Michigan Senate approves risky carbon sequestration despite threats to forests, groundwater and health

Today the Senate passed Senate Bills 394, 395 and 396, which would create a regulatory program for carbon sequestration projects in Michigan. Despite known risks of these technologies to our groundwater and human health–and the looming funding cuts at both the state and federal level which would amplify those risks–these bills were supported by both Senate Republicans and Democrats.

Carbon capture and sequestration (CCS) are technologies that capture carbon dioxide, or CO2, from polluting facilities such as fossil-fueled power plants and industrial sites. The carbon is then compressed and transported, usually by a network of pipelines, to sites where it is either sequestered underground or used to recover more fossil fuels. Leaks of carbon dioxide in a liquid form can contaminate groundwater and drinking water and, as gas, large plumes of CO2 can pose a severe asphyxiation risk.

Senate bills 394-396 would invite this technology into the state without accounting for critical safeguards necessary to prevent leaks and contamination. In most cases, the bills allow the state to only adopt protections consistent with federal sequestration rules, which are overseen by the Trump administration.

“The Trump administration is busy dismantling every environmental protection they can and yet the Senate has adopted bills that largely look to federal rules to protect our drinking water and groundwater,” said Tim Minotas, legislative and political director for the Michigan Sierra Club. “By requiring that we align the approval of these risky sequestration projects with minimum federal regulations, the bills hamstring our ability to enforce stronger protections that would safeguard Michigan’s unique freshwater resources from harmful polluters.”

The bills would also foist unknown and potentially long-term liability for sequestration projects onto Michiganders, as all ownership of “closed” projects would default to the state–along with liability for leaks. 

“No carbon sequestration project has closed in the US, and the one active project in Illinois has already leaked twice. We have no idea what the long-term risks and costs of these projects are to our environment and our state,” said Charlotte Jameson, chief policy officer for the Michigan Environmental Council. “These bills put all liability for closed projects on the backs of residents and deny Michiganders full recourse against owners of active sequestration sites. It is ironic that in the middle of a state budget crisis, our decision-makers are approving bills that could blow massive holes in future budgets.” 

According to a 2025 Fortune Business Insights study, the CCS market size was valued at $3.54 billion in 2024, and is expected to quadruple by 2032. These projects are also eligible for federal tax credits that range from $85 to $180 per metric ton. Despite this huge industry profit margin, Senate Bills 394-396 don’t ensure that sequestration operators are paying their fair share for the use of our state resources, only charging at most $0.32 per ton of stored carbon. The bills would also allow operators to use funding from leases or royalties to fund road construction through our state forests.

“Carbon sequestration is a multibillion dollar industry and CCS projects are posed to rake in likely millions in federal tax credits, so they should pay their fair share for use of Michigan’s resources,” said Carlee Knott, climate and energy policy manager for the Michigan Environmental Council. “Capping the fee for sequestration at $0.32 per ton is a pittance compared to the companies’ revenues. If we’re going to allow these technologies into Michigan, the least our decision-makers can do is ensure we’re capturing strong revenue from corporations to fund programs that protect us from climate change and safeguard our groundwater.”

“Michigan simply must do more to safeguard communities and the state’s unique freshwater resources from harmful pollution, “ said Abby Clark, Michigan Director, Government Affairs, at NRDC (Natural Resources Defense Council). “This bill hamstrings the State’s ability to enforce strong protections by aligning approval of these sequestration projects to federal regulations–that essentially hands elements of rulemaking over to the Trump Administration, just as they are hacking away at critical health and environmental protections.”