestration projects, credits must be prorated based on the volumes delivered to California.
   4. (4) CCS credits generated by crude oil producers must be claimed under the Innovative Crude Provision (section 95489(c)).
   5. (5) CCS credits by refiners must be claimed under the Refinery Investment Credit Program (section 95489(e)).
   6. (6) A Tier 2 pathway application must be submitted pursuant to section 95488.7 to capture the GHG reduction benefit of CCS associated with alternative fuel producers. The GHG reduction benefit of CCS is reflected in the CI score of the Tier 2 fuel pathway.
   7. (7) Projects utilizing CCS must undergo verification under section 95500 in order to receive credits.

   8. (8) For direct air capture operations only, the greenhouse gas emissions for electricity used by the capture facility must be calculated as follows:

      1. (A) For electricity generated onsite (i.e., behind the meter), the greenhouse gas emissions must be calculated using the CA-GREET4.0 emission factors for the specific electricity supply.
      2. (B) Grid electricity used in direct air capture can be claimed as low-CI electricity as specified in section 95488.8(i)(1)(C).
      3. (C) If new or expanded purchased low-CI electricity cannot be demonstrated, the greenhouse gas emissions must be calculated using CA-GREET4.0 (e.g., eGRID U.S. subregion if applicable) emission factors.

3. (c) Application Contents and Submittal. Unless otherwise noted, an application for CCS credits must comply with the following requirements:

   1. (1) An application must be filed jointly by an entity that captures CO₂, an entity that transports the CO₂, and an entity that sequesters the resultant CO₂, unless the same entity is responsible for CO₂ capture, transport, and sequestration.

   2. (2) An application must contain the following materials:

      1. (A) A complete description of the CCS project and how greenhouse gas emissions are reduced. To be eligible for LCFS credits, a CCS project sequestering CO₂ that is already being captured and used productively in industry must demonstrate a net reduction in greenhouse gas emissions by providing evidence that the marginal new source of CO₂ replacing the prior industrial use is newly installed or expanded capture from anthropogenic sources;
      2. (B) An engineering drawing(s) or process flow diagram(s) that illustrates the project and clearly identifies the system boundaries, relevant process equipment, mass flows, including the quantity of CO₂ injected into pipeline or delivered by other modes of transport for CO₂ injection, and energy flows necessary to calculate the CCS credit;
      3. (C) A description of all combustion and electricity-powered equipment within the system boundaries, including their respective capacities, sizes, or rated power, fuel utilization type, fuel shares, energy efficiency (lower heating value basis), and proposed use;
      4. (D) A description of all sources of flared, vented, and fugitive emissions within the system boundaries, including the compositions and quantities of the flared, vented, and fugitive emission streams leaving the system boundaries;
      5. (E) Receipts/invoices for energy use and chemicals;
      6. (F) An estimate of the CCS credit, calculated in accordance with the accounting requirements of the CCS Protocol including descriptions and copies of production and operational data or other technical; and documentation utilized in support of the calculation. The application must contain process-specific data showing that the reductions are part of the CCS project, and
      7. (G) Executive orders issued pursuant to the permanence requirements of the CCS protocol, certifying the sequestration site as capable of permanently storing CO₂ and authorizing operation and credit generation.
   3. (3) An application must include a list of references covering all information sources used in the calculation of the CCS credit. The reference list must meet the requirements of section 95489(c)(2)(E).
   4. (4) An application must include a signed transmittal letter from the applicant attesting to the veracity of the information in the application packet and declaring that the information submitted accurately represents the actual CCS project greenhouse gas emissions reductions. The transmittal letter must be the original copy, be on company letterhead, be signed by an officer of the applicant with authority to attest to the veracity of the information in the application and to sign on behalf of the applicant.
   5. (5) CBI must be designated and a redacted version of any submitted documents designated to include CBI must be provided pursuant to the requirements described in section 95488.8(c).
   6. (6) An applicant that submits any information or documentation in support of a proposed CCS project must include a written statement clearly showing that the applicant understands and agrees that all information in the application not identified as confidential business information is subject to public disclosure pursuant to California Code of Regulations, title 17, sections 91000 through 91022 and the California Public Records Act (Government Code, §§ 6250 et seq.), and that information claimed by the applicant to be confidential might later be disclosed under section 91022 if the Board determines the information is subject to disclosure.
   7. (7) An application, supporting documents, and all other relevant data or calculation or other documentation must be submitted electronically via the AFP unless the Executive Officer has approved or requested another format.

4. (d) Application Approval Process. The Executive Officer must approve an application before the CCS project can generate credits under the LCFS regulation.

   1. (1) After receipt of an application designated by the applicant as ready for formal evaluation, the Executive Officer will advise the applicant in writing either that:

      1. (A) The application is complete, or
      2. (B) The application is incomplete, in which case the Executive Officer will identify which requirements have not been met. The applicant may submit additional information within 30 days to correct deficiencies identified by the Executive Officer, otherwise, the application will be rejected.
   2. (2) After accepting an application as complete, the Executive Officer will post the application on the LCFS website. Public comments will be accepted for 14 days following the date on which the application was posted. Only comments related to potential factual or methodological errors may be considered. The Executive Officer will forward to the applicant all comments identifying potential factual or methodological errors. Within 30 days, the applicant must either submit revisions to its application to the Executive Officer, or submit a detailed written response to the Executive Officer explaining why no revisions are necessary.
   3. (3) If the Executive Officer finds that an application meets the requirements set forth in section 95490(b), the Executive Officer will take final action to approve the CCS project. The Executive Officer may prescribe conditions of approval that contain special limitations, recordkeeping and reporting requirements, and operational conditions that the Executive Officer determines should apply to the project. If the Executive Officer finds that an application does not meet the requirements of section 95490(b), the application will not be approved, the applicant will be notified in writing, and the basis for the disapproval will be identified.
5. (e) Reporting. Each CCS project operator must report to the Executive Officer the net amount of annual sequestered CO₂ and meet all other applicable reporting requirements in accordance with the CCS Protocol and section 95490(d)(3).

6. (f) Credit Review and Issuance. A CCS project can receive LCFS credits either under the project-based provisions or through a Tier 2 fuel pathway.

   1. (1) For each approved CCS innovative crude project (section 95489(c)(1)(A)2.), refinery investment credit project (section 95489(e)(1)(D)1.), or direct air capture and sequestration project (section 95490(a)(2)), the regulated entity must report quarterly or annually through a Project Report. A regulated entity electing to report annually is required to submit its annual Project Report to CARB for the previous compliance year by April 30 of each year. Credits for these projects may be generated quarterly or annually, consistent with the reporting schedule.

      Upon the completion of reporting period in which a positive or qualified positive verification statement for the applicable Project Reports per section 95500(e) is received, the Executive Officer will determine the number of credits to be issued to the applicants. An adverse verification statement would result in no credit issuance and Executive Officer investigation.

   2. (2) For a certified Tier 2 fuel pathway that incorporates a CCS project, credits for fuel transactions reported quarterly using the certified pathway CI will be generated for the given quarter, pursuant to section 95486.1. Fuel pathway holders must include the operational data from the fuel production and the CCS project in their Annual Fuel Pathway Reports, pursuant to section 95488.10. Entities required to obtain verification of their Annual Fuel Pathway Reports must comply with the requirements in section 95500(b).

7. (g) Recordkeeping. Pursuant to section 95491.1 and the CCS Protocol, each applicant that receives approval as a CCS credit generator must maintain records for the CCS project, including records necessary to verify permanent sequestration. At a minimum, the following records must be kept:

   1. (1) The quarterly volume of alternative fuel, petroleum fuel, crude oil/natural gas produced and delivered to California;
   2. (2) Energy use and chemical use data for the carbon capture facility and CO₂ injection facility;
   3. (3) The Accounting Protocol and Permanence Protocol documents; and
   4. (4) Any additional records that the Executive Officer requires to be kept in pursuant to section 95490(d)(3).

8. (h) CO₂ Leakage and Credit Invalidation.

   1. (1) Credits for verified greenhouse gas emission reductions can be invalidated if the sequestered CO₂ associated with them is released or otherwise leaked to the atmosphere.
   2. (2) The number of invalidated credits is equal to the quantity of CO₂ released or leaked from the sequestration zone (CO₂^leakage), which must be determined in accordance with the CCS Protocol.

   3. (3) Prior to 50 years post-injection:

      1. (A) The Executive Officer may retire credits from the buffer account, up to and including the project's total contribution, to count toward the number of invalidated credits.
      2. (B) The project operator must retire credits for any balance after retiring credits pursuant to 95490(h)(3)(A).
      3. (C) The Executive Officer may retire credits from the buffer account equivalent to remaining outstanding balance after retiring credits pursuant to 95490(h)(3)(A) and (B).

   4. (4) After 50 years post-injection:

      1. (A) The project operator is no longer responsible to make up any credits found to be invalid due to leakage.
      2. (B) The Executive Officer may retire credits from the buffer account to cover any credits found to be invalid due to leakage.

Note: Authority cited: Sections 38510, 38530, 38560, 38560.5, 38562.2, 38571, 38580, 39600, 39601, 41510, 41511 and 43018, Health and Safety Code. Reference: Sections 38501, 38510, 39515, 39516, 38571, 38580, 39000, 39001, 39002, 39003, 39515, 39516, 41510, 41511 and 43000, Health and Safety Code; Section 25000.5, Public Resources Code; 42 U.S.C. Section 7545; and Western Oil and Gas Ass'n v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121 Cal.Rptr. 249 (1975).

History

1. New section filed 1-4-2019; operative 1-4-2019 pursuant to Government Code section 11343.4(b)(3) (Register 2019, No. 1). For prior history, see Register 2015, No. 47.

2. Amendment of section and Note filed 6-27-2025; operative 7-1-2025 (Register 2025, No. 26).