Carbon at a Crossroads: EPA Rethinks CO₂ Rules

EPA plans to scale back CO₂ reporting for EOR, shifting how companies track carbon and defend tax credits

12 Feb 2026

Washington is preparing to redraw the boundaries of federal carbon oversight, as the Environmental Protection Agency proposes eliminating most greenhouse gas reporting requirements after the 2024 reporting year.

The agency has also signalled it would suspend certain oil and gas reporting obligations until 2034. If adopted, the changes would alter how companies involved in enhanced oil recovery (EOR) measure and disclose carbon dioxide emissions.

For operators that inject CO₂ underground to increase crude output, the shift promises lighter administrative burdens. Yet it also raises broader questions about transparency in a market where emissions data increasingly shapes investor decisions.

Since its launch, the Greenhouse Gas Reporting Program has provided a standardised framework for emissions data. Companies active in CO₂-based EOR, including Occidental Petroleum, Denbury and ExxonMobil, routinely reference the data in sustainability reports and investor presentations. The system has helped establish a common benchmark for carbon performance across the sector.

The proposed rollback could complicate the landscape for the federal 45Q tax credit, which rewards companies for capturing and storing carbon. Eligibility is determined by the Internal Revenue Service and supported by EPA monitoring guidance. While the reporting programme has not been the sole basis for verification, it has played a central role in demonstrating how much carbon is securely stored and in underpinning confidence in the broader measurement system.

EPA officials say the revisions would streamline compliance and better align reporting rules with statutory authority. Supporters argue that many operators already maintain advanced internal monitoring systems, making some federal disclosures redundant.

Existing safety regulations for underground injection wells would remain in place. Rules designed to protect drinking water and ensure well integrity are not part of the proposed changes.

What may shift is the structure of public oversight. Without a single federal reporting platform, supervision could become more fragmented, divided among state regulators and private auditors. Investors and lenders may rely more heavily on third-party verification and company-led disclosures.

For the EOR industry, the proposal represents more than a technical adjustment. As federal requirements are reduced, companies will face greater scrutiny over how they measure and communicate their carbon performance in a market that continues to tie capital to climate accountability.