Company: REX
Filing Date: 2025-12-04
Form Type: 10-Q
Source: 0000930413-25-003566
Chunk: 31

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-12-04
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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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
CO2 pipeline between the One Earth ethanol plant and the sequestration site or a sequestration well until further permits
and approvals are received.

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

Illinois Senate Bill 1723 was signed into
law by the Governor on August 1, 2025. SB 1723 prohibits carbon sequestration activities over, under, or through the aquifer as
defined by the EPA. The proposed injection wells for our carbon sequestration project are located outside of these areas.

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 required permits and approvals, with no assurance of the ultimate success or timing of the project. Also
see the discussion under “Trends and Uncertainties” of certain recently proposed legislation that, if enacted, could
impact our carbon sequestration project.

We are also expanding the One Earth ethanol
plant. We received a construction permit from the EPA to increase production from 150 million gallons of ethanol per year to 175
million gallons of ethanol per year. Once we achieve that level of production, we intend to apply for another permit to increase
production to 200 million gallons