By Iris Badezet-Delory
In its latest report, the International Energy Agency (IEA) set an objective of capturing 7.6Gt of CO2 per year by 2050 if we wish to achieve net zero emissions by then. In terms of carbon capture, the United States is the global leader with more than 40 percent of the carbon capacity share. However, as of 2024, the current worldwide capacity for carbon capture usage and storage is only 55 Mt of CO2 per year. Is this achievable? Can carbon capture really help as a mitigation solution to climate change? Since the United States is the leader in the field, one might legitimately wonder what the impact of the Trump administration on carbon capture storage will be?
What is Carbon Capture Storage? Why does it matter?
Carbon Capture Storage (CCS) is a mitigation innovation that consists of capturing CO2 (either directly in the air, referred to as DAC, or pre/post fuel combustion in power plants) to then transform and store it as a liquid-like form, supercritical CO2, deep below the earth’s surface. To ensure CO2 doesn’t leak and come back to the surface, it is injected into solid impermeable rocks with which the CO2 will chemically react and become trapped. According to a Nature article, this technique is leak proof enough that more than 98 percent of the injected CO2 will remain stored for over 10,000 years.
You may ask yourself, why does CCS matter so much and why is the IEA so ambitious about it? Well, it’s mainly because of its market potential. Indeed, the significance of the technology resides in its transitional aspect: the world is facing a power demand surge, while power generation is also the largest emitter of CO2. In the scenario where there is no use of CCS but we still want to achieve our net zero goal, we would need to virtually eliminate coal fired, as well as patent gas, power generation, implying significant early retirements for a quarter of the current fleet and a potential for stranded assets, making this scenario highly unviable.
This is where CCS becomes interesting. By tackling emissions from existing plants, it allows for a smoother transition to cleaner energy sources while maintaining energy security. The flexible demand for power inherently creates a carbon market, estimated by McKinsey to have the capacity to be worth up to 1.3 trillion. With 37 countries having CCS projects in various stages of development, carbon capture is definitely a technology to be on the lookout for in the next few years.
For example, the United Kingdom started a cluster sequencing process in October 2024 with £21.7 billion of funding for carbon capture and storage projects. The choice of a cluster sequencing process reduces costs and accelerates industrial decarbonization, which would allow not only a smoother transition into a competitive market (especially with the two main tracks) but also cross border transport. In the United States, in Texas to be precise, the largest project yet is about to start its first phase of operation in a few months, Stratos. This $1 billion project is expected to capture 500,000 tons of CO2 per year, leveraging the Inflation Reduction Act’s (IRA) 45Q tax credits for carbon removal.
And the United States in all of this?
In the United States, the Department of Energy does provide some incentives to companies, especially through the 45Q tax credit, of up to $85/t of CO2 removed—an initiative that provides strong economic benefits to the United States and companies involved, creating new jobs and giving them an opportunity to correct for their past negative impacts on the environment (although risks of greenwashing remain). For instance, an oil company could heavily promote its investment in a CCS project capturing a fraction of its total emissions, effectively using the project’s positive image to distract from its continued expansion of fossil fuel extraction, thus exaggerating its commitment to climate action.
However, the prospects of CCS in the United States are very much unclear at the time of writing. The 45Q tax and other measures of the IRA benefit both parties, and although President Trump pledged to repeal the IRA, it is still expected he will align with the big oil and gas companies’ interests who see benefits in CCS. He also made promising plans for the funding of different types of carbon removal projects ($1.8 billion in DAC). But will that be enough, considering how much those high cost projects rely on IRA tax credits? The future of CCS will very much depend on whether President Trump decides to actually repeal the IRA. This leaves the question of whether CCS is a tangible opportunity for climate change.
Challenges and criticisms of CCS
CCS has been under a lot of fair critique — it is worth asking if the high cost and scale is worth the investment. Again, the largest project, Stratos, should capture 500,000 tons of CO2 per year, pretty far from the 7.6 Gt objective. Hence, either that goal is unreasonable and maybe we should consider other options or a major step up is needed. The current impact of CCS on mitigating climate change is also quite limited if we compare it to the total greenhouse gas emissions in 2023, 40GtCO2e. And we haven’t even mentioned the negative perception of the technology: that it just gives us excuses to 1) greenwash 2) delay and limit our transition to more sustainable technologies.
Conclusion
Carbon capture and storage is definitely an entry point for companies and people to support climate action and decarbonization efforts. However, with its future unclear in the United States, the high costs, the limited scale of projects as well as the risk it’s no more than greenwashing, a major step up will be needed. Both governments and the private sector will need to be involved to finance this solution if it’s still worth the investment.
Reader Question:
As we weigh the promise of CCS against its current limitations, how can we ensure that investments in this technology complement rather than hinder the urgent transition to renewable energy sources?
Join the conversation on Slack.
The Institute for Climate and Sustainable Growth is a collaborator of the UChicago Sustainability Dialogue, but is not responsible for the content.