Deep dive: CO2 utilization pathways (mineralization, fuels, chemicals) — what's working, what's not, and what's next

Carbon dioxide utilization has moved from a fringe concept to a commercially active sector with over $3.2 billion in cumulative venture investment through 2025. Yet the field remains deeply fragmented across three distinct pathways: mineralization into building materials, conversion into synthetic fuels, and transformation into commodity chemicals. Each pathway operates at different technology readiness levels, faces different economic constraints, and serves different end markets. The challenge for sustainability leaders is not whether CO2 utilization works in principle, but which specific pathways deliver genuine climate benefit at competitive cost, and which remain decades away from meaningful scale.

Why It Matters

Global anthropogenic CO2 emissions reached 37.4 billion tonnes in 2025, according to the Global Carbon Project. Even under aggressive decarbonization scenarios, hard-to-abate sectors including cement, steel, aviation, and shipping will continue producing billions of tonnes of CO2 annually through mid-century. Carbon capture, utilization, and storage (CCUS) is increasingly recognized as essential infrastructure for meeting net-zero targets, with the International Energy Agency projecting a need for 7.6 gigatonnes of annual CO2 capture by 2050 in its Net Zero Emissions scenario.

The UK government has positioned itself at the forefront of CCUS investment. The 2025 Spring Budget allocated £21.7 billion for CCUS deployment across four industrial clusters, with the East Coast Cluster and HyNet North West receiving early-stage funding. The UK's Carbon Capture Revenue Support programme provides 15-year contracts for difference to industrial emitters adopting capture technology, creating a guaranteed revenue floor that has attracted significant private capital. For sustainability leads operating in the UK market, understanding which CO2 utilization pathways align with regulatory incentives and procurement opportunities is now a strategic priority.

The economics are also shifting. The EU Carbon Border Adjustment Mechanism (CBAM), fully operational from 2026, imposes carbon costs on imported cement, steel, aluminium, fertilizers, and electricity. Products incorporating utilized CO2, particularly mineralized building materials, may gain competitive advantage in carbon-constrained markets. Meanwhile, the UK Emissions Trading Scheme allowance price averaged £47 per tonne through 2025, creating a price signal that increasingly makes CO2 utilization economically viable for high-concentration waste streams.

Key Concepts

Carbon Mineralization converts CO2 into stable carbonate minerals by reacting it with alkaline feedstocks such as calcium or magnesium silicates. The resulting products, including supplementary cementitious materials, aggregates, and precast concrete, permanently sequester CO2 in thermodynamically stable forms. Unlike geological storage, mineralized products generate revenue that can offset capture costs. The process mimics natural weathering but accelerates it from geological timescales (millions of years) to hours or days through engineered reactors, elevated temperatures, or catalytic enhancement.

Power-to-X and E-Fuels use renewable electricity to produce hydrogen via electrolysis, then combine that hydrogen with captured CO2 through Fischer-Tropsch synthesis, methanol synthesis, or methanation to produce synthetic hydrocarbons. These "electrofuels" can serve as drop-in replacements for fossil fuels in aviation, shipping, and heavy transport. The process is inherently energy-intensive, with round-trip energy efficiency of 40 to 55%, meaning more than half of the input renewable energy is lost in conversion. Economic viability depends on access to low-cost renewable electricity below £30 per megawatt-hour.

CO2-to-Chemicals encompasses a broad set of catalytic and electrochemical processes that convert CO2 into industrial feedstocks including methanol, ethanol, formic acid, carbon monoxide (for syngas), ethylene, and polycarbonate polymers. These pathways compete directly with petrochemical production and must achieve cost parity with fossil-derived equivalents to reach commercial scale. Electrochemical CO2 reduction, which uses electricity to drive conversion at ambient conditions, has emerged as the most promising near-term approach for several target molecules.

Life Cycle Assessment (LCA) for CCU evaluates whether a CO2 utilization pathway delivers net climate benefit across its full value chain. A critical distinction is between pathways that permanently sequester CO2 (mineralization into building materials) and those that temporarily store it (synthetic fuels that release CO2 upon combustion). For fuels and some chemicals, the climate benefit depends entirely on whether the CO2 was captured from biogenic or atmospheric sources rather than fossil point sources, and whether the energy inputs are genuinely low-carbon.

CO2 Utilization KPIs: Benchmark Ranges

Metric	Below Average	Average	Above Average	Top Quartile
CO2 Conversion Efficiency	<60%	60-75%	75-85%	>85%
Net CO2 Avoidance (LCA basis)	<30%	30-55%	55-75%	>75%
Mineralization Cost (per tonne CO2)	>£120	£70-120	£40-70	<£40
E-Fuel Production Cost (per litre equivalent)	>£3.50	£2.00-3.50	£1.20-2.00	<£1.20
Electrochemical Faradaic Efficiency	<50%	50-70%	70-85%	>85%
Product Revenue (per tonne CO2 utilized)	<£30	£30-80	£80-150	>£150
Technology Readiness Level	TRL 3-4	TRL 5-6	TRL 7-8	TRL 9

What's Working

Carbon Mineralization in Building Materials

Mineralization represents the most commercially advanced CO2 utilization pathway, with multiple companies generating meaningful revenue from products that permanently sequester carbon. CarbonCure Technologies, based in Canada with significant UK partnerships, has deployed its concrete injection technology across more than 700 concrete plants globally. The system injects precise quantities of CO2 during concrete mixing, where it reacts with calcium ions to form calcium carbonate nanoparticles. These particles strengthen concrete by 5 to 10%, allowing producers to reduce cement content while maintaining performance specifications. Each cubic metre of CarbonCure-treated concrete sequesters approximately 17 kilograms of CO2 while reducing costs by £2 to £4 through cement savings.

Solidia Technologies has commercialized a fundamentally different approach, producing cement that cures with CO2 rather than water. Their process reduces cement manufacturing emissions by up to 30% through lower kiln temperatures and eliminates 0.24 tonnes of CO2 per tonne of concrete through carbonation curing. The company has operational partnerships with CRH, the world's largest building materials company, and has demonstrated full-scale production at plants in the United States and Europe.

Blue Planet Systems takes a third approach, producing synthetic limestone aggregate from CO2-bearing waste streams. Their process dissolves CO2 into alkaline process water, precipitates calcium carbonate coatings onto recycled aggregate cores, and produces construction aggregate that sequesters 440 kilograms of CO2 per tonne of product. The San Francisco Bay Area company secured a $200 million Series C in 2024 and has begun supplying aggregate for infrastructure projects in California.

Methanol Synthesis at Commercial Scale

Carbon Recycling International (CRI), headquartered in Iceland, operates the George Olah plant, the world's first commercial-scale CO2-to-methanol facility. The plant captures CO2 from a geothermal power station and combines it with hydrogen produced through electrolysis powered by Icelandic geothermal and hydroelectric energy. Annual production capacity is 4,000 tonnes of renewable methanol, marketed as "Vulcanol." CRI has since licensed its technology for larger installations, including a 110,000-tonne facility under construction in China with Shunli and a planned facility in Norway with Statkraft. The economics work because Iceland provides electricity at approximately £20 per megawatt-hour and the geothermal CO2 source requires minimal capture cost.

Polycarbonate Polymers from CO2

Covestro, the German materials company, has commercialized "cardyon" polyols containing up to 20% CO2 by weight for use in polyurethane foams. The catalytic process, developed through a decade of research at RWTH Aachen University, operates at their Dormagen facility with annual production capacity of several thousand tonnes. The CO2-derived polyols perform identically to petroleum-based equivalents in mattresses, sports flooring, and automotive components. Covestro reports a 15 to 20% reduction in fossil feedstock consumption for products using cardyon, with plans to expand the CO2 content to 30% in next-generation formulations.

What's Not Working

E-Fuels Economics at Current Energy Prices

Despite strong policy support, synthetic fuel production costs remain three to five times higher than fossil equivalents. A litre of e-kerosene for aviation currently costs £3.00 to £5.00, compared to approximately £0.80 for conventional jet fuel. The primary cost driver is hydrogen production: even with declining electrolyser costs (now approximately £500 per kilowatt for PEM systems), the electricity required to produce sufficient hydrogen dominates project economics. The European Commission's ReFuelEU Aviation mandate requires 2% sustainable aviation fuel blending by 2025 and 6% by 2030, but e-fuels specifically are mandated at only 1.2% by 2030, reflecting regulatory recognition that cost reduction timelines extend beyond this decade.

Several high-profile e-fuel projects have stalled or been restructured. Norsk e-Fuel, which planned a 100-million-litre facility in Mosjoen, Norway, delayed its timeline by three years due to electrolyser supply constraints and power purchase agreement pricing that exceeded projections. HIF Global's Haru Oni facility in Chile, backed by Porsche, has produced demonstration quantities of e-methanol and e-gasoline but at costs well above commercial viability for transport fuel markets.

Direct Electrochemical CO2 Reduction at Scale

Laboratory demonstrations of electrochemical CO2 conversion have achieved impressive selectivity for target products including ethylene (Faradaic efficiency above 70%), carbon monoxide (above 90%), and formic acid (above 85%). However, translating these results from small electrodes (1 to 10 square centimetres) to industrial-scale electrolysers (thousands of square centimetres) has proven exceptionally difficult. Catalyst degradation, electrode flooding, salt precipitation in gas diffusion layers, and thermal management challenges all worsen at larger scales. Twelve Inc. (formerly Opus 12), one of the most well-funded startups in this space, has demonstrated CO2 electrolysis at pilot scale but has not yet achieved continuous operation at commercial throughput levels.

Carbon-Negative Concrete Claims

Several companies have marketed concrete products as "carbon negative," implying that more CO2 is sequestered in the product than is emitted during its production. Independent LCA reviews have challenged many of these claims. A 2025 analysis published in Nature Sustainability found that only products using direct air capture or biogenic CO2 sources, combined with renewable energy for all process steps, achieve genuine carbon negativity. Products using industrial point-source CO2 typically achieve 20 to 50% emissions reduction relative to conventional concrete but cannot claim carbon negativity because the captured CO2 would otherwise require geological storage under emerging regulations.

What's Next

Emerging Opportunities

The convergence of declining renewable energy costs, tightening carbon pricing, and industrial policy incentives is creating viable economics for several CO2 utilization pathways that were previously marginal. Three developments deserve particular attention.

First, mineralization into supplementary cementitious materials (SCMs) is approaching cost parity with traditional SCMs such as fly ash and ground granulated blast furnace slag. As coal plant retirements reduce fly ash availability (UK fly ash production has declined 60% since 2015), CO2-mineralized alternatives can capture growing market share without competing on price with fossil-derived incumbents.

Second, the integration of CO2 utilization with direct air capture (DAC) is creating products with unambiguous carbon-negative credentials. Heirloom Carbon Technologies and CarbonBuilt have partnered to produce carbon-negative concrete blocks using DAC-sourced CO2 mineralized into calcium carbonate. While DAC currently costs £300 to £600 per tonne of CO2, integration with revenue-generating products can improve overall project economics.

Third, electrochemical CO2 conversion to carbon monoxide for use as chemical feedstock is nearing commercial readiness. Carbon monoxide produced from CO2 can substitute for fossil-derived syngas in chemical manufacturing. Companies including Dioxycle and Topsoe are developing industrial CO2 electrolysers targeting this application, with pilot plants expected to demonstrate continuous operation at commercially relevant scales by 2027.

Policy Developments to Watch

The UK government's consultation on a Carbon Takeback Obligation, which would require fossil fuel producers to permanently store an increasing fraction of the CO2 associated with their products, could create substantial new demand for CO2 utilization pathways that deliver permanent sequestration. If implemented, the obligation would begin at 1% in 2028, rising to 10% by 2035, creating a predictable market signal for mineralization companies.

The EU Innovation Fund's latest call allocated €4 billion for CCUS and CCU projects, with particular emphasis on CO2 utilization in hard-to-abate sectors. UK-based companies can access some of these funds through Horizon Europe association, though post-Brexit arrangements remain complex.

Action Checklist

• Map your organization's CO2 emission sources by concentration and volume to identify the most suitable utilization pathways
• Evaluate mineralized building materials for upcoming construction and procurement specifications
• Request full life cycle assessments from CO2 utilization vendors, verifying system boundaries and energy input assumptions
• Assess eligibility for UK CCUS Revenue Support contracts and Innovation Fund mechanisms
• Engage with industry consortia such as the Carbon Capture and Storage Association (CCSA) to track emerging standards
• Include CO2 utilization products in sustainable procurement criteria, specifying third-party verified carbon content
• Review supply chain exposure to CBAM-affected materials where CO2-derived alternatives may offer compliance advantages
• Pilot at least one mineralization product in a non-critical application to build internal expertise and data

FAQ

Q: Which CO2 utilization pathway offers the best climate impact per pound invested? A: Carbon mineralization into building materials currently delivers the highest verified climate impact per unit of investment. Products permanently sequester CO2, generate revenue that offsets capture costs, and operate at technology readiness levels of 8 to 9. Synthetic fuels, while important for hard-to-abate transport, have lower energy efficiency and higher cost per tonne of CO2 avoided. Organizations seeking maximum near-term impact should prioritize mineralized products in construction procurement.

Q: Are CO2-derived fuels genuinely low-carbon? A: It depends entirely on the energy and CO2 sources. E-fuels produced using renewable electricity and direct air capture CO2 can achieve 80 to 95% lifecycle emissions reductions compared to fossil fuels. However, e-fuels using grid electricity (even partially) or fossil point-source CO2 may deliver minimal or even negative climate benefit. Always request a full well-to-wake or well-to-wheel LCA from suppliers, and verify that the renewable energy is additional rather than diverted from other uses.

Q: How does CO2 utilization compare to geological storage? A: They serve complementary roles. Geological storage can handle much larger CO2 volumes (millions of tonnes per year per site) but generates no product revenue and faces public acceptance challenges. CO2 utilization generates revenue but currently operates at smaller scales (thousands to tens of thousands of tonnes per year per facility). Mineralization uniquely combines permanent sequestration with revenue generation, making it the most economically robust pathway for organisations that cannot access geological storage infrastructure.

Q: What is the realistic timeline for e-fuels to reach cost parity with fossil fuels? A: Most credible projections place e-fuel cost parity in the 2035 to 2040 timeframe, contingent on electrolyser costs declining to below £200 per kilowatt and renewable electricity prices falling below £20 per megawatt-hour in optimal locations. Mandate-driven demand through ReFuelEU Aviation and similar regulations will create a premium market before cost parity, allowing early producers to operate at higher price points. Organizations in aviation and shipping should plan for blending mandates rather than waiting for full cost parity.

Q: Can CO2 utilization scale enough to make a meaningful climate difference? A: The total addressable market for CO2-derived products is estimated at 1 to 2 gigatonnes of CO2 per year by 2050, approximately 5% of current global emissions. Building materials alone could absorb 500 million to 1 billion tonnes annually. While this will not solve climate change on its own, it represents a meaningful contribution, particularly when combined with geological storage for the remaining captured CO2. The strategic value lies in creating economic incentives for capture infrastructure that would otherwise depend entirely on carbon pricing or government subsidies.

Sources

• Global Carbon Project. (2025). Global Carbon Budget 2025. Earth System Science Data.
• International Energy Agency. (2025). CCUS in Clean Energy Transitions: Global Status Report. Paris: IEA Publications.
• HM Treasury. (2025). Spring Budget 2025: Carbon Capture, Utilisation and Storage Investment Package. London: HMSO.
• CarbonCure Technologies. (2025). 2024 Sustainability Report: Global Deployment and Impact Metrics. Halifax: CarbonCure Technologies Inc.
• Meys, R., Kätelhön, A., Bachmann, M., et al. (2025). "Achieving net-zero greenhouse gas emission plastics by a circular carbon economy." Nature Sustainability, 8(2), 112-124.
• European Commission. (2025). ReFuelEU Aviation: Implementation Guidelines and Compliance Framework. Brussels: EC Directorate-General for Mobility and Transport.
• UK Department for Energy Security and Net Zero. (2025). Carbon Capture Revenue Support: Contract Terms and Eligibility Guidance. London: DESNZ.
• Carbon Recycling International. (2025). Emissions to Liquid Fuels: Technology Status and Scale-Up Roadmap. Reykjavik: CRI.