Myth-busting CO2 utilization pathways (mineralization, fuels, chemicals): separating hype from reality

The global CO2 utilization market reached $7.2 billion in 2025, and projections from the IEA put it on track to surpass $30 billion by 2035 if current policy momentum holds. Yet a 2025 analysis by the Global CCS Institute found that only 12% of announced CCU projects have reached final investment decision, and cumulative CO2 utilization capacity remains below 300 million tonnes per year: less than 1% of annual global emissions. The gap between the narrative and the deployed reality makes CO2 utilization one of the most myth-laden segments in climate technology. For founders, investors, and corporate buyers evaluating these pathways, cutting through the hype is essential.

Why It Matters

Carbon capture and utilization (CCU) occupies a unique position in the decarbonization toolkit. Unlike carbon capture and storage (CCS), which permanently sequesters CO2 underground, CCU converts captured CO2 into products: building materials, fuels, chemicals, polymers, and aggregates. This product revenue stream is precisely what makes CCU attractive to investors and founders, but it also introduces complexity that pure storage pathways avoid.

The US Inflation Reduction Act's 45Q tax credit now provides $60 per tonne for CO2 used in products and $85 per tonne for geological storage (IRS, 2024). The EU Innovation Fund allocated €3.6 billion in its 2024 round, with CCU projects eligible alongside CCS. Canada's Investment Tax Credit for Carbon Capture, Utilization, and Storage provides refundable credits of up to 60% for direct air capture equipment. These incentives have triggered a wave of startup formation and corporate venture activity, but they have also attracted projects with questionable climate benefit and unrealistic economics.

Understanding which myths persist, and why, is not academic. Capital misallocation toward CCU pathways with marginal climate impact diverts funding from approaches that demonstrably work. Procurement teams at major corporations including Microsoft, Stripe, and Frontier are now building internal expertise to evaluate CCU claims, and the methodologies they use are becoming de facto industry standards.

Key Concepts

CO2 utilization pathways fall into three broad categories. Mineralization converts CO2 into solid carbonates by reacting it with alkaline minerals or industrial wastes such as steel slag and fly ash. The resulting products include supplementary cementitious materials, aggregates, and coatings. Mineralization offers permanent carbon storage because the CO2 is chemically locked into rock.

CO2-derived fuels, often called e-fuels or synthetic fuels, combine captured CO2 with green hydrogen to produce hydrocarbons: methanol, kerosene, diesel, or methane. These fuels are chemically identical to fossil fuels and can use existing infrastructure, but they release the captured CO2 when burned, making them carbon-neutral at best rather than carbon-negative.

CO2-derived chemicals use captured CO2 as a feedstock to manufacture products such as ethanol, ethylene, formic acid, polycarbonates, and polyols. The climate benefit depends on what the CO2-based product displaces, how long the carbon remains embedded in the product, and the energy source used in the conversion process.

Myth 1: All CO2 Utilization Is Climate Positive

This is the foundational misconception. The climate benefit of CO2 utilization depends entirely on the specific pathway, the energy source powering the conversion, and the lifecycle emissions of the product being displaced. A 2025 lifecycle analysis published in Nature Energy found that CO2-to-methanol pathways using grid electricity in regions with carbon intensity above 400 grams CO2 per kWh actually increase net emissions compared to conventional methanol production from natural gas (Kiani et al., 2025).

Mineralization pathways fare better because the CO2 is permanently locked into solid materials. CarbonCure, which injects CO2 into concrete during mixing, has demonstrated net-negative lifecycle emissions when using CO2 from industrial point sources, with each cubic yard of treated concrete permanently storing 11 to 25 pounds of CO2 (CarbonCure, 2025). But e-fuel pathways that combust the end product return the CO2 to the atmosphere, delivering at best a displacement benefit rather than permanent removal.

The practical correction: demand full lifecycle assessments conforming to ISO 14040/14044 for any CCU project. Pay attention to the counterfactual: what product is being displaced, and what are its lifecycle emissions? If the CCU product has higher lifecycle emissions than the incumbent, the project is not climate positive regardless of the CO2 input.

Myth 2: CO2 Utilization Can Scale to Address a Meaningful Share of Global Emissions

Global CO2 emissions exceed 37 billion tonnes per year. The total addressable market for CO2-derived products, even under optimistic demand scenarios, absorbs a fraction of that volume. The IEA's 2025 Net Zero Roadmap estimates that all CO2 utilization pathways combined could absorb 500 million to 1 billion tonnes of CO2 per year by 2050, representing 1.5 to 3% of current emissions.

The constraint is not technology but demand. The global cement and concrete market, the largest potential sink for mineralized CO2, consumes approximately 4.4 billion tonnes of cement annually. Even if every tonne of cement incorporated CO2 mineralization at current loading rates (5 to 15% by weight of cite materials), the total CO2 absorbed would be 220 to 660 million tonnes, a significant but bounded contribution. For e-fuels, the constraint is the enormous energy requirement: producing one tonne of synthetic kerosene requires approximately 3.6 tonnes of CO2 and roughly 26 MWh of renewable electricity (ICCT, 2025).

The practical correction: evaluate CCU investments for their specific market opportunity and unit economics rather than for their theoretical contribution to solving climate change at scale. Mineralization into building materials, carbonated aggregates, and supplementary cementitious materials represents the most volume-scalable pathway. E-fuels will likely remain confined to hard-to-abate sectors such as aviation and maritime shipping where electrification is not feasible.

Myth 3: E-Fuels Will Be Cost-Competitive with Fossil Fuels by 2030

Multiple industry roadmaps and startup pitch decks project e-fuel cost parity with fossil jet fuel by 2028 to 2030. Current evidence does not support this timeline. The International Council on Clean Transportation (ICCT) estimates that synthetic kerosene production costs in 2025 range from $3.50 to $6.00 per liter, compared to $0.60 to $0.80 per liter for fossil jet fuel (ICCT, 2025). Reaching cost parity requires green hydrogen at below $1.50 per kilogram (current costs are $3 to $6 per kilogram in most markets), direct air capture costs below $200 per tonne (current costs are $400 to $1,000 per tonne), and electrolyzer utilization rates above 80%.

HIF Global's Haru Oni demonstration plant in Chile, backed by Porsche and Siemens Energy, produced its first batches of e-methanol and e-gasoline in 2023. Production costs at pilot scale exceeded $50 per gallon. The company's commercial-scale facility in Texas, targeting 2027 operation, aims for costs below $4 per gallon, still roughly double the wholesale price of conventional gasoline (HIF Global, 2025).

The practical correction: model e-fuel economics using current input costs with realistic learning curves. The industry consensus, shared by BloombergNEF and the Hydrogen Council, places cost parity with fossil fuels in the 2035 to 2040 timeframe for favorable geographies with abundant cheap renewables and established hydrogen infrastructure. Founders building in this space should plan for 10+ years to cost competitiveness and structure financing accordingly.

Myth 4: CO2 Mineralization in Concrete Is a Niche Application

CO2 mineralization in building materials is often dismissed as a small-scale novelty. The data tells a different story. CarbonCure's technology has been deployed in over 800 concrete plants across 35 countries, treating more than 40 million cubic yards of concrete as of early 2026. Solidia Technologies has demonstrated a curing process that uses CO2 instead of water and heat, reducing the carbon footprint of precast concrete by up to 70% while improving compressive strength (Solidia, 2025).

Blue Planet Systems takes a different approach, using captured CO2 to manufacture synthetic limestone aggregates. These aggregates permanently sequester CO2 at a rate of approximately 440 kg per tonne of aggregate produced. The company's pilot facility in California has demonstrated production at costs competitive with natural aggregates in markets where quarried materials must be transported more than 30 miles (Blue Planet, 2025).

The global aggregates market exceeds 50 billion tonnes per year, making it one of the largest material flows on Earth. If even 10% of aggregate demand shifted to CO2-mineralized products, the resulting CO2 sequestration would exceed 2 billion tonnes annually, roughly equivalent to the combined emissions of France, Germany, and the United Kingdom.

Myth 5: Carbon Credits from CCU Projects Are Equivalent to Those from CCS

Voluntary carbon markets increasingly list CCU-derived credits alongside geological storage credits. But the permanence profiles differ dramatically. CO2 injected into deep geological formations (CCS) has an expected retention time of 10,000+ years. CO2 mineralized into building materials is permanently stored for the life of the structure, typically 50 to 100 years, with the mineralized CO2 remaining stable even after demolition. CO2 converted into fuels is released upon combustion, within weeks to months of production.

The Integrity Council for the Voluntary Carbon Market (ICVCM) published updated guidance in 2025 distinguishing between permanent removal credits (geological storage and certain mineralization pathways), durable storage credits (building materials with 100+ year lifespans), and displacement credits (e-fuels and short-lived chemicals). Pricing already reflects these distinctions: permanent removal credits from direct air capture with geological storage traded at $400 to $800 per tonne in 2025, while e-fuel displacement credits traded at $50 to $120 per tonne (Frontier, 2025).

The practical correction: when purchasing carbon credits from CCU projects, verify the permanence category. Mineralization credits with third-party verification (such as Puro.earth's methodology for carbonated building materials) offer durability comparable to geological storage. E-fuel credits offer displacement value but should not be counted toward permanent removal targets.

What's Working

CarbonCure's injection technology has achieved commercial scale with demonstrated unit economics that work without carbon credit revenue. The company's retrofit model, requiring minimal capital expenditure from concrete producers, has enabled rapid deployment across North America, Europe, and Asia-Pacific.

Twelve (formerly Opus 12) has developed an electrochemical process that converts CO2 directly into CO, a precursor for chemicals and fuels. The company secured a $645 million contract with the US Air Force for e-jet fuel production and is building a commercial facility in Washington state. Its partnership with Alaska Airlines completed a demonstration flight using 100% synthetic jet fuel in late 2025 (Twelve, 2025).

Svante's solid sorbent capture technology, designed for cement and steel plants, reduces capture costs to $40 to $50 per tonne for concentrated industrial point sources, making downstream utilization economically viable for mineralization pathways.

What's Not Working

Direct air capture costs remain too high for most utilization pathways to achieve positive unit economics without substantial subsidies. Climeworks' Mammoth plant in Iceland captures CO2 at approximately $600 per tonne, making any downstream product inherently expensive.

Many announced e-fuel projects depend on green hydrogen prices that do not yet exist at scale. Of the 65 e-fuel projects announced globally by mid-2025, only 8 had secured firm green hydrogen supply agreements at prices below $3 per kilogram (BloombergNEF, 2025).

CO2-to-chemicals pathways face a market size constraint: the total global chemical industry consumes roughly 450 million tonnes of fossil carbon feedstock per year. Even full substitution with captured CO2 would address only about 1% of global emissions while competing against deeply entrenched petrochemical value chains with decades of cost optimization.

Key Players

Established Companies

• Linde: global industrial gas company operating commercial-scale CO2 capture and purification for utilization applications
• Holcim: world's largest cement company, partnering with CarbonCure and Solidia to integrate CO2 mineralization across its product line
• Siemens Energy: providing electrolysis and power-to-X systems for e-fuel production, including the Haru Oni project in Chile

Startups

• CarbonCure Technologies: leading CO2 mineralization platform for concrete, deployed in 800+ plants across 35 countries
• Twelve: electrochemical CO2 conversion to CO and downstream fuels and chemicals, with a $645 million US Air Force contract
• Blue Planet Systems: synthetic limestone aggregate production using captured CO2 as feedstock
• Solidia Technologies: CO2-cured cement and concrete with up to 70% lower carbon footprint than conventional portland cement

Investors

• Breakthrough Energy Ventures: invested in CarbonCure, Twelve, and multiple other CCU startups
• Amazon Climate Pledge Fund: backed CO2 utilization ventures including CarbonCure
• OGCI Climate Investments: oil and gas industry consortium investing in CCUS technologies including utilization pathways

Action Checklist

• Require ISO 14040/14044 compliant lifecycle assessments for any CCU project or product before making procurement or investment decisions
• Classify CO2 utilization claims by permanence category: permanent mineralization, durable storage in materials, or temporary displacement via fuels
• Validate e-fuel cost projections against current green hydrogen and DAC costs rather than future price targets
• Assess the counterfactual for each CCU product: what existing product does it displace, and what are the net lifecycle emissions?
• For carbon credit purchases from CCU projects, verify the credit methodology and permanence classification under ICVCM or equivalent standards
• Evaluate mineralization pathways separately from fuel pathways, as unit economics and climate benefits differ fundamentally
• Track policy developments in 45Q (US), EU Innovation Fund, and Canada's CCUS Investment Tax Credit as these directly affect CCU project viability

FAQ

Q: Is CO2 utilization a substitute for CO2 storage? A: No. Utilization and storage serve different functions in the decarbonization portfolio. Storage provides permanent sequestration at gigatonne scale. Utilization creates products with economic value but has a smaller total addressable volume and variable permanence. The IEA's 2025 scenarios show both pathways are needed, with storage handling roughly 6 to 8 gigatonnes per year by 2050 and utilization absorbing 0.5 to 1 gigatonne.

Q: Which CO2 utilization pathway has the best unit economics today? A: CO2 mineralization in concrete and building materials currently offers the most favorable unit economics because it adds value to existing high-volume products with minimal energy input. CarbonCure's technology operates at a net positive margin for concrete producers even without carbon credit revenue. E-fuel and CO2-to-chemicals pathways generally require subsidies or carbon pricing above $100 per tonne to achieve positive unit economics.

Q: Should corporates include CCU-based carbon credits in their net-zero strategies? A: Mineralization-based credits with verified permanence can legitimately count toward removal targets. E-fuel displacement credits should be classified separately as avoided emissions, not removals. The Science Based Targets initiative (SBTi) guidance published in 2025 requires companies to distinguish between these categories and limits the use of displacement credits for Scope 1 and 2 target achievement.

Q: How should investors evaluate early-stage CCU startups? A: Focus on three questions. First, does the lifecycle analysis show net-negative or net-positive emissions under realistic operating conditions? Second, does the product compete on performance and cost with the incumbent it aims to displace, or does it depend on carbon credit revenue or regulatory mandates? Third, is the energy source for conversion specified and contracted, or does the business plan assume future availability of cheap green electricity or hydrogen?

Sources

• IEA. (2025). Net Zero Roadmap: A Global Pathway to Keep the 1.5 C Goal in Reach. Paris: International Energy Agency.
• Global CCS Institute. (2025). Global Status of CCS and CCU 2025. Melbourne: Global CCS Institute.
• Kiani, A., et al. (2025). "Lifecycle Emissions of CO2-to-Methanol Pathways Under Variable Grid Carbon Intensity." Nature Energy, 10(3), 245-258.
• ICCT. (2025). The Cost of Electrofuels: Current Status and Future Projections. Washington, DC: International Council on Clean Transportation.
• CarbonCure Technologies. (2025). 2024 Impact Report. Halifax, NS: CarbonCure Technologies Inc.
• Solidia Technologies. (2025). CO2-Cured Concrete: Performance and Environmental Data. Piscataway, NJ: Solidia Technologies Inc.
• Blue Planet Systems. (2025). Synthetic Limestone Aggregate: Technical and Economic Assessment. Los Gatos, CA: Blue Planet Systems Corp.
• HIF Global. (2025). Haru Oni and Texas Projects: Progress Update. Houston, TX: HIF Global LLC.
• BloombergNEF. (2025). E-Fuels Outlook 2025: Project Pipeline and Cost Analysis. New York: Bloomberg LP.
• Twelve. (2025). Electrochemical CO2 Conversion: Commercial Deployment Update. Berkeley, CA: Twelve Inc.
• Frontier. (2025). Advance Market Commitment: 2024 Purchase Portfolio Summary. San Francisco, CA: Frontier Climate.