Case study: CO2 utilization pathways (mineralization, fuels, chemicals) — a city or utility pilot and the results so far

Carbon capture technology has advanced rapidly, but capture alone does not close the economic loop. Transforming captured CO2 into commercially valuable products through mineralization, synthetic fuels, and chemical feedstocks represents one of the most promising pathways to make carbon management financially self-sustaining. The challenge has always been demonstrating these pathways at scale, with real economics, in real operating environments. A series of utility and municipal pilots across emerging markets now provides concrete evidence of what works, what fails, and what the numbers actually look like when CO2 utilization moves from laboratory demonstration to commercial reality.

Why It Matters

Global CO2 utilization capacity reached approximately 230 million tonnes per year in 2025, but the vast majority of that volume serves enhanced oil recovery, a use case with dubious net climate benefit. Non-EOR utilization, including mineralization into building materials, conversion to synthetic fuels, and transformation into chemical intermediates, accounted for only 15-20 million tonnes annually. The gap between technical potential and deployed capacity reflects persistent economic challenges: most CO2 utilization pathways require energy inputs, catalytic infrastructure, and concentrated CO2 streams that collectively push production costs above conventional alternatives.

For emerging markets, the calculus differs from developed economies in critical ways. Many emerging market nations have cement and concrete industries that represent 5-8% of national GDP, creating natural demand for mineralized CO2 products. Fuel import dependence makes synthetic fuel production strategically attractive even at cost premiums. And the growing carbon border adjustment mechanisms in Europe and North America create compliance pressure that makes CO2 utilization investments partially defensive. The International Energy Agency estimated in 2025 that emerging market CO2 utilization investment could reach $12-18 billion annually by 2030 if pilot results demonstrate commercially viable pathways.

Regulatory momentum is accelerating. The European Union's Carbon Border Adjustment Mechanism (CBAM), fully operational from 2026, applies to cement, steel, aluminum, fertilizers, electricity, and hydrogen imports. For emerging market exporters in these sectors, demonstrating CO2 utilization in production processes directly reduces CBAM liability. India's carbon credit trading scheme, launched in 2023, now covers over 300 industrial facilities and creates financial incentives for CO2 utilization that did not exist three years ago. South Africa's carbon tax, increasing to ZAR 462 per tonne by 2026, makes mineralization pathways increasingly competitive against conventional cement production.

Pilot Design and Context

Ras Al Khair Industrial City, Saudi Arabia: CO2 to Building Materials

Saudi Arabia's Ras Al Khair Industrial City launched one of the most ambitious CO2 mineralization pilots in any emerging market in 2023, operated through a partnership between Saudi Aramco, SABIC, and the Royal Commission for Jubail and Yanbu. The pilot captures CO2 from a natural gas processing facility and mineralizes it into calcium and magnesium carbonates used as supplementary cementitious materials (SCMs) and aggregates for concrete production.

The facility processes 500 tonnes of CO2 per day from a concentrated stream (approximately 85% CO2 by volume) produced during gas sweetening operations. The mineralization reactor uses a proprietary accelerated carbonation process developed by Carbon Upcycling Technologies, adapted for the extreme heat conditions of the Gulf region where ambient temperatures regularly exceed 45 degrees Celsius. The process reacts CO2 with industrial waste streams, primarily steel slag from the adjacent HADEED steel facility and desalination brine from the Ras Al Khair desalination plant, the world's largest.

Design choices reflected local conditions. The co-location strategy eliminated CO2 transport costs by siting the mineralization unit within 2 kilometers of both the CO2 source and the waste feedstock sources. The decision to use desalination brine, an environmental liability that Saudi Arabia produces at over 30 million cubic meters per day, converted a waste disposal cost into a feedstock advantage. Magnesium-rich brine reacts exothermically with CO2, reducing the energy penalty that plagues many mineralization approaches.

Tata Chemicals, Mithapur, India: CO2 to Soda Ash and Precipitated Calcium Carbonate

Tata Chemicals operates a CO2 utilization facility at its Mithapur complex in Gujarat, India, that has been scaling since 2021. The plant captures CO2 from soda ash production flue gas and converts it into precipitated calcium carbonate (PCC), baking soda, and food-grade CO2. While not a pure municipal pilot, the facility operates within the Mithapur industrial township that Tata manages as a de facto municipal authority for 40,000 residents, making it functionally equivalent to a city-scale deployment.

The system captures approximately 60,000 tonnes of CO2 annually. The captured CO2 feeds three utilization pathways simultaneously: 35% goes to PCC production for paper, paint, and plastics industries; 40% converts to sodium bicarbonate for food and pharmaceutical applications; and 25% is purified to food-grade quality for the beverage industry. This diversified offtake strategy was a deliberate design choice, providing revenue stability regardless of price fluctuations in any single product market.

Secunda, South Africa: CO2 to Synthetic Fuels via Fischer-Tropsch

Sasol's operations at Secunda represent the world's largest single-point CO2 emitter, releasing approximately 56 million tonnes annually from coal-to-liquids production. In partnership with the South African Department of Science and Innovation and the Council for Scientific and Industrial Research (CSIR), a pilot facility has been operating since 2024 to convert a fraction of this CO2 into sustainable aviation fuel (SAF) using green hydrogen produced from a 10 MW electrolyzer powered by dedicated solar capacity.

The pilot produces approximately 1,500 litres of SAF per day through a reverse water-gas shift reaction followed by Fischer-Tropsch synthesis. While this volume is negligible relative to Secunda's total emissions, the pilot serves as a technology demonstration for a planned 200 MW expansion that would produce 50,000 tonnes of SAF annually by 2029. The green hydrogen is produced using a proton exchange membrane (PEM) electrolyzer supplied by Nel Hydrogen, with electricity from a 15 MW solar array co-located on Sasol's industrial land.

Measured Outcomes

Ras Al Khair Results

After 18 months of operation, the Ras Al Khair pilot has mineralized approximately 165,000 tonnes of CO2, achieving an average utilization rate of 92% of captured CO2. The mineralized products meet ASTM C618 and C1240 standards for supplementary cementitious materials, enabling direct substitution of 15-25% of ordinary Portland cement in concrete mixes without compromising compressive strength.

Economic performance has exceeded initial projections. The cost of CO2 mineralization, including capture, reaction, and product processing, averages $38-42 per tonne of CO2. Revenue from SCM sales to regional concrete producers generates $18-22 per tonne of product, while avoided desalination brine disposal costs contribute an additional $8-12 per tonne of brine processed. The net cost of CO2 abatement, after product revenues and avoided costs, is $12-16 per tonne, substantially below Saudi Arabia's implicit carbon pricing under its Vision 2030 industrial framework.

Concrete produced with the mineralized SCMs shows 8-12% lower embodied carbon than conventional mixes while maintaining 28-day compressive strengths of 35-42 MPa, meeting requirements for most structural applications. Independent testing by KAUST (King Abdullah University of Science and Technology) confirmed that durability characteristics including sulfate resistance and chloride penetration resistance either match or exceed conventional concrete, an important finding for Gulf construction where chloride-induced corrosion is the primary deterioration mechanism.

Tata Chemicals Results

The Mithapur facility achieved 97% uptime in 2025, capturing and utilizing 58,200 tonnes of CO2. PCC product quality meets ISO 19749 specifications for paper coating grades, commanding price premiums of 15-20% over ground calcium carbonate alternatives. The food-grade CO2 stream achieves 99.995% purity, meeting International Society of Beverage Technologists (ISBT) standards without additional polishing.

Financial performance shows blended product revenues of $85-110 per tonne of CO2 utilized, against total operating costs of $45-55 per tonne. The resulting operating margin of $35-60 per tonne of CO2 makes this one of the few CO2 utilization operations globally that generates positive returns without carbon credit revenues. When carbon credits under India's carbon trading scheme are included at current prices of approximately $8-12 per tonne, unit economics improve further.

The diversified offtake strategy proved its value during 2025 when PCC demand softened due to a slowdown in India's paper industry. Tata shifted additional CO2 volume to sodium bicarbonate and food-grade pathways, maintaining overall utilization rates above 90%. This operational flexibility is difficult to achieve in single-product CO2 utilization facilities and represents a key lesson for future project designs.

Secunda SAF Pilot Results

The Fischer-Tropsch SAF pilot has operated for 14 months, producing approximately 490,000 litres of synthetic jet fuel. The fuel meets ASTM D7566 Annex A1 specifications for Fischer-Tropsch synthetic paraffinic kerosene, qualifying for blending with conventional jet fuel at up to 50% by volume.

However, the economics remain challenging. The production cost of SAF at the pilot scale is approximately $4.80-5.20 per litre, compared to $0.85-1.10 for conventional jet fuel in South African markets. The primary cost driver is green hydrogen at $6.50-8.00 per kilogram from the PEM electrolyzer, which accounts for 55-65% of total SAF production costs. Electrolyzer utilization is limited to approximately 2,200 full-load hours per year due to solar intermittency, well below the 4,000+ hours needed for favorable hydrogen economics.

The planned 200 MW expansion incorporates several design improvements informed by pilot learnings: hybrid solar-wind generation to increase electrolyzer utilization to 3,800+ hours; solid oxide electrolyzer cells (SOECs) replacing PEM units for 15-20% efficiency gains; and waste heat integration with the existing Sasol complex to provide the thermal energy for reverse water-gas shift reactions, eliminating an electric heating cost that consumes 12% of pilot-scale energy inputs.

Key Lessons and Transferable Insights

Co-location and Industrial Symbiosis Are Non-Negotiable

All three pilots demonstrate that CO2 utilization economics depend critically on co-location with both CO2 sources and feedstock or energy inputs. The Ras Al Khair pilot's success rests largely on eliminating transport costs and converting waste streams (brine and slag) into productive inputs. Standalone CO2 utilization facilities that must purchase and transport feedstocks face cost structures 40-60% higher than integrated operations.

Product Market Diversification Reduces Risk

Tata's multi-product strategy outperformed single-pathway approaches by providing demand hedging. Projects planning CO2 utilization should design for at least two independent product markets, even if this increases initial capital expenditure by 15-25%. The revenue stability justifies the added complexity.

Mineralization Outperforms Fuels on Current Economics

Across the three pilots, mineralization pathways achieve net CO2 abatement costs of $12-42 per tonne, while e-fuel pathways cost $350-500 per tonne of CO2 abated. This differential reflects the thermodynamic reality that mineralization is exothermic (releasing energy) while fuel synthesis is endothermic (requiring energy). Until green hydrogen costs fall below $2.50 per kilogram, fuel pathways will require policy support to compete.

Emerging Market Advantages Are Real but Specific

Lower labor costs (30-50% below OECD averages for plant operations), abundant renewable energy resources, and growing domestic demand for construction materials create genuine advantages for CO2 mineralization in emerging markets. However, these advantages do not extend equally to all pathways. E-fuel production requires grid-scale renewable energy and electrolyzer supply chains that remain concentrated in Europe, China, and North America, creating import dependencies that partially offset emerging market cost advantages.

Regulatory Compliance Creates Demand Pull

CBAM exposure is the single most cited motivation for CO2 utilization investment among emerging market industrial executives surveyed by the World Bank in 2025. Projects that can document verifiable emissions reductions in export-oriented products (cement, steel, chemicals) have access to compliance-driven revenue streams that improve project economics by $15-30 per tonne of CO2 utilized.

Action Checklist

• Map industrial CO2 sources within 5 kilometers of potential feedstock streams (waste minerals, brines, or slag) to identify co-location opportunities
• Assess CBAM exposure for export products and quantify the financial benefit of documented CO2 utilization
• Design utilization projects with at least two independent product offtake pathways to manage market risk
• Prioritize mineralization pathways for near-term deployment given favorable economics; reserve e-fuel pathways for sites with exceptional renewable energy resources and falling electrolyzer costs
• Engage with national carbon market authorities early to ensure CO2 utilization qualifies for credit generation under local frameworks
• Commission independent lifecycle assessments (LCAs) to verify net CO2 reduction, including energy inputs and upstream emissions
• Establish product quality testing partnerships with national standards bodies to validate construction material specifications
• Develop financial models incorporating both product revenue and avoided cost streams (waste disposal, carbon pricing, CBAM compliance)

FAQ

Q: What is the most commercially viable CO2 utilization pathway in emerging markets today? A: CO2 mineralization into supplementary cementitious materials and concrete aggregates offers the strongest near-term economics, with net abatement costs of $12-42 per tonne. This pathway benefits from growing cement demand in emerging markets (projected 3-4% annual growth through 2030), minimal energy penalty due to exothermic reactions, and the ability to use industrial waste streams as feedstocks. Chemical conversion to sodium bicarbonate and precipitated calcium carbonate also shows positive returns where local market demand exists.

Q: How do CO2 utilization pilot costs compare to carbon capture and storage (CCS)? A: Dedicated geological CCS costs $50-120 per tonne of CO2 depending on geology, transport distance, and monitoring requirements. CO2 utilization with mineralization achieves net costs of $12-42 per tonne after product revenues, making it economically preferable where suitable feedstocks and product markets exist. However, utilization pathways face volume constraints: global demand for mineralized CO2 products could absorb 2-4 gigatonnes annually, far less than the 6-10 gigatonnes of annual capture needed by 2050 under most net-zero scenarios.

Q: What are the main risks for CO2 utilization projects in emerging markets? A: Key risks include: product market saturation as multiple projects target the same offtake markets; currency volatility affecting imported equipment costs; regulatory uncertainty around carbon credit eligibility for utilization pathways; technology risk for less mature conversion processes; and offtake counterparty risk in markets with less developed contractual enforcement. Projects should secure binding offtake agreements before final investment decisions and maintain reserve capacity to shift between product streams.

Q: How do CBAM regulations affect the business case for CO2 utilization? A: CBAM creates a direct financial incentive for emerging market exporters to reduce embedded carbon in products shipped to the EU. For cement exporters, each tonne of CO2 utilized in production reduces CBAM liability by the EU Emissions Trading System carbon price (currently EUR 65-80 per tonne). For a typical emerging market cement plant exporting 500,000 tonnes annually to Europe, CO2 utilization reducing embedded carbon by 15% could save EUR 3-5 million per year in CBAM payments, often sufficient to justify the capital investment in utilization infrastructure.

Q: What scale of operation is needed for CO2 utilization to be economically viable? A: Mineralization pilots demonstrate viable economics at 100-500 tonnes of CO2 per day, equivalent to capturing from a medium-sized industrial facility. Below 50 tonnes per day, fixed costs (monitoring, staffing, quality testing) erode margins. Chemical conversion pathways require somewhat larger scale (200-1,000 tonnes per day) due to the capital intensity of reactor systems. E-fuel production remains uneconomic below 10,000 tonnes per year of fuel output, requiring CO2 input streams of 30,000-50,000 tonnes annually.

Sources

• International Energy Agency. (2025). CO2 Utilization in Clean Energy Transitions: Technology and Market Assessment. Paris: IEA Publications.
• World Bank Group. (2025). Carbon Utilization in Emerging Markets: Investment Landscape and Policy Recommendations. Washington, DC: World Bank.
• Saudi Aramco. (2025). Ras Al Khair Carbon Mineralization Project: 18-Month Performance Report. Dhahran: Saudi Aramco Technology.
• Tata Chemicals Limited. (2025). Annual Sustainability Report 2024-2025: Carbon Capture and Utilization Operations. Mumbai: Tata Chemicals.
• Council for Scientific and Industrial Research. (2025). South Africa Green Hydrogen and E-Fuels Pilot: Technical and Economic Assessment. Pretoria: CSIR.
• European Commission. (2025). Carbon Border Adjustment Mechanism: Implementation Guidelines and Product Coverage. Brussels: EC.
• Global CCS Institute. (2025). Global Status of CO2 Utilization: Project Database and Technology Readiness Assessment. Melbourne: GCCSI.
• King Abdullah University of Science and Technology. (2025). Performance Evaluation of CO2-Mineralized Supplementary Cementitious Materials in Gulf Climate Conditions. Thuwal: KAUST.