South Dakota Governor Larry Rhoden last week signed a law which prohibits eminent domain for a pipeline that carries carbon oxide, which would be the Summit Carbon Solutions pipeline that ethanol producers are hoping will lower their carbon score.

“It’s very unfortunate that, despite our approvals in Iowa, North Dakota, and Minnesota, South Dakota changed the rules in the middle of the game,” said a statement from Summit Carbon Solutions. “This kind of regulatory uncertainty creates real challenges—not just for our project, but for the ethanol plants in South Dakota that now face a competitive disadvantage compared to their counterparts in neighboring states. While this presents obstacles, our project moves forward in states that support investment and innovation, and we will have more news on that soon.”

Gov. Rhoden claims the legislation, which only applies to carbon dioxide, does not kill the proposed project. “Rather than viewing this legislation as an obstacle to the proposed project…I encourage Summit and others to view it as an opportunity for a needed reset. Voluntary easements for this proposed project will still be able to move forward… In fact, without the threat of eminent domain, the opportunity might finally be available for trust to be rebuilt and for more productive conversations to occur between Summit and South Dakota landowners.”

Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw called the action an “unnecessary roadblock” between Midwest corn farmers and much needed new markets. “The South Dakota law effectively bans carbon pipelines in the state,” said Shaw. “While this is horrible for South Dakota and unfortunate for nearby states, there are numerous opportunities to sequester and ways to get there that don’t include South Dakota. The demand for ultra-low carbon ethanol around the globe is so massive that, at the end of the day, no one state will be able to stop the ethanol industry from accessing that market.”