Company: REX
Filing Date: 2025-09-02
Form Type: 10-Q
Source: 0000930413-25-002856
Chunk: 88

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-09-02
Form: 10-Q
Item: Part I, Item 8
Chunk 88
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 for three wells, 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 March 2026, according to the EPA’s Class VI Permit Tracker Dashboard on their website. We also must obtain
certain state and county permits for the sequestration site and pipeline. 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 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 this area.

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