Louisiana's carbon capture industry faces uncertainty under Trump administration
LAKE CHARLES, La. (Louisiana First) — Louisiana has steadily ramped up its investments in carbon sequestration projects, but with the Trump administration aiming to curb government spending and shift its focus away from reducing carbon emissions, questions remain about the future of the industry.
Carbon capture technology began gaining traction during the first Trump administration and continued under President Biden, whose policies prioritized emission reductions. Louisiana has dozens of injection sites proposed across the state, with the first Class VI permits expected to be awarded later this year, allowing projects to move forward.
Many of these initiatives are backed by the oil and gas industry, which sees carbon sequestration as a way to lower emissions and remain competitive in global markets.
'I don't think you can separate CCS from the larger American energy independence, energy dominance conversation,' said Tommy Faucheux, president of the Mid-Continent Oil and Gas Association. 'If consumers are saying that they want products that have a lower carbon impact on the environment, then these businesses will continue to invest to be able to deliver those products to consumers.'
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Carbon sequestration is the process of capturing carbon dioxide from the air or industrial sources, compressing it, and injecting it deep underground into specific rock formations for long-term storage.
A form of carbon capture has already been in use in Louisiana for about 50 years. Oil and gas companies inject CO₂ into wells to push natural gas to the surface for collection. The new wells will focus solely on storing carbon without extracting other resources.
One key federal incentive for the industry is the 45Q tax credit, which rewards companies based on the amount of carbon they capture and inject underground. Gulf Coast Sequestration, part of Stream Companies, has three proposed projects in Cameron Parish. While the company currently does not benefit from 45Q, officials say the industry remains strong.
'Other credits that industry might try to use to transition to low-carbon fuels like hydrogen are all part of the mix of incentives that industry is trying to align with,' said Gray Stream, founder of Gulf Coast Sequestration. 'At the moment, [carbon sequestration] seems to still be supported. But my crystal ball on exactly what the new administration is doing is a little murky.'
Louisiana is one of only three states granted primacy over Class VI permitting, allowing it to approve projects without additional federal oversight, which could expedite the process.
'The geology of what's underneath us is really attractive,' said State Rep. Brett Geymann, R-Lake Charles. 'We also have the existing infrastructure—pipelines, industry, and an industrial area that's already here.'
Despite Louisiana's advantage, no Class VI permits have been awarded yet, over a year and a half after the state gained primacy. Some lawmakers worry that delays could cause companies to take their projects elsewhere.
'From an economic development standpoint, one of the beautiful things about CCS is that we do have this advantage in Louisiana because we were able to achieve primacy earlier than the others,' Faucheux said. 'We have the support. This began under a Trump administration. Governor Landry supports carbon capture.'
Most neighboring states have applied for primacy to compete with Louisiana's growing carbon capture industry. The Louisiana Department of Energy and Natural Resources anticipates awarding the state's first Class VI permit by the end of the first quarter in 2025.
Carbon sequestration has been a controversial topic in Louisiana, often sparking political and environmental debates. Some proposed injection sites have faced opposition from local communities, with packed legislative hearings and public pushback against projects.
Critics argue that carbon sequestration's long-term effectiveness in reducing emissions remains unclear.
'I believe the process is very rigorous and a lot of boxes have to be checked, but I'm not going to discount the fact that there are still concerns—and that there are legitimate concerns,' Geymann said. 'Some of those we may be able to address legislatively.'
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Stream emphasized that extensive geological research in Louisiana has guided the industry's development.
'We have a lot of expertise, a lot of data, and an industrial economy in this region that emits CO₂ but wants to be less carbon-intensive,' Stream said.
Stream's proposed injection sites are located on cattle grazing land on his family-owned property in a remote area. He said these projects will not disturb marshlands or significantly impact wildlife. The company plans to inject carbon beneath a thick layer of shale, which acts as a natural seal for the underground saline aquifer storing the CO₂.
Geymann pointed out that companies investing in carbon sequestration are doing so partly to maintain access to global markets, where buyers increasingly demand lower carbon footprints.
'If you don't have a way to reduce your carbon footprint, it affects your ability to borrow capital and the interest rate at which you can borrow it when you're dealing in the global market,' Geymann said.
While the Trump administration has not explicitly committed to preserving the 45Q tax credit or promoting carbon sequestration, EPA Administrator Lee Zeldin recently awarded West Virginia primacy for Class VI permitting, indicating continued federal support.
'So I think there are some philosophical differences about what the drivers of these projects should be,' Stream said. 'But that philosophical difference doesn't seem to really get in the way of understanding industries, customers, their export markets, and their investors.'
On the state level, legislators have already proposed new regulations affecting local approval of carbon sequestration projects. Geymann anticipates a busy legislative session as lawmakers debate further CCS regulations and as the state prepares to issue its first Class VI permit.
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