Class II vs. Class VI Wells for CCS Development
- Yoann Hispa
- Aug 20
- 8 min read
As efforts to reduce atmospheric carbon dioxide intensify, the methods for storing it deep underground have come into focus. Central to these strategies are two distinct types of injection wells: Class II and Class VI. While both play a role in carbon capture and storage (CCS), understanding the differences between them is crucial for navigating the environmental regulations and economic incentives involved. This resource will explore the unique characteristics, permitting requirements, and applications of Class II and Class VI wells, clarifying their impact on both climate goals and project viability.
What are CCS Wells?
Wells used for Carbon Capture and Sequestration (CCS) are specialized Class VI injection wells designed to store compressed carbon dioxide (CO2) deep underground in geological formations, such as saline aquifers or depleted oil and gas reservoirs. These wells are strictly regulated by the U.S. Environmental Protection Agency (EPA) to protect underground drinking water sources. They must meet specific requirements for materials, construction, and design to ensure well integrity and prevent CO2 leakage. As CCS projects expand, applications for Class VI well permits are on the rise, emphasizing the need for proper design, material selection, and strict regulatory compliance to ensure safe, long-term CO2 storage.
How to Get a CCS Well Permit
The permitting process for Carbon Capture and Storage (CCS) projects involves several steps and is crucial for the success and legality of these projects. For a permit for a Class VI well for carbon capture and storage (CCS), you would submit your permitting request to the U.S. Environmental Protection Agency (EPA). The EPA is responsible for administering the Underground Injection Control (UIC) program, which regulates injection wells, including Class VI wells. Though certain states are beginning to seek “primacy” for regulating Class VI wells, meaning those seeking a permit will need to go through the state agency responsible for overseeing injection wells instead of the EPA.
If you are seeking a permit for a Class II well for the injection of fluids associated with oil and gas production, you may submit your permitting request to the EPA, but you may also need to obtain a permit from the relevant state regulatory agency. The requirements for Class II well permits may vary by state, and some states have their own UIC programs that are approved by the EPA.
What is the Difference Between Class II and Class VI Wells for CCS?
Wells are classified according to specific criteria and for specific purposes. Each well has different permitting requirements. Class VI wells, occasionally referred to as Class 6 wells, are used to inject carbon dioxide into deep rock formations, as part of a process called Geologic Sequestration, this is done solely to reduce CO2 emissions in the atmosphere and to mitigate climate change.
Class 2 wells, occasionally referred to as Class II wells, are wells used for enhanced oil recovery, disposal of waste fluids, and storage of liquid hydrocarbons. Only wells used for Enhanced Oil Recovery(EOR) would qualify for CCUS. LandGate can provide data on all wells across the US, and offers the ability to search and filter for the criteria most important to any given CCS project.
Class II Wells for CCS
Class II wells are a type of underground injection well that are used to inject fluids associated with oil and gas production, such as brine, produced water, and other fluids used in the drilling process. The Class II wells are typically used for EOR (also called tertiary recovery) to help enhance the recovery of oil and gas production, where CO2 is injected in wells to help sweep hydrocarbons in a reservoir that are then produced in another producing well. The Class II wells are also used for acid gas storage, where they allow for the production of sour gas while avoiding emitting hydrogen sulfide, storing it and the CO2 until needed. Finally, Class II wells are used for storing oil and gas underground for later use, particularly as part of the US Strategic Petroleum Reserve. These wells are also regulated by the US Environmental Protection Agency (EPA) under the Safe Drinking Water Act.
CCS Class II Well Permitting: The well must have a valid permit from the EPA or a state regulatory agency that meets the requirements of the Underground Injection Control (UIC) program.
CCS Class II Well Construction: The well must be constructed using materials and techniques that are appropriate for the intended injection depth and pressure. The well must be designed to prevent leaks or failures that could result in fluids contaminating underground sources of drinking water (USDWs).
CCS Class II Well Mechanical Integrity Testing: The well must undergo regular mechanical integrity testing to ensure that it is not leaking and that it is able to withstand the injection pressure.
CCS Class II Well Monitoring and Reporting: Operators of Class II wells must monitor the well and the surrounding area for any signs of leakage or other environmental impacts. They must also report regularly to the EPA on their injection activities and any incidents or deviations from their permit conditions.
CCS Class II Well Closure and Post-Closure Care: When the well is no longer needed for injection, it must be properly plugged and abandoned to prevent future fluid leaks. The operator must also provide post-closure care to ensure that the well remains secure and does not pose a risk to USDWs. The specific requirements for Class II wells may vary depending on the state and the specific characteristics of the well and the surrounding geology. However, the overall goal of the UIC program is to ensure that Class 2 wells are operated safely and that they do not pose a threat to human health or the environment.
Class VI Wells for CCS
Class VI wells are used to inject carbon dioxide into deep rock formations, as part of a process called Geologic Sequestration, this is done solely to reduce CO2 emissions in the atmosphere and to mitigate climate change. These wells are also regulated by the US Environmental Protection Agency (EPA) under the Safe Drinking Water Act.
The site where the well will be constructed must undergo a thorough characterization to determine if it is suitable for CO2 injection and storage. The site must be geologically stable and free of faults, fractures, or other features that could cause CO2 to escape from the formation. The formation that will store the CO2 from a Class VI should be a "tomb".
Key requirements for Class VI wells used for CO2 injection and storage include demonstrating an injection zone(s) with sufficient areal extent, thickness, porosity, permeability, and a total dissolved solids (TDS) concentration of less than 10,000 mg/l to receive the total anticipated volume of the carbon dioxide stream. Additionally, there must be a confining zone(s) free of transmissive faults and fractures, with sufficient areal extent and integrity to contain the injected carbon dioxide stream and displaced formation fluids. This zone must also allow injection at proposed maximum pressures and volumes without initiating or propagating fractures. It's crucial to identify all underground sources of drinking water (USDW) with a TDS concentration less than 10,000 mg/l to prevent CO2 migration into any USDW, and to maintain pore pressures in the injection zone at less than 90% of the fracture gradient.
CCS Class VI Well Construction: The well must be constructed using materials and techniques that are appropriate for the intended injection depth and pressure. The well must be designed to prevent leaks or failures that could result in CO2 escaping into underground sources of drinking water (USDWs).
CCS Class VI Well Mechanical Integrity Testing: The well must undergo regular mechanical integrity testing to ensure that it is not leaking and that it is able to withstand the injection pressure.
CCS Class VI Well Monitoring and Reporting: Class VI wells must monitor the well and the surrounding area for any signs of CO2 leakage. They must also report regularly to the EPA on their injection activities and any incidents or deviations from their permit conditions.
CCS Class VI Well Closure and Post-Closure Care: When the well is no longer needed for injection, it must be properly plugged and abandoned to prevent future CO2 leaks. The operator must also provide post-closure care to ensure that the well remains secure and does not pose a risk to USDWs. These requirements are intended to ensure that CO2 is stored safely and securely in Class 6 wells, with minimal risk of leakage or other environmental impacts.
IRA Tax Credits for CO2 Sequestration
The Inflation Reduction Act (IRA) introduced groundbreaking tax credits to incentivize carbon capture and storage (CCS) efforts, marking a significant step forward in combating climate change. These credits are designed to support a variety of well types, including Class VI wells for geologic CO2 sequestration, by making such projects more economically viable. The bill's sweeping impacts extend beyond just tax incentives, fostering innovation, driving investment in clean energy, and ensuring long-term environmental protection. Below, we explore the specifics of these tax credits and their implications for the future of CO2 sequestration.
IRA Tax Credits for Class II Well CO2 Sequestration
The IRA increased the commodity price of CO2 by raising the value of the 45Q tax credit. The price varies depending on the source of CO2 as well as the way the CO2 is handled. CO2 that is injected into a class 2 well in order to be utilized for EOR would receive a 45Q credit valued at $60/tonne or $130/tonne depending on if it was captured from industrial/power generation facilities, or through Direct Air Capture facilities.
IRA Tax Credits for Class VI Well CO2 Sequestration
The IRA increased the commodity price of CO2 by raising the value of the 45Q tax credit. The price varies depending on the source of CO2 as well as the way the CO2 is handled. CO2 that is injected into a class 6 well for permanent geologic storage would receive a 45Q credit valued at $85/tonne or $180/tonne depending on if it was captured from industrial/power generation facilities, or through Direct Air Capture facilities.
Refer to this article to learn more about IRA tax credits prices for tons of CO2 injection based on the source of the CO2 and type of sequestration.
The Big Beautiful Bill and the 45Q Credit
The One Big Beautiful Bill partially modifies, preserves, and extends the section 45Z PTC for clean transportation fuel. First, the credit can be claimed for fuel production and sale for an additional two years, through December 31, 2029. Second, the adder for sustainable aviation fuel (SAF) is removed; SAF is no longer entitled to the USD 1.75/gallon base rate, and all clean transportation fuels have a base rate of USD 1.00/gallon (adjusted for inflation). Third, fuel feedstocks are limited to sourcing from the United States, Mexico, and Canada. Fourth, the Act removes the ability to double-count section 45Z-eligible fuels used as inputs to produce another section 45Z-eligible fuel.
Guidance for CCS Developers
A Class VI well qualifies for a higher tax credit than a Class II well, making it more economically appealing. However, it also requires stricter standards for CO2 sequestration and storage. From a risk perspective, Class II wells face greater political scrutiny and are often criticized by environmentalists as “greenwashing.” These wells, commonly used in enhanced oil recovery (EOR), extract more oil and gas, which generates additional emissions contributing to climate change. This creates a potential risk that policies could change under the IRA Act, affecting the tax credit eligibility of Class II wells for carbon capture and storage (CCS).
Understanding the specifics of Class II and Class VI wells as they pertain to CCS and CCUS is the first step in development. Next, you need to find, filter, and analyze the data on wells in the area. LandGate’s tools allows you to easily access well data across the US and then analyze and filter that data depending on your project’s specifications. Learn more and book a demo with our team.
