Sustainability Atlas
Clean Energy·13 min read··...

Explainer: Carbon capture, utilization & storage (CCUS) — the concepts, the economics, and the decision checklist

A practical primer: key concepts, the decision checklist, and the core economics. Focus on duration, degradation, revenue stacking, and grid integration.

Global CCUS capacity has reached a pivotal inflection point: by early 2025, operational facilities worldwide now capture over 50 million tonnes of CO₂ annually, with venture capital investment in the sector surging 139% in 2024 to reach $700 million—more than double the previous year (IEA, 2025). Yet this represents less than 4% of what net-zero pathways require by 2050. For founders, corporate sustainability leads, and policy architects in the EU and beyond, understanding the architecture of carbon capture, utilization, and storage has shifted from optional to imperative. This primer unpacks the core concepts, economics, and decision frameworks that separate successful CCUS deployments from expensive failures.

Why It Matters

The arithmetic of decarbonization demands technologies that can address emissions from sectors where electrification alone falls short. According to the International Energy Agency, CCUS must scale to capture 4–6 gigatonnes of CO₂ annually by 2050 to meet Paris Agreement targets—a 100-fold increase from current capacity (IEA, 2024). The urgency stems from several converging pressures.

First, hard-to-abate industrial sectors—cement, steel, chemicals, and refining—account for approximately 30% of global CO₂ emissions. These processes generate emissions through chemical reactions, not just combustion, making electrification insufficient. A cement kiln, for instance, releases CO₂ when limestone (CaCite CaCO₃) decomposes into lime (CaO) regardless of the heat source. Without CCUS, these sectors cannot reach net-zero.

Second, the EU's regulatory landscape has accelerated dramatically. The Net-Zero Industry Act mandates 50 million tonnes of CO₂ storage capacity by 2030 and 280 million tonnes by 2040. The Carbon Border Adjustment Mechanism (CBAM), now in its transitional phase, imposes implicit carbon costs on imports, creating market incentives for low-carbon production methods that often require CCUS integration.

Third, negative emissions are mathematically necessary. Even aggressive decarbonization scenarios show residual emissions from aviation, agriculture, and legacy infrastructure that must be balanced through carbon dioxide removal (CDR). CCUS underpins both point-source capture from industrial facilities and direct air capture (DAC) systems that draw CO₂ from ambient air.

Key Concepts

The CCUS Value Chain

CCUS encompasses three distinct stages, each with its own technology stack, cost structure, and risk profile:

Capture involves separating CO₂ from flue gases or ambient air. Three primary approaches dominate:

  • Post-combustion capture uses chemical solvents (typically amines) to absorb CO₂ after fuel is burned. This retrofit-friendly approach accounts for 73% of planned capture capacity globally.
  • Pre-combustion capture converts fuel to hydrogen and CO₂ before combustion, capturing the CO₂ stream before burning pure hydrogen. This suits gasification-based processes.
  • Oxy-combustion burns fuel in pure oxygen rather than air, producing a concentrated CO₂ stream that requires minimal separation.

Utilization converts captured CO₂ into products—building materials, synthetic fuels, chemicals, or enhanced oil recovery (EOR). While utilization pathways can generate revenue, they represent a small fraction of total capture potential. Geological storage remains essential for climate-relevant scale.

Storage permanently sequesters CO₂ in geological formations—depleted oil and gas reservoirs, deep saline aquifers, or basalt formations where CO₂ mineralizes into rock. The Northern Lights project in Norway demonstrates commercial-scale offshore storage, with Phase 1 capacity of 1.5 million tonnes annually, expanding to 5 million tonnes by 2028 (Equinor, 2025).

Cost Drivers and Economics

CCUS economics vary dramatically by application. The following table summarizes sector-specific key performance indicators:

SectorCapture Cost ($/tonne CO₂)CO₂ Concentration in Flue GasMaturity LevelTypical Project Scale
Natural Gas Processing$15–3515–70%Commercial0.5–2 Mtpa
Ammonia/Fertilizer$25–5095–99%Commercial0.3–1 Mtpa
Ethanol/Bioethanol$20–4095–99%Commercial0.2–0.5 Mtpa
Hydrogen (SMR)$50–9015–40%Demonstration0.5–2 Mtpa
Cement$60–12015–30%Early commercial0.4–1 Mtpa
Steel (BF-BOF)$70–13020–27%Demonstration0.5–2 Mtpa
Power Generation$40–10010–15%Demonstration1–3 Mtpa
Direct Air Capture$300–6000.04%Early commercial0.01–0.5 Mtpa

Source: Global CCS Institute, 2024; IEA CCUS in Clean Energy Transitions, 2024

Cost reductions follow technology learning curves. DAC costs have fallen from $600+ per tonne in 2020 toward $300–400 today, with projections suggesting $100–200 is achievable by 2040 through modular manufacturing and process optimization (1PointFive, 2025).

Revenue Stacking and Business Models

Successful CCUS projects rarely depend on a single revenue stream. Operators increasingly combine:

  • Carbon credits and removal certificates under voluntary markets or compliance schemes (EU ETS prices exceeded €80/tonne in 2024)
  • 45Q tax credits in the United States ($85/tonne for geological storage, $180/tonne for DAC)
  • Product premiums for low-carbon commodities (green steel, sustainable aviation fuel)
  • Enhanced oil recovery revenue (declining relevance as climate commitments tighten)
  • Government grants and contracts from programs like the EU Innovation Fund ($1.5 billion allocated to CCUS) and UK Carbon Capture Infrastructure Fund (£21.7 billion committed)

What's Working and What Isn't

What's Working

Hub-and-cluster models reduce infrastructure costs. Rather than building dedicated pipelines for each emitter, industrial clusters share CO₂ transport and storage infrastructure. Northern Lights (Norway), Porthos (Netherlands), and the UK's HyNet and East Coast Clusters exemplify this approach, reducing per-tonne costs by 30–50% compared to standalone projects.

Regulatory certainty drives final investment decisions. Projects with clear policy frameworks—45Q in the US, EU Innovation Fund grants, UK CCUS contracts—have advanced fastest. The 247 projects now at front-end engineering design (FEED) stage represent more than double the 2023 figure, reflecting increased confidence in long-term policy support (GlobalData, 2025).

Cross-border CO₂ transport has become operational. Northern Lights began injecting CO₂ from European industrial sources in August 2025, demonstrating that regulatory, technical, and commercial barriers to international CO₂ shipping can be overcome. This opens storage access for countries lacking domestic geological capacity.

Cement sector breakthroughs prove industrial capture viability. Heidelberg Materials' Brevik facility in Norway became the world's first full-scale cement plant with CCUS in June 2025, capturing 400,000 tonnes annually. This demonstrates that even chemically complex processes can integrate capture technology at commercial scale.

What Isn't Working

Underperformance at flagship projects erodes confidence. Chevron's Gorgon facility in Australia—designed as the world's largest CCS project—achieved only 30% of its capture target through 2024, capturing roughly 5 million tonnes against a goal of 80% of injected CO₂. Technical challenges with injection wells and reservoir management proved more complex than anticipated, driving costs to approximately $222/tonne (ABC News Australia, 2024).

Long development timelines frustrate deployment. Average project development from announcement to operation exceeds 7 years. Regulatory permitting, particularly for CO₂ storage in novel jurisdictions, creates multi-year delays. The EU's target of 50 million tonnes of storage capacity by 2030 requires accelerated permitting that current frameworks struggle to deliver.

Storage access remains geographically concentrated. Approximately 80% of projected 2030 capacity concentrates in North America and Europe. Regions lacking suitable geology or regulatory frameworks—Southeast Asia, sub-Saharan Africa—face steeper paths to deployment, risking a two-tier global decarbonization landscape.

High-purity applications obscure broader economics. Most operational capacity today captures CO₂ from natural gas processing and fertilizer production, where concentrations exceed 90%. These low-hanging fruit applications face minimal technical challenge. The harder test—dilute streams from cement, steel, and power generation—represents where cost reductions must occur for climate-relevant scale.

Key Players

Established Leaders

Equinor ASA (Norway): Operates Sleipner and Snøhvit, the world's longest-running offshore storage sites with over 25 million tonnes sequestered since 1996. Co-owns Northern Lights alongside Shell and TotalEnergies, establishing the benchmark for commercial CO₂ transport and storage services.

ExxonMobil (USA): Claims the largest cumulative CO₂ capture at 120+ million tonnes. Acquired Denbury Resources for $4.2 billion in 2023, gaining 1,500 miles of Gulf Coast CO₂ pipelines. Developing the Louisiana Carbon Hub targeting 2+ million tonnes annually.

Shell plc (UK/Netherlands): Operates Quest in Alberta, Canada—one of few facilities exceeding 70% capture rates—with 9 million tonnes stored by May 2024. Equal partner in Northern Lights; developing Polaris and Atlas hubs in Canada.

Occidental Petroleum / 1PointFive (USA): Leads direct air capture commercialization through STRATOS, the world's largest DAC facility at 500,000 tonnes annual capacity, operational in Texas since 2025. Secured offtake agreements with Microsoft, Amazon, and Airbus.

Carbon Clean (UK): Technology provider with CDRMax™ modular capture systems deployed across 49 facilities globally, claiming 1.7+ million tonnes captured from industrial sources. Focus on cost reduction through standardized equipment.

Emerging Startups

Carbon Capture Inc. (USA): Raised $90 million Series A in Q1 2024 from Aramco Ventures, Amazon Climate Pledge Fund, and Siemens Financial Services. Developing next-generation capture materials with lower energy penalties.

Avnos (USA): Secured $36 million Series A from Shell Ventures in 2024. Focuses on modular DAC systems with improved thermodynamic efficiency compared to first-generation technologies.

Captura (USA): Ocean carbon removal pioneer with $22 million Series A from Aramco Ventures, Equinor Ventures, and Hitachi in 2024. Extracts CO₂ from seawater, addressing both atmospheric carbon and ocean acidification.

CarbonBuilt (USA): Partnered with Meta in September 2024 to scale Reversa® low-carbon concrete technology, achieving 70% emissions reduction in building materials through CO₂ utilization.

Mission Zero Technologies (USA): Raised $28 million Series A from Siemens in 2024. Develops electrochemical capture technology with potential for lower energy consumption than amine-based systems.

Key Investors & Funders

Breakthrough Energy Ventures: Bill Gates-backed fund investing in early-stage CCUS innovation, including capture materials and DAC technologies.

UK Government Carbon Capture Infrastructure Fund: Committed £21.7 billion over 25 years, with £3.9 billion allocated to Track-1 projects (2025–2026). Largest national CCUS commitment globally.

EU Innovation Fund: Allocated $1.5 billion to CCUS projects through 2024, with additional billions expected under the Net-Zero Industry Act framework.

US Department of Energy: Launched $1.3 billion point-source capture demonstration program in 2024, supplementing the 45Q tax credit structure.

Examples

  1. Northern Lights JV (Norway): Joint venture between Equinor, Shell, and TotalEnergies offering Europe's first commercial, open-access CO₂ transport and storage service. Phase 1 began injecting CO₂ in August 2025 at 1.5 million tonnes annually, expanding to 5 million tonnes by 2028. Has signed agreements with emitters in Norway, Belgium, Netherlands, and Germany, demonstrating the viability of cross-border carbon management infrastructure.

  2. Heidelberg Materials Brevik (Norway): World's first full-scale cement plant with integrated carbon capture, operational since June 2025. Captures 400,000 tonnes of CO₂ annually—approximately 50% of plant emissions—and ships it to Northern Lights for geological storage. Demonstrates that hard-to-abate industrial sectors can deploy CCUS at commercial scale, providing a template for the cement industry's 8% share of global emissions.

  3. 1PointFive STRATOS (Texas, USA): Largest direct air capture facility globally, capturing 500,000 tonnes of CO₂ annually since 2025. Represents a step-change in DAC scale, demonstrating that modular engineering can achieve facilities 10x larger than previous demonstrations. Secured carbon removal offtake agreements with Microsoft, Amazon, and Airbus at prices exceeding $400/tonne, validating corporate demand for permanent carbon removal.

Action Checklist

  • Assess capture feasibility: Conduct techno-economic analysis of CO₂ streams at your facilities, prioritizing high-purity sources (fermenting, hydrogen production, gas processing) before tackling dilute streams
  • Map storage and transport options: Identify proximity to developing CCUS hubs and shared infrastructure; engage with Northern Lights, Porthos, or emerging US hubs regarding storage capacity access
  • Model revenue stacks: Combine applicable incentives—45Q, EU ETS allowances, Innovation Fund grants, voluntary market premiums—to build investment cases meeting 10–15% hurdle rates
  • Engage early with regulators: Initiate permit applications 3–5 years before planned operation; storage licensing in novel jurisdictions requires extended timelines
  • Evaluate vendor technology maturity: Request operational data from reference facilities; prioritize providers with >12 months of demonstrated uptime at similar scale
  • Secure offtake agreements: For carbon removal projects, approach corporate buyers with Science Based Targets commitments requiring permanent CDR by 2030+
  • Build internal capability: Develop competency in CO₂ handling, pipeline safety, and monitoring protocols; consider partnerships with experienced operators for initial projects

FAQ

Q: What is the realistic cost trajectory for CCUS, and when will it become economically competitive without subsidies? A: Current costs range from $15–35/tonne for high-purity industrial streams to $300–600/tonne for direct air capture. Learning curves suggest 15–25% cost reduction per doubling of cumulative capacity. For industrial capture, break-even against EU ETS prices (€80–100/tonne) is achievable for concentrated streams by 2028–2030. DAC may not reach subsidy-free competitiveness until 2040+ without carbon prices exceeding $150–200/tonne. Strategic early movers access premium offtakes and policy support unavailable at scale.

Q: How should companies evaluate geological storage security and permanence? A: Storage site selection requires comprehensive geological characterization: reservoir porosity, permeability, caprock integrity, and fault mapping. Regulatory frameworks (EPA Class VI wells in the US, EU CCS Directive) mandate monitoring, reporting, and verification (MRV) for minimum 50-year post-closure periods. Sites in deep saline aquifers or basalt formations offer >99% permanence over 1,000+ year timescales when properly characterized. Request third-party verification from established geological consultancies before committing to storage partnerships.

Q: What distinguishes credible CCUS projects from greenwashing or stranded asset risks? A: Credible projects demonstrate: (1) transparent operational data on capture rates and uptime; (2) storage in permanent geological formations rather than enhanced oil recovery; (3) additionality—emissions would not be captured without the project; (4) third-party verification of claimed volumes. Red flags include capture rates below stated design targets, exclusive reliance on EOR revenue, and lack of published monitoring data. The Voluntary Carbon Markets Integrity Initiative (VCMI) and Science Based Targets initiative (SBTi) provide frameworks for evaluating credibility.

Q: How does CCUS fit alongside electrification and renewable energy in decarbonization strategies? A: CCUS is complementary, not competitive, with electrification. For sectors where direct electrification is technically and economically feasible—light transport, residential heating, portions of manufacturing—renewables and efficiency should lead. CCUS addresses residual emissions from process chemistry (cement, steel), legacy infrastructure with remaining useful life, dispatchable low-carbon power (gas with CCS), and negative emissions requirements. Integrated strategies deploy each solution where it offers lowest marginal abatement cost.

Q: What role does direct air capture play versus point-source capture? A: Point-source capture offers 10–20x lower costs per tonne for existing emissions—prioritize it first. DAC addresses distributed and historical emissions impossible to capture at source: aviation, shipping, agriculture, and the need to draw down atmospheric CO₂ concentrations. DAC becomes essential post-2040 when residual emissions require balancing. Current DAC deployments build the technological base and cost reduction pathway for eventual gigatonne-scale deployment; early movers gain operational learning inaccessible to later entrants.

Sources

Topics

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