California Governor Gavin Newsom signed legislation lifting moratorium on transportation of carbon dioxide by pipeline. By Joshua T. Bledsoe, Marc T. Campopiano, Brian McCall, and Shawna Strecker On October 10, 2025, Governor Gavin Newsom signed legislation aimed at boosting California’s carbon capture, removal, utilization and storage (CCUS) market. CCUS involves capturing carbon dioxide (CO2) from... Continue Reading
California Governor Gavin Newsom signed legislation lifting moratorium on transportation of carbon dioxide by pipeline.
By Joshua T. Bledsoe, Marc T. Campopiano, Brian McCall, and Shawna Strecker
On October 10, 2025, Governor Gavin Newsom signed legislation aimed at boosting California’s carbon capture, removal, utilization and storage (CCUS) market. CCUS involves capturing carbon dioxide (CO2) from point-sources — such as industrial facilities — transporting it, and injecting it into underground geological formations for permanent storage, enhanced oil recovery, or beneficial use of the CO2 in a commercial product (e.g., to produce fuels or building materials). This process is designed to sequester or use anthropogenic greenhouse gas (GHG) emissions before they enter the atmosphere to reduce the impacts of climate change.
Senate Bill (SB) 614 (2025) by Senator Henry Stern principally addresses the “transportation” step of CCUS. The bill requires the California Office of State Fire Marshal to adopt regulations for the transportation of CO2 by pipelines by July 1, 2026.1 These regulations must include safety standards that are at least as protective as proposed requirements from the Pipeline and Hazardous Materials Safety Administration (PHMSA), the federal agency charged with establishing regulations for the transportation of carbon dioxide. The State Fire Marshal must reassess these safety standards at least once every five years to determine whether the regulations should be amended.
In addition to the State Fire Marshal’s regulations, SB 614 creates statutory authority for a variety of safety requirements for the construction and operation of CO2 pipelines. For example, SB 614 prohibits an operator from constructing a CO2 pipeline in close proximity to “sensitive receptors,” which includes education facilities, healthcare facilities, and residences.2 Sensitive receptors may not be located within the pipeline’s “emergency planning zone,” which is defined as an area within two miles of either side of the pipeline, unless a risk analysis demonstrates that the “exposure to carbon dioxide is within an acceptable range.”3
Moreover, pipelines originally constructed for other liquids or gases may not be approved to transport CO2, and CO2 pipelines may not be constructed using previously used pipe or components.4 The bill also establishes certain requirements for emergency planning, mapping, and public awareness5 and grants the State Fire Marshal the authority to order a pipeline shutdown “for violations of state or federal law, or if continued pipeline operations present an immediate danger to health, welfare, or the environment.”6
Critically, SB 614 not only establishes safety requirements for CO2 pipelines but also narrows the existing moratorium to allow intrastate CO2 transport via pipeline once state rules are in place.
In 2022, Governor Newsom signed SB 905 into law, which aimed to accelerate the deployment of carbon management technologies in the state. SB 905 instructed the California Air Resources Board (CARB) to create a “Carbon Capture, Removal, Utilization, and Storage Program” to evaluate the efficacy, safety, and viability of CCUS and carbon dioxide removal (CDR) technologies; facilitate capture and sequestration of CO2 using these technologies; and develop monitoring and reporting frameworks to enforce the proper implementation of these activities.7
Relationship to SB 905 (2022)
SB 905 also enacted a conditional moratorium on building CO2 pipelines in California. Section 71465 of the California Public Resources Code, added by SB 905, prohibited the use of pipelines to transport CO2 to or from a CCUS project until PHMSA concludes its rulemaking on minimum federal safety standards for transporting CO2 by pipeline.8 PHMSA, under former President Biden, released a draft regulation that proposed a comprehensive safety framework for CO2 and hazardous liquid pipelines on January 10, 2025.
However, as of November 2025, the PHMSA rulemaking has not been finalized. In compliance with the “Regulatory Freeze Pending Review” memorandum issued by President Trump on January 20, 2025, PHMSA withdrew the notice of proposed rulemaking from publication in the Federal Register. In the Spring 2025 Unified Agenda of Regulatory and Deregulatory Actions, issued on September 4, 2025, the rulemaking for “Pipeline Safety: Safety of Carbon Dioxide and Hazardous Liquid Pipelines” was categorized as a “long-term action,” and the timetable for next stage of the action is “undetermined.” Thus, under the former version of the statute, the transportation of CO2 by pipeline would be prohibited long term, creating a significant barrier to the deployment of CCUS projects in California.
SB 614 amends the pertinent section of the Public Resources Code, effectively eliminating this moratorium for intrastate pipelines. Now, the law provides that this conditional moratorium applies only to “[a]n interstate pipeline subject to Part 195 of Title 49 of the Code of Federal Regulations.”9 Other pipelines, including “every intrastate pipeline used for the transportation of … carbon dioxide,” may now be used for CCUS projects once the State Fire Marshal adopts CO2 pipeline regulations and the operator “demonstrates that the pipeline meets the standards in those regulations.”10
In other words, while interstate pipelines may only be used to transport CO2 after PHMSA finalizes its rulemaking, intrastate pipelines may be used once the State Fire Marshal adopts its CO2 pipeline rules and the operator shows compliance with those regulations. Because SB 614 requires the State Fire Marshal to adopt these regulations by July 1, 2026, CCUS projects utilizing intrastate pipelines in California could be deployed as early as next year.
SB 614 is a critical step in facilitating the development of CCUS projects in California, but its passage was not without opposition. Some environmental justice groups opposed SB 614, arguing that the moratorium on CO2 pipelines in the state should remain in place at least until PHMSA finalizes its rules. Even more broadly, some environmental groups argue that CCUS is an expensive technology that has not yet been shown to be effective at reducing GHG emissions, and that reliance on CCUS will only perpetuate the use of fossil fuels.
However, other stakeholders have argued that CCUS is a critical tool to reduce carbon emissions and make progress towards California’s ambitious net zero goals. California has committed to reducing anthropogenic emissions to 85% below 1990 levels by 2045 and to achieving carbon neutrality by 2045, with negative emissions every year thereafter. CARB has stated that CCUS will be “essential” to achieving carbon neutrality. And when signing SB 614, Governor Newsom stated that “[c]arbon management is a critical pillar of California’s world-leading efforts to cut climate pollution.”
With a statutory deadline of July 1, 2026, for CO2 pipeline regulations, the State Fire Marshal’s rulemaking presents a near‑term opening for developers and other stakeholders to help shape workable standards that can unlock California CCUS projects. Latham & Watkins will continue to monitor for further developments.
- Gov. Code § 51011.5. ↩︎
- Gov. Code § 51010.5(m). ↩︎
- Id., §§ 51010.5(b), 51011.6(a). ↩︎
- Id., § 51011.5(d), (e). ↩︎
- Id., § 51015.06. ↩︎
- Id., § 51018.9. ↩︎
- For more information on SB 905, see this Latham Client Alert, “California Legislature Passes Four Aggressive Climate Bills and Authorizes Extension of Diablo Canyon” (September 8, 2022). ↩︎
- See Pub. Resources Code § 71465(a) (2023). ↩︎
- Pub. Resources Code § 71465(a)(1) (2025). ↩︎
- Id., § 71465(a)(2) (2025); Gov. Code § 51010.5(a). ↩︎
