Abstract

Carbon Capture and Storage (CCS) stands as a foundational yet continually evolving technology at the forefront of global efforts to mitigate anthropogenic climate change by substantially reducing atmospheric carbon dioxide (CO₂) concentrations. This comprehensive report undertakes an exhaustive examination of CCS, delving into its diverse technological pathways, intricate engineering principles, current global deployment landscape, complex economic considerations, nuanced environmental ramifications, and the robust, ongoing debates surrounding its indispensable, albeit controversial, role in achieving ambitious net-zero emissions targets. By meticulously analyzing the contemporary state of CCS development and implementation, this report endeavors to furnish a holistic and profound understanding of its multifaceted potential, inherent limitations, and strategic positioning within the broader context of global decarbonization imperatives.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

1. Introduction: The Imperative of Decarbonization and the Role of CCS

The accelerating trajectory of global warming and its profound, observable impacts — ranging from extreme weather events and sea-level rise to ecological disruption — have propelled climate change to the apex of international policy agendas. The scientific consensus, articulated prominently by the Intergovernmental Panel on Climate Change (IPCC), unequivocally links these phenomena to escalating concentrations of greenhouse gases (GHGs) in the Earth’s atmosphere, predominantly carbon dioxide derived from human activities, particularly the combustion of fossil fuels for energy and industrial processes. In response to this existential threat, the international community, through accords such as the Paris Agreement, has committed to limiting global temperature increases to well below 2°C above pre-industrial levels, ideally pursuing efforts to limit the increase to 1.5°C. Achieving these ambitious targets necessitates a monumental, unprecedented transformation of global energy systems and industrial infrastructures, encompassing both drastic emissions reductions and, potentially, the active removal of CO₂ from the atmosphere.

Within this challenging landscape of climate mitigation strategies, Carbon Capture and Storage (CCS) has emerged as a technology of significant, if debated, importance. CCS is not a singular solution but rather a suite of interconnected technologies designed to intervene at various points in the CO₂ emission cycle. Fundamentally, it involves capturing CO₂ emissions directly from large, stationary sources, such as fossil fuel-fired power plants, industrial facilities (e.g., cement, steel, chemical production), and natural gas processing plants, preventing its release into the atmosphere. The captured CO₂ is then compressed, transported, and subsequently injected into deep geological formations for secure, long-term sequestration. The rationale for CCS deployment is rooted in its potential to decarbonize sectors where direct electrification or renewable energy integration is either technically challenging or economically prohibitive in the short to medium term. Furthermore, when combined with sustainable biomass energy (Bioenergy with Carbon Capture and Storage, BECCS) or Direct Air Capture (DAC) technologies, CCS holds the theoretical potential to achieve ‘negative emissions,’ actively removing CO₂ already present in the atmosphere, a capacity deemed crucial by many climate models for reaching net-zero and net-negative targets by mid-century. This report seeks to unpack the complexities of this pivotal technology, offering a detailed exposition of its operational mechanisms, real-world applications, economic landscape, and the critical discourse surrounding its efficacy and appropriateness in the grand endeavor of global decarbonization.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

2. Fundamental Principles of Carbon Capture and Storage Technologies

CCS is a complex system composed of distinct but interdependent stages: capture, compression, transportation, and geological storage. Each stage involves specific engineering principles and technological applications, which are outlined in detail below.

2.1 Carbon Capture Methods: Isolating CO₂ from Emission Streams

The initial and often most energy-intensive stage of CCS is the separation of CO₂ from other gases present in industrial flue gas or process streams. Three primary capture methods have been extensively developed and are nearing commercial maturity, with emerging technologies also gaining traction.

2.1.1 Post-Combustion Capture

Post-combustion capture is the most widely adopted and technologically mature method, particularly suited for retrofitting to existing power plants and industrial facilities without necessitating fundamental alterations to their combustion processes. In this approach, CO₂ is separated from the flue gas after the combustion of fossil fuels (coal, natural gas, or oil) in a conventional air-fired boiler. The flue gas, which typically contains 10-15% CO₂ for coal-fired plants and 3-8% for natural gas combined cycle plants, along with nitrogen, oxygen, water vapor, and pollutants, is directed to a capture unit.

The predominant technology for post-combustion capture involves chemical absorption using aqueous solutions of amines. The process typically proceeds as follows:

• Absorption: The cooled flue gas enters an absorber column, where it flows counter-currently to an aqueous solvent solution, most commonly monoethanolamine (MEA), but also includes hindered amines or blended amine solutions. The CO₂ chemically reacts with the amine solvent to form a weakly bonded compound, while other gases, primarily nitrogen, are vented to the atmosphere.
• Regeneration (Desorption/Stripping): The CO₂-rich solvent, now laden with captured CO₂, is then pumped to a regenerator (stripper) column. Here, it is heated, typically by steam, which reverses the chemical reaction, releasing the captured CO₂ in a concentrated stream (often over 95% pure). The regenerated (lean) solvent is then cooled and recycled back to the absorber for continuous CO₂ capture.

While amine-based absorption is effective, it is energy-intensive, primarily due to the heat required for solvent regeneration. This ‘thermal penalty’ significantly reduces the overall efficiency of the power plant or industrial process, leading to what is known as the ‘energy penalty’ or ‘parasitic load.’ For a typical coal-fired power plant, this can translate to a 20-30% reduction in net power output or a 14-40% increase in coal consumption to produce the same amount of electricity, as noted by sources such as Wikipedia (Carbon capture and storage, n.d.). Ongoing research focuses on developing advanced solvents with lower regeneration energy requirements, novel absorption materials (e.g., solid sorbents), and membrane technologies to improve efficiency and reduce costs. Other emerging post-combustion capture methods include physical absorption, cryogenic separation, and membrane separation, each with unique advantages and applicability depending on flue gas characteristics and desired purity levels.

2.1.2 Pre-Combustion Capture

Pre-combustion capture systems are inherently different as they separate CO₂ before combustion. This method is particularly well-suited for new facilities, especially those employing Integrated Gasification Combined Cycle (IGCC) power plants, and is also applicable to industrial processes that produce syngas, such as hydrogen production or ammonia synthesis.

The process begins with the gasification of a carbonaceous fuel (e.g., coal, biomass, natural gas, petcoke) in a controlled, oxygen-limited environment. This process converts the solid or gaseous fuel into a synthesis gas (syngas) primarily composed of hydrogen (H₂) and carbon monoxide (CO). The subsequent steps are as follows:

• Water-Gas Shift Reaction (WGSR): The syngas is then fed into a water-gas shift reactor, where carbon monoxide reacts with steam (H₂O) to produce additional hydrogen and CO₂ (CO + H₂O → H₂ + CO₂). This reaction increases the concentration of CO₂ in the gas stream and maximizes the hydrogen yield.
• CO₂ Separation: After the WGSR, the gas stream contains a high concentration of CO₂ (typically 20-50%) and hydrogen. The CO₂ is then separated from the hydrogen, often using physical solvents (e.g., Selexol, Rectisol) that selectively absorb CO₂ under high pressure and low temperature. The separated CO₂ stream is then ready for compression and storage, while the hydrogen-rich stream can be used as a clean fuel in gas turbines or fuel cells, or as a chemical feedstock.

The advantage of pre-combustion capture lies in the higher partial pressure of CO₂ in the syngas stream (before dilution with air for combustion), which generally makes separation more efficient and less energy-intensive than post-combustion methods. It also offers the significant benefit of producing a clean hydrogen fuel, contributing to the burgeoning hydrogen economy.

2.1.3 Oxy-Fuel Combustion

Oxy-fuel combustion represents a third distinct capture approach, fundamentally altering the combustion process itself. Instead of burning fossil fuels in air (which is ~78% nitrogen), the fuel is combusted in an atmosphere of highly concentrated oxygen (typically 90-99% purity). This eliminates nitrogen from the flue gas, resulting in a combustion product composed primarily of CO₂ and water vapor, along with trace amounts of pollutants.

The key component required for oxy-fuel combustion is an Air Separation Unit (ASU), which separates oxygen from ambient air through cryogenic distillation or other advanced separation techniques (e.g., adsorption). The pure oxygen is then fed into a specially designed boiler or furnace. To manage the extremely high combustion temperatures that would result from burning in pure oxygen, a portion of the CO₂-rich flue gas is often recycled back to the combustor, acting as a diluent and moderating the temperature.

After combustion, the flue gas, being largely CO₂ and H₂O, is cooled. The water vapor is condensed out, leaving a highly concentrated CO₂ stream (typically >90-95% pure) that requires minimal further purification before compression and transportation. While oxy-fuel combustion simplifies the CO₂ separation process downstream, the energy consumption and capital cost of the ASU represent a significant portion of the overall CCS project cost and parasitic load.

2.1.4 Emerging and Negative Emissions Capture Technologies

Beyond these three primary methods, other capture technologies are under development or are designed for atmospheric CO₂ removal:

• Direct Air Capture (DAC): Unlike the methods above that target point sources, DAC technologies aim to capture CO₂ directly from the ambient air, where CO₂ concentrations are much lower (around 420 parts per million). DAC systems typically use either liquid solvents (similar to amine scrubbing but designed for lower concentrations) or solid sorbents that chemically bind with CO₂. Once saturated, the solvents/sorbents are heated or depressurized to release the concentrated CO₂. DAC holds immense potential for achieving negative emissions but is currently significantly more energy-intensive and expensive than point-source capture due to the low concentration of CO₂ in the atmosphere. Nonetheless, it is considered crucial by organizations like the IPCC for meeting stringent climate targets.
• Bioenergy with Carbon Capture and Storage (BECCS): BECCS combines the combustion or gasification of biomass (e.g., agricultural waste, dedicated energy crops) for energy production with CCS technology. As biomass grows, it absorbs CO₂ from the atmosphere. If the CO₂ released during its conversion to energy is then captured and stored, the net effect can be negative emissions, meaning CO₂ is actively removed from the atmosphere. BECCS is a powerful concept for achieving negative emissions, but its sustainable deployment is contingent on addressing concerns related to land use, biodiversity, water consumption, and the overall lifecycle emissions of biomass production and transport (Bioenergy with carbon capture and storage, n.d.).

2.2 CO₂ Compression and Transportation

Once captured, the CO₂ stream, typically at low pressure, must be compressed and transported to a suitable storage site. This phase is critical for the overall efficiency and safety of the CCS chain.

2.2.1 Compression

The captured CO₂ is compressed to a supercritical fluid state. Supercritical CO₂ (scCO₂) behaves like both a gas and a liquid, possessing gas-like diffusivity and liquid-like density. This state is achieved at temperatures above 31.1°C and pressures above 7.38 MPa (73.8 bar). Compression significantly reduces the volume of CO₂, making it much more economical and efficient to transport via pipelines. The compression process is energy-intensive, requiring multiple stages of compression with intercooling to remove the heat generated. Typical pressures for pipeline transport range from 100 to 150 bar.

2.2.2 Transportation

The most economical and widely preferred method for transporting large volumes of CO₂ over long distances is via dedicated pipelines. These pipelines are similar in construction to natural gas pipelines but require specialized materials and operational considerations due to the corrosive nature of wet CO₂ and the potential for ‘dry ice’ formation if pressure drops suddenly. Safety protocols are paramount, including leak detection systems, emergency shutdown procedures, and risk assessments for potential rupture, though CO₂ pipelines have a strong safety record globally, particularly from their use in Enhanced Oil Recovery (EOR) operations.

For situations where pipelines are not feasible or economical (e.g., offshore storage or smaller volumes), alternative transportation methods include:

• Ships: Specialized tankers can transport liquid CO₂ at low temperatures and moderate pressures, similar to LNG carriers. This method is suitable for cross-border or trans-oceanic transport to offshore storage sites.
• Trucks and Rail: For smaller, localized volumes or specialized applications, CO₂ can be transported in pressurized tanks via trucks or railcars, though this is significantly less efficient for large-scale operations.

2.3 Geological Storage: Secure Sequestration of CO₂

The final stage of CCS involves the permanent storage of the captured CO₂ in deep geological formations, preventing its release into the atmosphere. The selection of suitable storage sites is governed by stringent geological and regulatory criteria to ensure long-term containment and minimize leakage risks.

2.3.1 Site Selection Criteria

Ideal geological storage sites possess several key characteristics:

• Porosity: Sufficient void space within the rock formation to accommodate large volumes of CO₂.
• Permeability: Sufficiently interconnected pore spaces to allow for efficient injection and movement of CO₂ within the formation.
• Caprock Integrity: An overlying layer of impermeable rock (e.g., shale, salt, anhydrite) that acts as a seal, preventing the upward migration of injected CO₂. This is the most critical factor for long-term containment.
• Depth: Injection typically occurs at depths greater than 800 meters, where pressure and temperature conditions ensure CO₂ remains in its dense supercritical phase, maximizing storage capacity and minimizing buoyancy effects.
• Trapping Mechanisms: The presence of natural trapping mechanisms to secure the CO₂ over geological timescales.
• Seismicity: Low natural seismic activity and no potential for induced seismicity from injection operations.
• Proximity to Sources: Proximity to major CO₂ emission sources to minimize transportation costs and infrastructure.

2.3.2 Types of Geological Storage Formations

Several types of deep geological formations are considered suitable for CO₂ storage:

• Depleted Oil and Gas Reservoirs: These are natural traps that have securely held hydrocarbons for millions of years, demonstrating their long-term sealing capacity. The geological characteristics are well-understood from decades of oil and gas exploration and production. Existing infrastructure (wells, pipelines) can sometimes be repurposed, reducing costs. Furthermore, injecting CO₂ into depleted oil fields can sometimes enhance oil recovery (EOR), providing a revenue stream that offsets some of the CCS costs. This dual benefit is the primary driver for many operational CCS projects globally.
• Deep Saline Aquifers: These are porous rock formations saturated with brine (salty water) and are widely distributed globally, offering the largest theoretical CO₂ storage potential by far. Unlike oil and gas reservoirs, saline aquifers are not exploited for resources, thus avoiding competition for subsurface space. However, they are often less characterized geologically than hydrocarbon reservoirs, requiring extensive appraisal and monitoring to ensure containment.
• Unmineable Coal Seams: CO₂ can be adsorbed onto the surface of coal, displacing methane (CH₄) that is naturally present in coal seams. This process, known as CO₂-Enhanced Coal Bed Methane (CO₂-ECBM) recovery, can potentially provide a revenue stream by producing methane, which is a valuable fuel. However, the storage capacity in coal seams is generally lower than in saline aquifers, and the geological suitability is more constrained.

2.3.3 CO₂ Trapping Mechanisms

Once injected into a geological formation, CO₂ is immobilized and contained through several natural trapping mechanisms that operate over different timescales:

• Structural Trapping: The primary trapping mechanism, where CO₂ is physically trapped beneath an impermeable caprock within structural closures (e.g., anticlines or fault traps), similar to how oil and gas are naturally contained. This provides immediate containment upon injection.
• Residual Trapping: As CO₂ migrates through the porous rock, some of it gets trapped in the pore spaces by capillary forces, much like water clinging to a sponge. This mechanism permanently immobilizes a portion of the CO₂.
• Solubility Trapping: Over hundreds to thousands of years, CO₂ dissolves into the formation brine, forming carbonic acid. This dissolved CO₂ is no longer a separate phase and cannot easily migrate, making it a very secure form of trapping. Dissolved CO₂ increases the density of the brine, causing it to sink, further enhancing security.
• Mineral Trapping: Over even longer geological timescales (thousands to millions of years), the dissolved CO₂ can react with the minerals in the host rock to form stable carbonate minerals. This process effectively converts the CO₂ into a solid form, providing the most permanent and irreversible storage mechanism.

2.4 Monitoring, Reporting, and Verification (MRV)

Continuous and robust Monitoring, Reporting, and Verification (MRV) is an essential component of any CCS project. MRV is vital for several reasons: ensuring the integrity of the storage site, confirming that CO₂ remains securely contained, complying with regulatory requirements, building public confidence, and quantifying emissions reductions for carbon credit schemes. A comprehensive MRV program typically involves:

• Surface Monitoring: Detecting potential leakage at the surface using techniques like eddy covariance towers, ground-based gas sensors, and remote sensing (e.g., satellite imagery) to measure CO₂ concentrations in the atmosphere or soil.
• Subsurface Monitoring: Tracking the plume of injected CO₂ within the reservoir using seismic surveys (time-lapse 3D seismic), pressure and temperature sensors in observation wells, and geophysical logging tools. This helps to understand the CO₂ migration pathways and ensure it remains within the intended storage complex.
• Wellbore Integrity Monitoring: Regular inspection and testing of injection and observation wells to ensure their integrity, as wellbores are potential pathways for leakage if not properly constructed and maintained.
• Hydrogeological Monitoring: Sampling and analysis of groundwater in shallow aquifers to detect any changes in water chemistry that might indicate CO₂ leakage.
• Data Integration and Modeling: Combining monitoring data with geological models and numerical simulations to predict CO₂ plume movement and assess long-term storage performance.

MRV protocols are typically dictated by national and international regulations (e.g., the European Union’s CCS Directive, the US EPA’s Underground Injection Control (UIC) program Class VI wells), which often require monitoring for several decades after injection ceases, ensuring accountability and long-term environmental protection.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

3. Global Landscape of CCS Projects: Status and Scale

As of 2024, the global landscape of Carbon Capture and Storage projects reflects a growing, yet still nascent, industry characterized by a mix of operational facilities, those under construction, and a substantial pipeline of projects in various stages of development. The Global CCS Institute reports that there are approximately 44 commercial-scale CCS facilities currently operational worldwide, collectively capturing around 45 million tonnes of CO₂ annually (Global CCS Institute, 2024, Status Report, precise reference added for detail). This capacity, while significant, represents only a fraction of the emissions that require abatement to meet global climate targets. These projects are predominantly concentrated in regions with large industrial emissions, supportive policy frameworks, and suitable geological storage sites, notably North America, Europe, China, and Australia.

3.1 Key Operational and Under-Development Projects

Several pioneering and large-scale CCS projects illustrate the technology’s application and potential:

• Boundary Dam Project (Canada): Located in Saskatchewan, Canada, the Boundary Dam Carbon Capture and Storage Project, commissioned in 2014, is one of the world’s first commercial-scale CCS facilities retrofitted to a coal-fired power plant. It captures approximately 1 million tonnes of CO₂ annually from Unit 3 of the SaskPower Boundary Dam Power Station. The captured CO₂ is primarily used for enhanced oil recovery (EOR) in nearby oil fields, which also provides a revenue stream. The project has demonstrated the technical feasibility of post-combustion capture on a large scale from a coal plant, though it has also faced challenges related to operational reliability and cost, providing invaluable lessons learned for subsequent projects.

• Gorgon Project (Australia): Situated off the coast of Western Australia, the Gorgon Carbon Dioxide Injection Project is one of the world’s largest CCS projects, integrated with a liquefied natural gas (LNG) processing facility. This project captures CO₂ from natural gas extracted from the Gorgon and Jansz-Io gas fields, where CO₂ content is naturally high (up to 14%). Commencing CO₂ injection in 2019, the project is designed to inject 3.4 to 4 million tonnes of CO₂ annually into a deep saline aquifer (the Dupuy Formation) approximately 2.5 kilometers beneath Barrow Island. Despite its massive scale and innovative application, the Gorgon Project has faced criticism for delays and underperformance relative to its initial capture targets, highlighting the complexities of managing large-scale geological storage operations.

• Net Zero Teesside Power Project (United Kingdom): This ambitious project, a collaborative effort involving major energy companies including BP, Equinor, and TotalEnergies, aims to develop a 742 MW gas-fired power plant integrated with CCS technology in Teesside, UK (Reuters, 2024, ‘Equinor, BP, TotalEnergies seal investment into Britain’s carbon capture projects’). This facility is designed to capture and store approximately 2 million tonnes of CO₂ annually. It forms a crucial part of the East Coast Cluster, one of the UK’s first carbon capture, utilization, and storage (CCUS) industrial clusters. The Teesside project exemplifies a ‘cluster’ approach, where multiple industrial emitters in a concentrated geographical area share common CO₂ transport and storage infrastructure, leading to economies of scale and reduced overall costs. This initiative is pivotal to the UK’s strategic objective of achieving net-zero emissions by 2050 (GE Vernova, n.d.). The UK government has also committed to providing compensation to developers if the project faces legal challenges that hinder its progress, underscoring its strategic importance (Financial Times, 2024, ‘UK to compensate developers if £8bn gas plant project is blocked by court’).

• Northern Lights Project (Norway): Part of Norway’s ‘Longship’ full-scale CCS project, Northern Lights is an open-source CO₂ transport and storage infrastructure project designed to receive captured CO₂ from industrial emitters across Europe. The project, backed by Equinor, Shell, and TotalEnergies, will transport captured CO₂ by ship from capture sites to an onshore receiving terminal in western Norway, then via pipeline to an offshore storage complex in the North Sea (the Johansen Formation) more than 2,600 meters below the seabed. It aims to have an initial capacity of 1.5 million tonnes of CO₂ per year, with plans for expansion to 5-6 million tonnes. This project is significant for establishing cross-border CO₂ transport and storage solutions.

• Projects in the United States: The U.S. has a growing number of CCS projects, significantly bolstered by policy incentives such as the 45Q tax credit. Examples include the Petra Nova Carbon Capture Project in Texas (temporarily idled), which captured CO₂ from a coal-fired power plant for EOR, and numerous proposed projects focused on decarbonizing ethanol production, natural gas processing, and industrial facilities in the Gulf Coast region and Midwest. The Infrastructure Investment and Jobs Act (2021) and the Inflation Reduction Act (IRA, 2022) have substantially enhanced the 45Q tax credit, providing a strong financial incentive for CCS deployment, increasing the credit value to $85/tonne for saline storage and $60/tonne for EOR (Reuters, 2025, ‘US carbon capture storage hit by inflation, Trump’).

3.2 The Emergence of CCS Hubs and Clusters

A significant trend in global CCS deployment is the development of industrial ‘hubs’ or ‘clusters.’ Instead of each industrial facility developing its own capture, transport, and storage infrastructure, multiple emitters within a geographical proximity share common CO₂ pipelines and access to a centralized storage site. This approach offers several advantages:

• Economies of Scale: Centralized infrastructure reduces the per-tonne cost of CO₂ transport and storage.
• Risk Sharing: Spreading the financial and operational risk across multiple projects and partners.
• Industrial Symbiosis: Facilitating the integration of various industrial processes, potentially enabling cross-sectoral decarbonization.
• Reduced Footprint: Minimizing the environmental and land-use impact compared to scattered, individual projects.

Examples like the Teesside and Humber clusters in the UK, the Northern Lights project in Norway, and proposed hubs in the U.S. Gulf Coast demonstrate this strategic shift towards integrated regional CCS networks, which are crucial for achieving the scale of deployment required for meaningful climate impact.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

4. Economic Viability, Policy Frameworks, and Investment Challenges

The economic viability of Carbon Capture and Storage projects is a complex interplay of high upfront capital costs, ongoing operational expenses, potential revenue streams, and the critical influence of supportive government policies and market mechanisms. Understanding these factors is paramount to assessing CCS’s broader role in climate mitigation.

4.1 Capital Investment and Operational Costs

Establishing a full-chain CCS infrastructure, from capture plants to pipelines and injection wells, requires substantial upfront capital investment. For large-scale projects, these costs can range from hundreds of millions to several billions of dollars. The exact capital expenditure varies significantly depending on the capture technology (post-combustion retrofit vs. new build pre-combustion), the scale of the facility, the distance to storage sites, and the specific geological characteristics of the storage reservoir.

Beyond the initial investment, operational costs (OpEx) are a significant factor. The ‘energy penalty’ associated with CO₂ capture, compression, and transportation is a primary contributor to OpEx. For instance, post-combustion capture processes, particularly amine scrubbing, require significant amounts of energy (often in the form of steam) for solvent regeneration. This energy demand can lead to a substantial reduction in the net power output of a power plant or increased fuel consumption. As previously noted, coal-fired power plants with CCS may need to burn 14–40% more coal to produce the same amount of electricity as an equivalent plant without CCS (Carbon capture and storage, n.d.). This directly impacts the levelized cost of electricity (LCOE) or the cost of products from industrial facilities, making CCS-equipped operations less competitive without financial support.

Other operational costs include:

• Maintenance of capture equipment, pipelines, and wells.
• Consumption of chemicals (e.g., amine make-up in absorption processes).
• Monitoring, Reporting, and Verification (MRV) activities.
• Staffing and administrative overhead.

These high costs have historically been a major barrier to widespread CCS deployment, especially when compared to the rapidly falling costs of renewable energy technologies.

4.2 Revenue Streams and Carbon Utilization (CCU)

To improve economic viability, CCS projects often seek to generate revenue. The most established revenue stream for captured CO₂ is its use in Enhanced Oil Recovery (EOR).

• Enhanced Oil Recovery (EOR): In CO₂-EOR, captured CO₂ is injected into mature oil fields to increase oil recovery beyond what is achievable with primary or secondary methods. The CO₂ reduces the oil’s viscosity and sweeps it towards production wells. While EOR provides a commercial incentive for CCS, critics argue that it prolongs fossil fuel extraction and consumption, which may not align with long-term climate objectives (Carbon capture and storage, n.d.). Despite this ethical debate, a majority of captured CO₂ globally has historically been used for EOR, reflecting its economic attractiveness.

Beyond EOR, Carbon Capture Utilization (CCU) explores other pathways to transform CO₂ into valuable products, though these are generally less mature and often involve lower volumes of CO₂ than geological storage:

• Chemicals: CO₂ can be used as a feedstock for producing chemicals such as urea (for fertilizers), methanol, and polymers.
• Building Materials: CO₂ can be mineralized and incorporated into concrete and other building materials, potentially providing long-term storage and reducing the carbon footprint of construction.
• Synthetic Fuels: CO₂ can be combined with hydrogen (produced from renewable electricity or other low-carbon sources) to synthesize fuels like methane, methanol, or synthetic crude oil. This offers a pathway for decarbonizing hard-to-electrify sectors like aviation or shipping, though the overall energy efficiency of such processes is a consideration.
• Food and Beverages: CO₂ is used in carbonated drinks, dry ice production, and in greenhouses to enhance plant growth.

While CCU offers intriguing possibilities for value creation, it is crucial to distinguish between ‘utilization’ and ‘permanent storage.’ Many CCU applications result in the eventual release of CO₂ back into the atmosphere (e.g., burning synthetic fuels, decomposition of urea), meaning they do not provide permanent carbon sequestration. Only applications that permanently sequester CO₂ (e.g., mineralizing it into building materials) contribute to long-term climate mitigation.

4.3 Policy and Incentives: Driving Force for Deployment

Government policies and financial incentives are arguably the most critical determinants of CCS deployment. Given the high costs and lack of inherent market value for CO₂ storage (unless coupled with EOR or highly valued utilization), policy support is essential to bridge the economic gap and de-risk investments.

• Tax Credits: The U.S. 45Q tax credit for CCS is a prime example. Originally introduced in 2008 and significantly expanded by the Bipartisan Infrastructure Law (2021) and the Inflation Reduction Act (IRA) of 2022, 45Q provides a tax credit per tonne of CO₂ captured and stored or utilized. The IRA increased the credit to $85 per tonne for CO₂ permanently stored in saline geological formations and $60 per tonne for CO₂ used in EOR or other beneficial utilization pathways. This substantial increase has reinvigorated interest in CCS projects across the U.S., addressing a major financial barrier (Reuters, 2025, ‘US carbon capture storage hit by inflation, Trump’). The stability and attractiveness of these incentives are, however, subject to political uncertainties and future policy changes, as noted by Reuters (2025).

• Grants and Subsidies: Many governments and international bodies offer direct grants or low-interest loans to support research, development, and commercial deployment of CCS projects. For instance, the European Union’s Innovation Fund provides financial support for innovative low-carbon technologies, including CCS.

• Carbon Pricing Mechanisms: The imposition of a carbon price (via carbon taxes or emissions trading schemes like the EU ETS) creates an economic incentive for emitters to reduce CO₂ emissions. As the carbon price rises, CCS becomes more competitive compared to emitting CO₂ and paying for carbon allowances. However, carbon prices globally have often been too low or too volatile to drive significant CCS investment on their own.

• Regulatory Frameworks: Clear and stable regulatory frameworks for CO₂ storage (permitting, liability, MRV requirements) are essential to provide certainty for investors and ensure environmental integrity. The absence or fragmentation of such frameworks can deter investment.

• Public-Private Partnerships: Many large-scale CCS projects involve collaboration between government entities and private companies, sharing risks and leveraging public funding to catalyze private investment.

4.4 Investment Challenges and Future Outlook

Despite the policy support, CCS projects face significant investment challenges:

• Project Specificity and Customization: Each CCS project is highly customized to its emission source and geological storage site, making standardization difficult and increasing development costs and timelines.
• Long Project Development Cycles: From feasibility studies to final commissioning, large-scale CCS projects can take a decade or more to develop, requiring long-term financial commitments and stable policy environments.
• Risk Perception: Investors often perceive high financial and geological risks associated with CCS, particularly around long-term storage liability and the uncertainty of future carbon prices.
• Infrastructure Gaps: The lack of existing CO₂ transport infrastructure (pipelines) necessitates significant upfront investment in new networks, particularly for industrial clusters.

Addressing these challenges requires continued policy stability, innovative financing mechanisms, and sustained technological advancements to drive down costs and improve efficiency. The global increase in CCS projects in the development pipeline suggests a growing confidence, spurred by more robust policy incentives and a clearer understanding of CCS’s role in achieving net-zero goals.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

5. Environmental and Societal Implications Beyond CO₂ Sequestration

While the primary objective of CCS is to mitigate atmospheric CO₂ concentrations, a comprehensive assessment necessitates a thorough examination of its broader environmental and societal impacts. These considerations extend beyond direct carbon capture to encompass the entire CCS value chain, from energy consumption and resource demands to potential ecological disturbances and public acceptance.

5.1 Energy Consumption and Efficiency Penalties

One of the most significant environmental considerations of CCS is the substantial energy required for its operation, often referred to as the ‘energy penalty’ or ‘parasitic load.’ Capturing CO₂, compressing it to a supercritical state, and transporting it are all energy-intensive processes. For power generation, this means that a power plant equipped with CCS will consume more fuel to produce the same amount of net electricity as a plant without CCS. This leads to:

• Increased Primary Energy Demand: As highlighted earlier, coal-fired power plants with CCS may require 14–40% more coal, and natural gas combined cycle plants can see a 10-25% increase in fuel consumption. This translates to higher resource extraction (e.g., more coal or natural gas mining/drilling) and associated environmental impacts.
• Indirect Emissions: If the additional energy required for CCS operations is sourced from fossil fuels, it can partially offset the emission reductions achieved by the capture process. This necessitates that the energy used for CCS be low-carbon or renewable to maximize the net climate benefit. The net CO₂ reduction typically ranges from 85-95% for a full CCS chain, but this figure accounts for the increased energy use.
• Reduced Overall Efficiency: The additional energy consumption for CCS components lowers the net efficiency of the power plant or industrial facility. This efficiency reduction can impact economic viability and the overall energy system’s effectiveness.

5.2 Water Usage

Many CCS processes, particularly those involving chemical absorption in power plants, can result in increased water consumption. Amine-based capture systems, for example, require water for cooling, steam generation for solvent regeneration, and solvent make-up due to evaporation or degradation. This additional water demand can be substantial:

• Cooling Water: The heat generated during absorption and compression processes requires significant cooling, often reliant on water-based cooling systems.
• Steam Generation: Regeneration of amine solvents requires considerable amounts of steam, which demands significant quantities of demineralized water.
• Solvent Make-up: While minimized, there can be some loss of solvent or degradation products that need to be replenished, often requiring water for solution preparation.

In regions already experiencing water stress or scarcity, the increased water footprint of CCS facilities could pose significant challenges, potentially impacting local ecosystems, agriculture, or drinking water supplies. Careful site selection and the implementation of water-efficient technologies (e.g., air cooling, wastewater recycling) are critical to mitigate this impact.

5.3 Potential for Leakage and Induced Seismicity

While geological storage aims for permanent containment, the potential for CO₂ leakage from storage sites is a widely discussed environmental concern. This risk, though extensively researched and deemed manageable by scientific consensus, needs to be thoroughly addressed:

• Leakage Pathways: Potential leakage could occur through poorly abandoned wells (legacy oil and gas wells), undetected faults or fractures in the caprock, or caprock failure due to excessive pressure. CO₂ is naturally buoyant in a reservoir, so its tendency is to migrate upwards if pathways exist.
• Environmental Consequences of Leakage: Significant leakage could undermine the effectiveness of CCS in reducing atmospheric CO₂ concentrations. In high concentrations, CO₂ can displace oxygen, posing an asphyxiation risk in confined spaces. It can also acidify shallow groundwater, potentially mobilizing heavy metals or impacting freshwater ecosystems. However, scenarios of catastrophic large-scale leakage are considered highly improbable given the geological depths and multiple trapping mechanisms, but small, diffuse leaks are a more plausible, though still low-probability, concern.

• Mitigation and Monitoring: Rigorous site selection based on extensive geological characterization, careful injection pressure management, and continuous, comprehensive monitoring programs (as detailed in Section 2.4) are critical to detect and mitigate any potential leakage risks. Experience from natural CO₂ reservoirs and existing EOR operations provides confidence in long-term containment.

• Induced Seismicity: The injection of large volumes of fluid into deep geological formations can sometimes induce minor seismic events (earthquakes), a phenomenon observed in some oil and gas production and geothermal operations. While most induced seismicity is too small to be felt at the surface, larger events could potentially damage infrastructure or impact public perception. The risk of significant induced seismicity from CO₂ injection is generally considered low compared to wastewater disposal, as CO₂ injection typically occurs below fracture pressures. However, careful geological characterization, pre-injection seismic monitoring, and real-time pressure management are essential to minimize this risk, especially near active faults.

5.4 Local Environmental Impacts and Public Perception

Beyond the broader issues, CCS projects can have localized environmental and societal impacts:

• Land Use: The construction of capture facilities, compression stations, pipeline corridors, and well pads requires land, which can lead to habitat fragmentation or impact agricultural areas. While pipelines are typically buried, surface infrastructure has a footprint.
• Air Quality: While CCS targets CO₂ emissions, the capture process itself can sometimes release trace amounts of other substances. For example, amine-based capture systems can have minor atmospheric emissions of degradation products (e.g., ammonia, aldehydes) if not properly controlled, which could affect local air quality. Strict permitting and emission controls are necessary to manage these.
• Public Perception and Acceptance (Social License to Operate): Public understanding and acceptance of CCS are crucial for its successful deployment. Concerns often arise regarding safety (leakage, induced seismicity), environmental justice (locating projects near marginalized communities), and the perception that CCS prolongs reliance on fossil fuels. Effective stakeholder engagement, transparent communication, and demonstrating a strong safety record are vital for building public trust and securing the ‘social license to operate.’ Resistance from local communities, often termed ‘Not In My Backyard’ (NIMBY) syndrome, can delay or derail projects.

In summary, while CCS offers a pathway to deep decarbonization, its implementation requires careful consideration of potential trade-offs. A holistic approach that integrates robust environmental impact assessments, continuous monitoring, and proactive public engagement is essential to ensure that CCS contributes positively to climate goals without creating unacceptable environmental or social burdens.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

6. CCS in the Broader Climate Mitigation Landscape: Debates and Future Role

The role of Carbon Capture and Storage within the broader global climate mitigation landscape is a subject of intense and ongoing debate among policymakers, environmental groups, academics, and industry stakeholders. While widely recognized as a necessary tool by major international climate bodies, its specific contribution, scale, and strategic positioning remain contentious.

6.1 Technological Maturity and Scalability

Critics often argue that despite decades of research and development, CCS technologies are not yet sufficiently mature for widespread, rapid deployment at the scale required to significantly impact global emissions. They point to the limited number of operational commercial-scale projects compared to the vast number of fossil fuel-fired power plants and industrial facilities that would need to be retrofitted. The Associated Press noted the ongoing debate about whether CCS is ‘a future climate solution’ (Associated Press, 2025, ‘How carbon capture works…’).

• Proponents’ Counter-Argument: Supporters contend that core CCS components (capture, transport, storage) are well-understood and have been applied individually in other industrial contexts for decades (e.g., natural gas processing, EOR). The challenge lies in integrating them into a full, commercial-scale chain, which is a complex engineering feat but not fundamentally unproven. They emphasize that the technology is past the R&D stage and is now in the early stages of commercial deployment, poised for rapid scale-up with appropriate policy support. The Global CCS Institute’s reports illustrate a robust project pipeline, indicating accelerating maturity and deployment.

6.2 Cost-Effectiveness and Resource Allocation

The high capital and operational costs associated with CCS projects are a central point of contention. Critics argue that these substantial investments could divert financial and political resources away from more cost-effective and proven renewable energy technologies (solar, wind) and energy efficiency measures, potentially slowing down the overall transition to a sustainable energy future. The Financial Times highlighted the cost debate, noting it’s a key factor in ‘Climate tech explained: carbon capture and removal’ (Financial Times, 2024).

• Proponents’ Counter-Argument: Proponents argue that comparing CCS costs directly with renewables is an oversimplification. CCS is primarily intended for sectors where renewables face significant limitations, such as heavy industry (cement, steel, chemicals) and baseload power generation that requires firm capacity. Decarbonizing these ‘hard-to-abate’ sectors through alternative means (e.g., green hydrogen, direct electrification) is often even more expensive or not yet technologically feasible at scale. Therefore, CCS is seen as a complementary, rather than competing, technology that broadens the portfolio of climate solutions. Furthermore, with policy support (like the U.S. 45Q tax credit) and economies of scale from cluster development, CCS costs are expected to decrease, making it more competitive.

6.3 Policy Implications and Perceived Perpetuation of Fossil Fuels

Perhaps the most vigorous debate centers on the policy implications of promoting CCS. A significant concern among environmental groups is that widespread reliance on CCS could inadvertently perpetuate dependence on fossil fuels. The argument is that by offering a ‘solution’ to emissions from fossil fuel combustion, CCS might disincentivize the fundamental shift away from coal, oil, and natural gas, thus locking in high-carbon infrastructure for decades. The Associated Press raised this point, asking ‘What is carbon capture and how much of a solution is it after COP28?’ (Associated Press, 2024).

• Proponents’ Counter-Argument: Supporters of CCS emphasize its necessity for sectors that cannot easily switch away from fossil fuels or process emissions. For instance, cement production inherently releases CO₂ from the calcination of limestone, regardless of the energy source. Steel production, chemical manufacturing, and the production of hydrogen from natural gas are other examples where process emissions are significant or where deep decarbonization without CCS is highly challenging or prohibitively expensive today. CCS offers a pragmatic pathway to decarbonize these industries while maintaining economic activity and employment. They also highlight the role of CCS in natural gas power generation, which can provide dispatchable power to complement intermittent renewables, ensuring grid stability in a decarbonizing energy system.

6.4 The Role in Net-Zero and Negative Emissions Scenarios

Major climate assessment bodies, including the IPCC and the International Energy Agency (IEA), consistently incorporate CCS into most pathways for achieving global net-zero emissions targets by mid-century. This underscores the perceived necessity of CCS, especially for:

• Hard-to-Abate Sectors: Industrial processes (cement, steel, chemicals), where CO₂ is a byproduct of the chemical reaction, not just fuel combustion.
• Flexible Power Generation: Enabling low-carbon fossil fuel-based power that can provide reliable, dispatchable electricity when renewable sources are unavailable.
• Negative Emissions: When combined with bioenergy (BECCS) or Direct Air Capture (DAC), CCS becomes a crucial technology for actively removing CO₂ from the atmosphere. Many climate models indicate that achieving 1.5°C targets will likely require significant negative emissions to compensate for historical emissions and any remaining hard-to-abate emissions.

6.5 Ethical Considerations and Just Transition

The deployment of large-scale infrastructure like CCS also raises ethical and social justice concerns. Questions arise about:

• Environmental Justice: Are CCS facilities and storage sites disproportionately located near marginalized communities, increasing their environmental burden?
• Intergenerational Equity: Does relying on CCS shift the burden of managing long-term storage risks to future generations?
• Impact on Fossil Fuel Workers: While CCS can help retain jobs in the fossil fuel industry by decarbonizing operations, a broader energy transition implies shifts in the workforce. Ensuring a ‘just transition’ for workers and communities traditionally reliant on fossil fuels is critical, whether through retraining for renewable energy jobs or re-skilling for CCS-related roles.

6.6 Looking Ahead: Integration and Innovation

Future developments in CCS are likely to focus on:

• Cost Reduction: Continued innovation in capture technologies (e.g., novel solvents, solid sorbents, membranes, enzyme-based systems) to reduce energy penalty and capital costs.
• Integration with Hydrogen Economy: CCS is a key enabler for ‘blue hydrogen’ production (hydrogen from natural gas with CCS), providing a low-carbon bridge fuel as green hydrogen (from renewable electrolysis) scales up.
• Industrial Cluster Development: The focus on shared infrastructure will likely accelerate, reducing per-tonne costs and improving economic viability.
• Direct Air Capture (DAC) Scale-Up: As DAC technologies mature and become more cost-effective, they will play an increasing role in achieving net-negative emissions.
• International Cooperation: Cross-border collaboration on transport and storage infrastructure (e.g., North Sea projects) will be essential for large-scale deployment.

In conclusion, the debate surrounding CCS is not simply about its technical feasibility, which is largely established, but rather its strategic role, cost-effectiveness relative to other solutions, and potential policy implications. A balanced perspective recognizes CCS as an important part of a diversified portfolio of climate solutions, particularly for sectors difficult to decarbonize otherwise, while simultaneously prioritizing rapid deployment of renewables and energy efficiency measures. Its success will depend on continued technological innovation, robust policy support, and effective stakeholder engagement to build public trust.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

7. Conclusion

Carbon Capture and Storage (CCS) represents a significant technological pathway for mitigating anthropogenic climate change by intercepting and sequestering carbon dioxide emissions from large point sources. This detailed examination has traversed the multifaceted landscape of CCS, encompassing its distinct capture methodologies (post-combustion, pre-combustion, oxy-fuel combustion, and emerging technologies like DAC and BECCS), the intricate engineering processes of compression, transportation, and secure geological storage, and the critical importance of rigorous monitoring, reporting, and verification protocols.

Global deployment of CCS is accelerating, with numerous commercial-scale projects operational and a substantial pipeline under development across North America, Europe, Asia, and Australia. Landmark initiatives such as the Boundary Dam Project, Gorgon Project, and the ambitious Net Zero Teesside Power Project exemplify the technical feasibility and growing scale of CCS applications, often leveraging the economic synergy with Enhanced Oil Recovery (EOR) or forming integrated industrial clusters to achieve economies of scale.

However, the widespread adoption of CCS is contingent upon navigating substantial challenges. The economic viability is significantly influenced by considerable capital investments, the inherent energy penalty associated with capture processes (which elevates operational costs and can increase fuel consumption), and the need for robust revenue streams, whether from EOR or nascent Carbon Capture Utilization (CCU) pathways. Crucially, sustained governmental policies, including tax credits (such as the U.S. 45Q) and grants, coupled with effective carbon pricing mechanisms, remain indispensable drivers for de-risking projects and stimulating private investment. Political uncertainty and policy instability, however, continue to pose significant hurdles to long-term investment commitments.

Beyond its primary function of CO₂ abatement, CCS entails broader environmental and societal considerations. The increased energy consumption and associated water usage for capture processes necessitate careful resource management. While geological storage is designed for permanent sequestration, the potential for CO₂ leakage and induced seismicity, though thoroughly researched and deemed manageable with proper site selection and monitoring, demands continuous vigilance and transparent communication. Furthermore, issues of local environmental impact, land use, and, critically, public perception and acceptance require proactive engagement to secure the ‘social license to operate.’

Ultimately, the role of CCS in achieving global net-zero emissions targets is a subject of ongoing, vigorous debate. Critics voice concerns regarding technological maturity, high costs potentially diverting investment from renewables, and the risk of perpetuating fossil fuel dependence. Conversely, proponents assert CCS’s indispensable role in decarbonizing ‘hard-to-abate’ industrial sectors, providing flexible low-carbon power, and achieving negative emissions through BECCS and DAC, capabilities often deemed necessary by major climate models. This report posits that CCS is not a panacea but a vital component within a comprehensive and diversified portfolio of climate solutions.

Achieving deep decarbonization and climate stability necessitates a multi-pronged approach that strategically integrates CCS where it offers the most effective or unique contribution. This includes aggressive efforts to accelerate the global deployment of renewable energy sources, enhance energy efficiency across all sectors, and drive innovation in other disruptive clean technologies. A balanced, technologically agnostic strategy that leverages the strengths of CCS while rigorously addressing its limitations, environmental impacts, and societal implications is essential for constructing a resilient, sustainable, and effective global response to climate change.

Many thanks to our sponsor Focus 360 Energy who helped us prepare this research report.

References

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