Market map: Carbon capture, utilization & storage (CCUS) — the categories that will matter next

The global pipeline of carbon capture, utilization, and storage (CCUS) projects reached over 600 facilities in various stages of development by late 2024, representing a combined capture capacity exceeding 420 million tonnes of CO2 per year, according to the Global CCS Institute's 2024 Status Report. North America leads this expansion decisively: the United States and Canada together account for roughly 60% of the world's announced CCUS capacity, driven by the most generous policy incentives ever enacted for carbon management. Yet only about 50 operational facilities worldwide are actually capturing and storing CO2 today, processing approximately 50 million tonnes annually. The gap between announced ambition and operational reality defines the competitive landscape, and the categories that bridge that gap will capture the most value over the next decade.

Why It Matters

Carbon capture is no longer a niche technology debated primarily in academic journals. It has become a central pillar of North American industrial decarbonization strategy. The Inflation Reduction Act (IRA) of 2022 transformed the economics of CCUS by dramatically expanding Section 45Q tax credits: $85 per tonne for CO2 permanently stored in geological formations, $60 per tonne for CO2 used in enhanced oil recovery (EOR), and $180 per tonne for CO2 captured via direct air capture (DAC) and permanently stored. These credit levels, available for 12 years from the date a facility is placed in service, have shifted CCUS from a marginally economic proposition to a bankable investment for a growing number of project configurations.

The International Energy Agency (IEA) projects that achieving net-zero emissions by 2050 requires global CCUS capacity to reach approximately 6 gigatonnes of CO2 per year, roughly 120 times the current operational capacity. The U.S. Department of Energy (DOE) has committed over $12 billion to CCUS through programs including the Regional Direct Air Capture Hubs initiative, which selected two hub projects for $3.5 billion in combined funding in August 2023. Canada's federal Investment Tax Credit for CCUS, enacted in 2022, provides refundable credits ranging from 37.5% to 60% of eligible capital costs, making the Canadian policy framework among the most supportive globally alongside the U.S. system.

For investors, corporates, and policymakers, the question is no longer whether CCUS will scale, but which segments and players will capture value as it does.

Key Concepts

Point-source capture refers to technologies that separate CO2 from flue gas or process streams at industrial facilities such as power plants, cement kilns, steel mills, and ethanol refineries. Capture costs vary widely depending on CO2 concentration: ethanol fermentation produces nearly pure CO2 streams capturable at $15 to $25 per tonne, while post-combustion capture from natural gas power plants ranges from $40 to $120 per tonne (IEA, 2024).

Direct air capture (DAC) extracts CO2 directly from ambient air, where concentrations are roughly 425 parts per million. Current costs range from $400 to $1,000 per tonne, though the DOE's Carbon Negative Shot initiative targets $100 per tonne by the mid-2030s. DAC's advantage is location flexibility; facilities can be sited near optimal storage formations rather than near emission sources.

CO2 utilization converts captured carbon dioxide into commercial products including building materials, chemicals, synthetic fuels, and carbonated beverages. The addressable market for CO2 utilization is estimated at 300 to 500 million tonnes per year by 2040, though critics note that many utilization pathways re-release CO2 when products are consumed (e.g., synthetic fuels), limiting their climate benefit.

Geological storage (sequestration) involves injecting CO2 into deep saline aquifers, depleted oil and gas reservoirs, or basalt formations where it mineralizes over time. Storage permanence exceeding 10,000 years is achievable in well-characterized formations, and the EPA's Class VI well permit program governs injection operations in the United States.

KPI	Current Benchmark	Target (2030)
Point-source capture cost (high-purity streams)	$15-$25/tonne	$10-$15/tonne
Point-source capture cost (power/cement)	$40-$120/tonne	$30-$50/tonne
DAC capture cost	$400-$1,000/tonne	$150-$250/tonne
45Q credit, geological storage	$85/tonne	$85/tonne (through 2034+)
45Q credit, DAC + storage	$180/tonne	$180/tonne (through 2034+)
Global operational capture capacity	~50 Mtpa	~300 Mtpa
U.S. Class VI permits issued (cumulative)	~30	100+

Market Segments

Industrial point-source capture remains the largest segment by installed capacity and near-term project pipeline. Ethanol plants, natural gas processing facilities, and fertilizer production represent the lowest-cost capture opportunities. The segment is expanding into harder-to-abate sectors including cement (where process emissions from calcination are unavoidable without capture), steel, and hydrogen production.

Direct air capture is the fastest-growing segment by investment volume, despite having the smallest operational footprint. DAC benefits from the highest 45Q credit tier and strong demand from corporate buyers seeking high-permanence carbon removal credits. The segment is dominated by a handful of technology developers pursuing either solid sorbent or liquid solvent approaches.

CO2 transport infrastructure has emerged as a critical enabling segment. The proposed CO2 PRIME Act and other federal legislation aim to streamline permitting for interstate CO2 pipelines, which are essential to connecting capture facilities with optimal storage sites. Navigator CO2 Ventures, Summit Carbon Solutions, and Wolf Carbon Solutions have proposed major pipeline networks across the U.S. Midwest, though permitting challenges, particularly landowner opposition in Iowa, South Dakota, and other states, have delayed several projects.

Geological storage and monitoring is rapidly professionalizing as a standalone business. Companies are developing storage-as-a-service models, securing pore space rights, characterizing reservoirs, and obtaining Class VI injection permits. The EPA had issued approximately 30 Class VI permits by late 2024, with over 150 additional applications pending, creating a significant bottleneck.

Carbon removal procurement and marketplaces connect corporate buyers with verified removal credits. Platforms like Frontier (an advance market commitment backed by Stripe, Alphabet, Shopify, Meta, and McKinsey) have committed over $1 billion to purchasing permanent carbon removal, sending strong demand signals that underpin project financing for DAC and novel removal pathways.

Key Players

Established Leaders

Occidental Petroleum (Oxy) / 1PointFive — The largest single player in North American CCUS, Occidental's subsidiary 1PointFive is constructing STRATOS, the world's largest DAC facility, in Ector County, Texas. The first phase targets 500,000 tonnes of CO2 capture per year using Carbon Engineering's liquid solvent technology. Occidental also operates one of the largest CO2-EOR businesses in the Permian Basin and acquired Carbon Engineering in August 2023 for approximately $1.1 billion.

ExxonMobil — Pursuing the largest integrated CCS project in North America through its proposed Houston-area CCS hub, which aims to capture up to 100 million tonnes of CO2 per year by 2040 from industrial emitters along the Houston Ship Channel. ExxonMobil has secured significant acreage for offshore CO2 storage in the Gulf of Mexico.

Shell — Operates the Quest CCS project in Alberta, Canada, which has captured and stored over 8 million tonnes of CO2 since 2015 from oil sands upgrading operations. Shell is also a partner in the Polaris CCS project, targeting 650,000 tonnes per year of additional capture capacity at the Scotford complex.

Chevron — Operates the Gorgon CO2 injection project in Australia (one of the world's largest CCS operations) and is investing in North American CCUS through partnerships and its New Energies division, with a focus on hydrogen production with CCS.

Emerging Startups

Heirloom Carbon Technologies — A San Francisco-based startup using an enhanced mineral weathering approach (limestone-based direct air capture) that heats crushed limestone to release absorbed CO2 for storage. Heirloom opened its first commercial DAC facility in Tracy, California in November 2023, and has secured purchase agreements with Microsoft and other major buyers. The company has raised over $150 million in venture funding.

Charm Industrial — Converts agricultural waste biomass into bio-oil through fast pyrolysis, then injects the bio-oil deep underground for permanent storage. Charm's approach leverages existing oil and gas injection infrastructure and has delivered carbon removal credits to customers including Stripe, JPMorgan Chase, and Shopify. The company has raised over $100 million.

CarbonCapture Inc. — Developing modular solid-sorbent DAC systems designed for mass manufacturing and rapid deployment. Selected as a partner in the DOE-funded DAC Hub in Wyoming (Project Bison), targeting 5 million tonnes of CO2 capture per year at full buildout.

Svante — A Vancouver-based company specializing in point-source carbon capture using a proprietary solid sorbent technology with rapid cycle times. Svante's approach targets cement and hydrogen production facilities, and the company has raised over $300 million including investment from Chevron and the Canada Growth Fund.

CarbonCure Technologies — Injects captured CO2 into fresh concrete during mixing, where it mineralizes permanently and improves compressive strength. The technology is deployed at over 700 concrete plants across North America, representing one of the most commercially mature CO2 utilization pathways.

Investors & Enablers

Breakthrough Energy Ventures (BEV) — Bill Gates-founded climate investment fund that has backed multiple CCUS companies including CarbonCapture Inc., Heirloom, and Svante. BEV's portfolio approach spans capture technologies, storage solutions, and utilization pathways.

U.S. Department of Energy (DOE) — The single largest funder of CCUS in North America, with over $12 billion allocated through the Bipartisan Infrastructure Law and IRA. Key programs include the Regional DAC Hubs ($3.5 billion), CarbonSAFE storage validation ($2.5 billion), and the Carbon Capture Large-Scale Pilots initiative.

Frontier — An advance market commitment co-founded by Stripe, Alphabet, Shopify, Meta, and McKinsey that has committed over $1 billion to purchasing permanent carbon removal by 2030. Frontier's buyer coalition reduces offtake risk for early-stage removal companies including Charm Industrial and Heirloom.

Canada Growth Fund — A C$15 billion federal investment vehicle that has made significant commitments to CCUS projects, including a C$200 million investment in carbon contracts for difference with Entropy Inc. for its point-source capture projects in Alberta.

Global CCS Institute — An international think tank headquartered in Melbourne with a significant North American presence, providing the definitive annual Global Status of CCS report, project tracking database, and policy advisory services that inform investment and regulatory decisions across the CCUS sector.

Where Value Is Shifting

Three structural shifts are redirecting value within the CCUS landscape.

First, value is migrating from capture hardware toward storage access and transport logistics. As capture technology matures and costs decline, the binding constraint on project deployment is increasingly the availability of permitted storage sites and CO2 transport infrastructure. Companies that secure Class VI permits, pore space rights, and pipeline routes are building durable competitive moats. Occidental's extensive subsurface expertise and acreage position, ExxonMobil's offshore Gulf storage portfolio, and dedicated storage developers like Carbon TerraVault illustrate this trend.

Second, the DAC segment is bifurcating between technology developers pursuing cost reduction and project developers focused on execution and financing. Early DAC companies such as Carbon Engineering (now part of Occidental) and Climeworks proved the technology; the next phase rewards organizations that can finance, build, and operate large-scale facilities on time and on budget. Engineering, procurement, and construction (EPC) capabilities and project finance structuring are becoming as important as core capture chemistry.

Third, CO2 utilization is shifting from novelty applications toward durable, high-volume pathways. Mineralization in concrete (CarbonCure) and construction aggregates offers permanent storage while generating revenue, a combination that creates favorable unit economics without relying on 45Q credits. Synthetic fuel pathways, while attracting investment from aviation and shipping sectors, face scrutiny over lifecycle emissions and will likely remain dependent on policy support.

Competitive Dynamics

The CCUS landscape exhibits a pronounced barbell structure. At one end, major oil and gas companies (Occidental, ExxonMobil, Shell, Chevron) leverage existing subsurface expertise, balance sheet strength, and carbon management infrastructure to pursue large-scale integrated projects. At the other end, venture-backed startups (Heirloom, Charm Industrial, CarbonCapture Inc.) are pursuing novel capture and removal approaches with support from corporate advance purchase agreements and DOE funding.

Mid-market participants face the most challenging competitive position. Companies without either the scale of the majors or the innovation premium of the startups must compete on operational efficiency, regional storage access, or niche technology advantages. Consolidation is accelerating: Occidental's acquisition of Carbon Engineering in 2023 signaled that major players will acquire proven technologies rather than develop them internally.

Permitting has become a competitive differentiator. The EPA's Class VI permitting backlog, with over 150 pending applications and average processing times stretching beyond two years, means that companies with approved permits hold significant first-mover advantages. Louisiana and North Dakota have obtained primacy authority to administer Class VI permits at the state level, potentially accelerating project timelines in those jurisdictions. Texas, Wyoming, and West Virginia have applied for or received primacy authority as well, creating a patchwork of regulatory pathways.

What to Watch Next

The most consequential near-term developments include the progress of Occidental's STRATOS DAC facility, expected to begin operations in mid-2025. If STRATOS demonstrates reliable capture at or near its 500,000 tonne per year design capacity, it will validate large-scale DAC economics and likely trigger a wave of follow-on investment in competing and complementary projects.

CO2 pipeline permitting remains a key bottleneck. The outcome of regulatory proceedings and landowner negotiations for Summit Carbon Solutions' 2,500-mile Midwest CO2 pipeline and similar projects will determine whether centralized storage hubs become viable, or whether the industry shifts toward distributed storage models co-located with capture facilities.

Federal policy durability is a critical watch item. The 45Q credit structure faces potential modification depending on future legislative and executive actions. Any reduction in credit values or eligibility criteria could strand projects that have reached final investment decision based on current incentive levels.

Corporate carbon removal procurement is scaling rapidly. Microsoft's 2024 agreement with Heirloom for DAC-based removal credits, Frontier's expanding buyer coalition, and JPMorgan Chase's carbon removal purchases through Charm Industrial represent a maturing demand signal. Whether voluntary corporate demand can sustain early CCUS deployment until costs decline to unsubsidized viability remains an open question.

Finally, the emergence of carbon management as a regulated utility function bears monitoring. Several state public utility commissions are evaluating whether CO2 transport and storage should operate under utility-style regulation, which would provide rate-of-return certainty for infrastructure investors while imposing service obligations and rate oversight.

FAQ

What is the difference between CCS and CCUS?

CCS (carbon capture and storage) refers specifically to capturing CO2 from emission sources and injecting it into geological formations for permanent storage. CCUS adds the "U" for utilization, encompassing pathways where captured CO2 is converted into commercial products such as building materials, chemicals, or fuels. In practice, most large-scale projects today focus on storage rather than utilization, as geological sequestration offers the clearest permanence guarantees and qualifies for the highest 45Q tax credit tiers.

How effective are 45Q tax credits at driving CCUS deployment?

The expanded 45Q credits under the Inflation Reduction Act have been transformative. At $85 per tonne for geological storage and $180 per tonne for DAC with storage, 45Q closes the economic gap for many project configurations, particularly those capturing high-purity CO2 streams from ethanol and gas processing. The credits are transferable (allowing project developers to sell them to tax equity investors), which has significantly expanded the pool of available capital. The Global CCS Institute attributes much of the 102% year-over-year growth in announced U.S. CCUS capacity during 2023-2024 to 45Q enhancements.

What are the main barriers to scaling CCUS in North America?

Three primary barriers constrain deployment. First, permitting timelines for Class VI injection wells and CO2 pipelines remain lengthy and uncertain; the EPA's permitting backlog exceeds 150 applications. Second, the skilled workforce for CO2 facility construction, pipeline installation, and subsurface reservoir management is limited and competes with other energy transition buildouts. Third, public acceptance challenges, particularly around CO2 pipeline routing through agricultural land, have delayed or canceled several major infrastructure projects.

How permanent is geological CO2 storage?

When CO2 is injected into well-characterized geological formations (typically deep saline aquifers or depleted hydrocarbon reservoirs at depths exceeding 800 meters), it undergoes a series of trapping mechanisms including structural trapping beneath impermeable cap rocks, residual trapping in pore spaces, dissolution into formation brines, and mineral trapping through reaction with reservoir rocks. These mechanisms increase storage security over time, with engineered storage sites designed for permanence exceeding 10,000 years. The Sleipner project in Norway has monitored CO2 storage since 1996 with no evidence of leakage, and the IEA considers geological storage a mature technology with well-understood risk profiles.

What role does enhanced oil recovery (EOR) play in the CCUS market?

CO2-enhanced oil recovery, where carbon dioxide is injected into depleted oil reservoirs to mobilize residual hydrocarbons, has been practiced commercially since the 1970s and accounts for the majority of CO2 stored in North America to date. EOR qualifies for a $60 per tonne 45Q credit (versus $85 for dedicated storage). While environmentally controversial because it facilitates additional fossil fuel production, EOR provides existing pipeline and injection infrastructure that lowers barriers to entry for new capture projects. The Permian Basin in West Texas remains the global center of CO2-EOR activity, with Occidental operating the largest network of CO2 injection operations.

Sources

• Global CCS Institute. "Global Status of CCS 2024." November 2024. https://www.globalccsinstitute.com/resources/global-status-of-ccs-2024/

• International Energy Agency (IEA). "CCUS Projects Explorer and Tracking Report." 2024. https://www.iea.org/energy-system/carbon-capture-utilisation-and-storage

• U.S. Department of Energy. "Regional Direct Air Capture Hubs." Office of Clean Energy Demonstrations, 2023-2024. https://www.energy.gov/oced/regional-direct-air-capture-hubs

• U.S. Internal Revenue Service. "Section 45Q Credit for Carbon Oxide Sequestration." IRS Guidance and Final Regulations, 2024. https://www.irs.gov/credits-deductions/carbon-oxide-sequestration-credit

• U.S. Environmental Protection Agency. "Class VI Wells Permitting." Underground Injection Control Program, 2024. https://www.epa.gov/uic/class-vi-wells-used-geologic-sequestration-carbon-dioxide

• Government of Canada. "Carbon Capture, Utilization and Storage Investment Tax Credit." Budget 2022 and 2024 Updates. https://www.canada.ca/en/department-finance/programs/consultations/2022/carbon-capture-utilization-storage-investment-tax-credit.html

• Frontier. "An Advance Market Commitment to Accelerate Carbon Removal." 2024. https://frontierclimate.com/

• Occidental Petroleum. "1PointFive: Direct Air Capture." Corporate Disclosures, 2024. https://www.1pointfive.com/