With more than 140 countries setting a net zero carbon dioxide (CO2) emissions target by 2050, committing to emissions reduction technologies like Carbon Capture, Utilization, and Storage (CCUS) is critical. Humans are currently responsible for nearly 40 billion tons of CO2 emissions annually, making this a significant challenge. While global CO2 capture capacity currently exceeds 50 million tons per year, it is expected to triple by 2030.
Carbon capture involves either trapping CO2 directly from a point-source of emission before it enters the atmosphere or capturing legacy emissions from the air. This captured CO2 can then be stored deep underground or recycled for various useful applications. CCUS projects have existed for over 50 years. However, development was primarily limited to enhanced oil recovery (EOR), a method of extracting more oil using CO2, due to a lack of profitability in other applications. Now, the focus is shifting beyond EOR to broader industrial deployment.
A Pivotal Year for Industrial CCUS Deployment
Experts anticipate 2025 to be a significant year for CCUS development, largely driven by national emissions targets, investor pressure, and the emergence of structured carbon markets. CCUS technology is rapidly transitioning from pilot projects into industrial deployment with investment accelerating in key areas like membrane separation, modular capture units, direct air capture, and nature-integrated CO2 recovery systems.
- Low-energy solid sorbents and hybrid systems: This technology reduces the energy intensity of the capture process, promising energy efficiency and reduced environmental impact. Hybrid systems, combining different capture technologies, achieve higher overall CO2 capture rates and operational flexibility.
- Waste heat integration and process intensification: Utilizing waste heat from industrial processes and implementing intensified processes significantly reduces energy consumption and operational costs associated with carbon capture and storage.
- Durable membranes resistant to contaminants: This enhances the longevity and performance of membrane-based capture technologies.
- Direct air capture (DAC) and bioenergy with carbon capture and storage (BECCS): Negative emissions technologies are gaining prominence with companies such as Climeworks improving the efficiency and cost-effectiveness of DAC. BECCS, which captures CO2 from biomass-fueled energy, is also emerging as a key solution.
- Carbon mineralization: This is a process where CO2 is chemically transformed into solid carbonates for permanent storage with companies such as Carbfix pioneering this approach.
Global Investment and Policy Landscape for Carbon Capture
Since 2023, global CCUS investment in carbon capture, transport, and storage nearly doubled for the second year in a row, reaching a record $11.3 billion, which is likely driven by a growing recognition of CCUS as a crucial technology for decarbonizing hard-to-abate sectors and achieving net zero emissions targets.
Policies such as the US Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) have allocated billions of dollars to advance CCUS projects, offering substantial tax credits (e.g., $180/ton for DAC and $85/ton for point source capture) and funding for demonstration projects and hubs. Similar supportive policies are being implemented in Europe, with the European Union’s Innovation Fund providing significant support for low-carbon initiatives.
Regional Investment Hotspots
- North America: The US remains a global leader in cumulative CCUS investments, with its capacity expected to jump significantly by 2035, reaching as much as 164 million tons of carbon.
- China and the Middle East: Both regions are strengthening their CCUS commitments, accounting for a quarter of capacity that is either operational or under construction, surpassing Europe’s share.
- Europe: The United Kingdom (UK), Netherlands, and Norway, among other countries, are developing CCUS in regional industrial clusters. For example, the UK has announced significant public investment through its Carbon Capture and Storage Infrastructure Fund.
Case Studies of Successful CCUS Projects
Successful industrial carbon capture solutions are emerging globally:
Sleipner Project (Norway): The world’s first commercial-scale CCUS project, which was part of a natural gas field development in the North Sea, began operation in September 1996. It captures CO2 from natural gas production and stores it in a saline aquifer. Norway’s carbon tax made storing CO2 more economical than venting it, creating an early commercial incentive demonstrating the feasibility and safety of long-term geological CO2 storage.
Petra Nova Carbon Capture Project (USA): Located in Texas, this project captures CO2 from W. A. Parish, a coal-fired power plant, using post-combustion technology for enhanced oil recovery. While it commenced commercial operation in late 2016 and restarted in 2023, it is a public-private partnership supported by significant government grants and tax credits (almost $200 million from the US Department of Energy). This project demonstrated the viability of large-scale post-combustion carbon capture on a coal plant and highlighted the importance of government support and the economic link to CO2 utilization (like EOR).
Boundary Dam Carbon Capture and Storage Project (Canada): The world’s first commercial-scale CCUS project on a coal-fired power plant, located in Saskatchewan, Canada captures 90% of the plant’s CO2 emissions and stores them underground. It has received substantial funding, including C$250 million (US$170 million) from the Canadian government. This project has demonstrated that CCUS technology could be applied to existing coal-fired power plants, and emphasized the critical role of upfront capital support from governments.
Challenges and Opportunities for CCUS Investment
The primary challenge for CCUS investment is the significant capital and operational expenses for capture technology, as well as the considerable investment required for transport pipelines and storage infrastructure. A lack of consistent carbon pricing mechanisms and clear regulatory frameworks creates instability for long-term investments, including concerns regarding long-term liability for stored CO2.
Despite these challenges, CCUS is essential for climate mitigation, particularly for hard-to-abate sectors like cement and steel, where other decarbonization options are limited. It also offers potential for negative emissions through technologies like DAC, and can provide dispatchable power to complement renewable energy sources. In addition, growing policy support and incentives, such as significant tax credits and direct funding, are increasingly making CCUS projects more financially attractive.
Conclusion
While CCUS investments still face hurdles, the increasing policy support, the development of integrated hubs, and the growing recognition of CCUS as an essential climate tool are creating a dynamic and expanding landscape for investment. Successful case studies demonstrate that with the right combination of policy, technology, and partnerships, carbon capture utilization and storage applications can be viable and play a significant role in global decarbonization efforts. If your company is interested in finding ways to utilize innovative technology solutions for carbon abatement, please contact Canopy Edge for an initial consultation.
