Wondering what state carbon management laws mean for your community or business? Here’s what to know about the policies shaping the future.

In 2024, many states across the country took important steps to pass new laws about carbon management—how we capture, transport, and store carbon dioxide (CO₂) to reduce emissions. With changes at the federal level, 2025 is shaping up to be another big year for state-level action. These laws can have major impacts on local communities and businesses, shaping safety rules, economic opportunities, and long-term environmental protections. 

Here’s what you need to know about how these policies affect you.   

For Communities: What Carbon Management Laws Mean for You

State laws on carbon management help create clear rules and protections when projects are proposed in your area. These laws can address concerns about safety, environmental impacts, and how these projects will be monitored over time. 

Legislation can assure the public about what to expect when a carbon management project is proposed or confirmed in their communities. It can also assure the safety of different components across the project’s lifecycle—from capture to transport to storage.

To see what this looks like in practice, see California’s SB 905, enacted in 2022, which: 

• Placed a ban on CO₂ pipelines in the state until new federal safety regulations are finalized through the Pipeline and Hazardous Materials Safety Administration (PHMSA).  

• Required the state air resources board to establish a Carbon Capture, Removal, Utilization, and Storage Program to evaluate the safety and effectiveness of carbon management technologies. 

• Required the program to include certain monitoring activities to ensure public safety. 

• Authorized the state board to require changes in operations of a carbon management project if the monitoring detects any issues that could put public health and safety at risk. 

In spring 2025, the California General Assembly introduced AB 881, which would lift the existing CO₂ pipeline ban by allowing the State Fire Marshal to adopt CO₂ pipeline regulations. These regulations would need to be equivalent to the draft PHMSA regulations released in early 2025 by the Biden administration, which have yet to be finalized at the federal level. 

For Businesses: Reducing Uncertainty and Supporting Innovation

For businesses, clear carbon management laws help cut down on delays, reduce costs, and provide long-term regulatory certainty. New laws in states like West Virginia and Pennsylvania have helped project developers by clarifying: 

Who is responsible for stored CO₂ over time – Some laws transfer liability to the state after a set period. 

Who owns underground storage areas (pore space) – This provides clarity on property rights for CO₂ storage projects. Read more about these issues here.  

How CO₂ pipelines are regulated – This includes rules on land use and eminent domain, ensuring landowners are fairly compensated. 

By addressing and codifying these issues in legislation, states can help provide project developers and investors with assurances about the viability and long-term success of their projects.  

Additionally, mechanisms like tax credits can make carbon management and industrial decarbonization technologies more economically feasible for project developers. For example, Utah enacted HB 124 in 2024, which expanded an existing tax credit to include carbon management technologies. If a project meets the criteria outlined in the bill and is approved by the Utah Energy Infrastructure Board, the developers could recover between 30 and 50 percent of their construction costs, depending on the type of project.  

Why This Matters 

State policies on carbon management have real-world effects on both communities and businesses. Strong, well-thought-out legislation can provide communities with safety and environmental protections while giving businesses the regulatory certainty needed to invest in carbon management projects. 

States looking to attract carbon management projects and the associated economic opportunities should look to consensus-based policy best practices. State legislators should also keep community-level perspectives as they draft proactive legislation to address safety and landowner concerns. Approaches vary across states, and each state has unique factors to consider when developing legislation. State legislators and other decision-makers can turn to resources like the Carbon Action Alliance’s Carbon Management Civic Toolkit to learn more about carbon management and how to engage with constituents on the topic.  

Community members and business leaders can track active legislation in their states using accessible tools like the Great Plains Institute’s State Legislative Tracker and signing up for its State Legislative Digest. These tools break down key carbon management and related legislation to help stakeholders understand what these bills mean and where they are in the legislative process. To sign up for the digest, contact Emma Thomley or Alana Hadland.