3 essentials for carbon capture and storage to really take off

Reducing global carbon emissions requires more than relying on traditional solutions like energy efficiency improvements and renewable energy expansion.

The decarbonization of hard-to-abate sectors, like steel and cement, demand the deployment of new and improved carbon capture and storage (CCS) and carbon capture, utilization and storage (CCUS) technologies.

Global energy demand is expected to grow significantly, and while renewables will make up a fair share, a significant volume will still come from hydrocarbons. If the world is serious about reducing emissions, CCS – the capture of carbon dioxide (CO₂) emissions and their permanent storage – has to be a major technological initiative.

To align with net zero targets, the global CCUS technology capacity must expand significantly by more than 100 times in the long-term in order to reach 4 to 6 gigatons CO₂ by 2050 and decarbonize about 15% to 20% of today’s energy-related emissions.

Reports suggest that as of 2024, 628 projects are in the pipeline across the value chain of CCS with a 15% year-on-year increase, with investments in it tripling since 2022 to reach $6.4 billion – highlighting the importance of increasing recognition of CCUS in achieving global climate goals.

In addition, if all the announced projects worldwide are completed on schedule and operate at full capacity, they could capture more than 430 million metric tons of carbon dioxide every year by 2030.

Meanwhile the project pipeline of CCUS technology – which sees CO₂ stored or used to create products like fuel or chemicals – has been more robust than ever. However, significantly more investments will be needed to meet global climate targets.

To unlock the full potential of CCS and CCUS, three essentials will be key:

Given the high investment required for CCUS projects, a viable solution is to implement hub projects, which see multiple industry players sharing resources and infrastructure – thereby reducing individual investment burdens and operational risks.

Such collaborations are particularly viable in regions with a high concentration of industries emitting significant CO₂, enabling cost-effective capture and storage solutions. Norway, the United Kingdom, Canada and Australia are making significant strides on this front with several hubs under development and some already operational, showcasing their commitment to reducing emissions and advancing low-carbon technologies.

Gulf Cooperation Council energy firms – e.g. Saudi Aramco, ADNOC, and QatarEnergy – are investing in CCUS projects to decarbonize industrial hubs. The Jubail CCUS Hub being built by Aramco and its partners with a planned capacity 9 million tons is set to be the largest of its kind in region.

In Europe, CO₂ networks connecting Poland and France to storage sites in the North and Baltic Seas demonstrate cross-border collaboration for shared infrastructure. One such project is CO₂ capture and transportation via rail to Gdansk, where CO2 will be shipped to storage sites in the North Sea. The development of such networks is expected to contribute to economic growth and create employment opportunities.

Moreover, providing “CCS as-a-service” has also been widely adopted by companies and enables emitters to avoid upfront technology investments by paying for CO₂ captured, with additional revenue generated through partnerships where captured CO₂ is sold for industrial uses. The hub model plays a significant role in de-risking private sector investment due to shared infrastructure and bringing the costs down.

In Norway, the Northern Lights project, the world’s first cross-border CO₂ transport and storage facility, is preparing for a third expansion due to higher demands, while in the UK, public investment through the Carbon Capture and Storage Infrastructure Fund has announced an investment of £21.7 billion to support CCUS projects.

Leveraging existing infrastructure can bring huge cost efficiencies. A prominent example is Santos Ltd’s Moomba CCS Project in Australia, which reuses pipelines and gas processing facilities and utilizes depleted reservoirs – making this one of the lowest-cost CCS projects globally, with a lifecycle cost under $30 per tonne.

CCUS technologies have evolved to be more scalable and cost-effective. Key to these advancements are mineralization techniques that convert CO₂ into stable solid forms, eliminating risks associated with traditional geological storage while enabling new commercial applications, such as incorporating captured CO₂ into concrete and synthetic products.

Climeworks, 44.01, LanzaTech and MCi Carbon are among companies working on such innovations, demonstrating how CCUS can mitigate emissions to support a more sustainable, lower-carbon future and helping to meet net zero ambitions. From established methods to innovative approaches like direct air capture (DAC), algae-based capture and carbon conversion, investments are relevant to scale operations and reduce costs.

Mineralization processes enhance natural reactions between CO₂ and minerals such as basalt and peridotite, for example. Climeworks’ DAC systems inject CO₂ into basalt for permanent sequestration, while 44.01 accelerates mineral carbonation using peridotite, eliminating complex geological infrastructure. MCi integrates CO₂ into construction materials, embedding carbon within infrastructure and supporting circular economy initiatives. Similarly, Lanzatech utilizes microbial fermentation to convert CO₂ into valuable products like ethanol, which can be refined into biofuels and other materials.

Meanwhile, Aramco’s carbon curing technology, developed in collaboration with Korea Advanced Institute of Science and Technology (KAIST), integrates into the concrete curing process, enabling the capture and storage of up to 20% CO₂ within the concrete itself.

Accelerating the concrete curing process from the traditional 28 days to just one both reduces the environmental footprint of concrete production and enhances the material’s strength by up to 30%. If scaled globally in the precast concrete industry, this method could capture and recycle up to 246 million tons of CO₂ annually, equivalent to removing emissions from 53 million cars worldwide.

Such advancements highlight how carbon capture technologies can significantly contribute to reducing global emissions, while offering benefits such as improving the sustainability and performance of essential materials like concrete. These approaches further highlight the versatility of CCUS by diversifying revenue streams while enhancing sustainability efforts.

Supportive policy frameworks are essential for advancing CCUS technologies, helping countries achieve climate goals while promoting job creation and economic growth.

The European Union’s Emissions Trading System, for example, employs a cap-and-trade model to limit emissions, with recent reforms raising carbon prices to encourage CCS investments, while there is a mechanism of carbon tax in many countries.

Norway exemplifies effective climate policy with its rising carbon tax, projected to reach NOK2,000 ($220) per tonne of CO₂ by 2030. The country also provides substantial public funding for CCUS initiatives, focusing on financial support to promote innovation and technology development in the climate sector, while investing in various CCUS projects.

Research indicates that a 1% increase in direct subsidies for CCS could lead to a 0.28% rise in emissions reductions in China alone. Thus, a comprehensive policy approach that combines direct financial support with market-driven mechanisms is vital for stimulating investment, innovation and the cost-effective deployment of CCS and CCUS technologies, ultimately paving the way for a sustainable, low-carbon future.

In the United States, the federal 45Q tax credit of up to $85 per tonne for CO₂ stored from industrial sources and power generation and up to $180 per tonne for DAC, has driven a huge push to implement projects, while California's Low Carbon Fuel Standard incentivizes CCUS projects through carbon credits and potential integration into its cap-and-trade system.

The growing role of the voluntary carbon market (VCM) – a decentralized market place where organizations can voluntarily buy and sell carbon credits – is also crucial for offering a scalable pathway for reducing industrial emissions and achieving net-zero targets. As demand for high-integrity carbon credits rises, CCS projects can generate carbon removal or avoidance credits, attracting corporate buyers seeking durable climate solutions.

By serving as a mechanism to channel private finance into CCS development, the VCM helps bridge the gap between current costs and the necessary investment for large-scale deployment. In this context, the multi-company, multi-sector CCS+ Initiative aims to scale cutting edge climate technologies by developing a robust methodology to measure, validate and credit CO₂ removals from CCS activities.

Policy and regulatory support for measurement and monetization of reduced emissions and removed carbon through robust carbon accounting methodologies can unlock the potential of CCUS removal and storage solutions, while the VCM can accelerate the commercialization of CCS and support its integration into broader decarbonization strategies.

A comprehensive policy approach, combining direct financial support with market-driven mechanisms, is essential to stimulate investment and innovation in CCS and CCUS technologies. By fostering collaboration and unlocking capital for such technologies, we can pave the way for a sustainable, low-carbon future.