Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 72

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 8
Chunk 72
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 our fixed price contracts cover, we generally cannot predict the future movements in our realized crush spread
for more than four months; thus, we are unable to predict the likelihood or amounts of future income or loss from the operations
of our ethanol facilities.

One Earth Energy, LLC Carbon Sequestration and Plant Expansion

One Earth Sequestration, LLC, a wholly
owned subsidiary of One Earth Energy, LLC, is in the developmental stage of a carbon sequestration project near the One Earth
ethanol plant. In October 2022, we applied for a Class VI injection well permit for three wells with the EPA, and we continue
to provide information to the EPA upon request during the technical review of our application. We currently expect the EPA to
prepare a draft permit by November 2025 and make a final permit decision by April 2026, according to the EPA’s Class VI
Permit Tracker Dashboard on their website. We also need to obtain a county special-use zoning permit for the sequestration site.
We have completed the construction of the capture and compression facility to capture, dehydrate, and compress carbon dioxide
from the One Earth ethanol plant to a state suitable for sequestration. Testing has not yet been completed and we cannot begin
construction of the pipeline or sequestration well until further permits and approvals are received.

We have secured land easements from all
necessary landowners to allow the construction of a pipeline on their land to the first two injection wells. We also have landowner
subsurface easements for the first injection well with the capacity to allow for carbon sequestration for our One Earth plant
for 15 years. The Illinois General Assembly passed the Safety and Aid for the Environment in Carbon Capture and Sequestration
Act (Senate Bill 1289), which was signed by the Governor in July 2024. The new legislation imposes additional safety, environmental
and other requirements on obtaining permits and approvals for carbon capture and sequestration facilities in Illinois, including
CO2 pipelines. Further, the new legislation imposes a moratorium on the issuance of new certificates of authority for the construction
of CO2  pipelines until the earlier of the date federal CO2  pipeline safety standards are finalized by the federal
PHMSA or, subject to certain other conditions, July 1, 2026.

Although we have made meaningful progress
and significant investments in the carbon sequestration project at One Earth, we continue to work with the various government
agencies involved to obtain all