The three-member commission voted unanimously to deny the permit during a meeting on Wednesday, citing concerns about safety, the company's lack of transparency, and a lack of support for the project from local farmers and landowners.
"There has been overwhelming testimony (from) landowners that their welfare has been impacted, constant stress," the commission's chair Kristie Fiegen said at the meeting, a recording of which was reviewed by Reuters on Thursday.
A Navigator spokesperson said in a statement that the company is disappointed and evaluating its next steps in South Dakota. The company could reapply for the permit.
"Our commitment to environmental stewardship and safety remains unwavering," the spokesperson said.
Navigator is one of three companies, alongside Summit Carbon Solutions and Wolf Carbon Solutions, seeking to run carbon pipelines across several Midwest states. The ethanol industry sees capturing carbon emissions as a way to secure a place for the fuel in a decarbonizing transportation sector.
The administration of Joe Biden also sees carbon capture and storage (CCS) as a key tool for fighting climate change.
Navigator's full pipeline would span more than 1,300 miles (2,092 km) across Iowa, Minnesota, Nebraska, South Dakota, and Illinois, where the carbon would be sequestered.
The South Dakota commission held several evidentiary hearings on the project in July and August before making its decision.
Summit's hearing before the PUC is set to begin next Monday. North Dakota regulators denied Summit's permit application in that state in early August.
(Reporting by Leah DouglasEditing by Nick Zieminski)
By Leah Douglas
