The Environmental Protection Agency’s (EPA) proposed rollback of the Greenhouse Gas Reporting Program (GHGRP) including 40 CFR part 98 subpart RR (Subpart RR) created uncertainty with respect to the requirements to qualify for Internal Revenue Code section 45Q (Section 45Q) credits for carbon oxides injected for permanent geological storage (Permanent Sequestration), which currently include compliance with Subpart RR. The requirements to claim credits under Section 45Q for carbon oxides injected for use as a tertiary injectant in a qualified enhanced oil or natural gas recovery project (EOR), in contrast, include compliance with either Subpart RR or the International Organization for Standardization (ISO) standards ISO 27916:2019, so compliance with the ISO standards would be sufficient if Subpart RR were repealed.
A recent ISO update to its standard that governs permanent (long-term) geological storage (ISO 27914:2026) creates an opportunity for the U.S. Treasury Department (Treasury) and the Internal Revenue Service (IRS) to utilize such update as a replacement for Subpart RR in the requirements for Section 45Q credits for carbon oxides injected for Permanent Sequestration.
Background
Following the proposed repeal of Subpart RR at the end of 2025, the IRS promulgated Notice 2026‑1 (Notice), establishing a safe harbor for claiming Section 45Q credits for the 2025 calendar year for carbon oxides injected for Permanent Sequestration if EPA does not launch the online tool for taxpayers to prepare and submit Subpart RR reporting by June 10, 2026 (for a more detailed discussion of the Notice, see our prior article). Generally, the Notice allows taxpayers to demonstrate compliance with Subpart RR by submitting an annual sequestration report prepared in compliance with Subpart RR to an independent engineer or geologist rather than to EPA. Pursuant to the guidance, the independent expert must certify the report and attest to independence. The Notice effectively preserved Subpart RR compliance through third‑party certification, but only for the 2025 tax year. Accordingly, the Notice does not provide a durable long-term solution.
ISO 27914:2026 as a Subpart RR Substitute
On April 1, 2026, ISO released ISO 27914:2026, which addresses underground storage of CO₂ in geological formations that do not produce hydrocarbons. Similar to the ISO standard included in the requirements for carbon oxides injected for EOR in Section 45Q, this ISO standard could be the mechanism that Treasury and the IRS adopt to provide a permanent replacement for Subpart RR for purposes of claiming the Section 45Q credit for carbon oxides injected for Permanent Sequestration in the absence of Subpart RR.
This updated ISO 27914:2026 standard is significant because earlier versions (e.g., ISO 27914:2017) were widely viewed as lacking sufficiently detailed and prescriptive requirements for storage calculation and monitoring, reporting, and verification (MRV) to function as a credible substitute for Subpart RR. The 2026 revision is described as addressing these gaps by incorporating more robust and detailed quantification and verification provisions. However, since ISO 27914:2026 is technically scoped to CO₂ streams only, any extension of its methodology to carbon oxides beyond CO₂ in Section 45Q would reflect a policy choice aligned with the statute’s broader definition of qualified carbon oxides.
Nonetheless, ISO 27914:2026 still has the potential to serve as a viable replacement framework for Subpart RR, in part, because it adopts elements akin to Class VI UIC requirements and Subpart RR’s quantification and MRV concepts, covering issues such as site screening and characterization, well construction and operations, risk management, closure, and “RR-like” quantification and MRV provisions. There are significant commonalities between Subpart RR and ISO 27914:2026, including parallel concepts such as: (1) delineating the storage unit and review area / identifying leakage pathways; (2) CO₂ stream characterization sufficient to quantify mass injected; and (3) mass-balance type accounting (mass injected/inputs minus losses/leakage/operational emissions).
For practical U.S. deployment, ISO 27914:2026 is expected to be reviewed for approval by the American National Standards Institute (ANSI). Treasury and the IRS may choose to align any adoption timeline with ANSI action, consistent with how it recognized the ISO standard for EOR (ISO 27916:2019) after ANSI endorsement.
Treasury could replace Subpart RR compliance with ISO 27914:2026 compliance in the requirements for Permanent Sequestration in the Treasury Regulations under Section 45Q. Doing so would require Treasury to identify which ISO provisions function as Subpart RR substitutes, particularly those addressing quantification and monitoring, reporting, and verification, and require annual certification by a qualified independent engineer or geologist consistent with both the Notice and existing ISO‑based pathways. Treasury could further align documentation and filing requirements, including Form 8933, with current completeness and timing rules, while providing transition relief that allows projects operating under Subpart RR MRV plans to map existing monitoring and quantification protocols onto ISO 27914:2026 to ensure continuity if Subpart RR is repealed.
Conclusion
ISO 27914:2026 has the potential to become the durable, standardized reporting and verification pathway for demonstrating Permanent Sequestration for purposes of Section 45Q if Subpart RR is repealed. The adoption of ISO 27914:2026 (potentially following ANSI endorsement) could provide a more resilient framework that is less vulnerable to shifting EPA reporting infrastructure, while still preserving rigorous quantification and MRV expectations needed to support credit integrity.
