A closer look at CCS: problems and potential

This briefing examines the current state and potential of carbon capture and storage (CCS), noting that the vast majority of operational projects are linked to the oil and gas industry, specifically for enhanced oil recovery (EOR). While CCS is presented as a tool for decarbonising hard-to-abate sectors like cement and steel, the document highlights significant challenges including high costs, inconsistent capture rates, and the risk that the technology is used to prolong fossil fuel extraction.

• The majority of operational CCS projects are integrated with the oil and gas industry, primarily to facilitate enhanced oil recovery (EOR). Of the 41 active CCS projects worldwide, 82.5% of captured carbon is used for EOR, and 53% of overall capacity is dedicated to natural gas processing to remove CO2 that would otherwise make the gas unsaleable.
• US government subsidies for CCS have historically prioritised and continue to support oil and gas production. The 1986 US Federal EOR Tax Incentive provided a 15% tax credit for CO2 capture and injection, and the 2022 Inflation Reduction Act updated Section 45Q to provide credits ranging from USD 12 per metric ton for EOR up to USD 130 for direct air capture (DAC).
• CCS projects in the oil and gas sector often serve to maintain the financial viability of extraction operations. Examples include Equinor's Sleipner project in Norway, which reduced carbon dioxide emission fees, and Shell's Quest project in Canada, which uses tax credits and carbon credits to support the Scotford Upgrader's production of synthetic crude oil.
• The efficacy of CCS is hindered by inconsistent capture rates and high implementation costs. Reported capture rates vary significantly, such as the Century Gas Processing Plant in Texas at under 10%, the Gorgon facility in Australia at 45%, and the Boundary Dam plant in the USA at 65%. The IEA describes the history of CCUS as one of "unmet expectations" and slow deployment.
• The IPCC indicates that CCS is less cost-effective for reducing industrial emissions than alternatives such as fuel switching (electrification), improving energy and material efficiency, and enhanced recycling. Additionally, the European Commission has noted that the lack of CO2 storage sites hampers the development of a CCS value chain in the EU.
• CCS potential varies across heavy industry sectors: it is considered essential for eliminating limestone calcination emissions in cement (which represent 60% of GHG emissions in best-available technology plants), while in steel, it is viewed as a way to capture residual emissions after material efficiency and fuel switching. Current operational projects in chemicals are concentrated in China, with a capacity to capture 1.75 million tonnes of CO2 per year, mostly for EOR.
• In the power sector, CCS is often tied to EOR to offset high operating costs, including the 'energy penalty'. The Petra Nova project in the USA was temporarily halted in 2020 due to crashing oil prices, demonstrating the financial dependency of these projects on hydrocarbon markets.

APA

Team, Z. (2024). A closer look at CCS: problems and potential. Zero Carbon Analytics. https://zerocarbon-analytics.org/insights/briefings/a-closer-look-at-ccs-problems-and-potential/

Chicago

Team, ZCA. A closer look at CCS: problems and potential. Zero Carbon Analytics, 2024. https://zerocarbon-analytics.org/insights/briefings/a-closer-look-at-ccs-problems-and-potential/.

Wikipedia

{{cite report |last1=Team |first1=ZCA |title=A closer look at CCS: problems and potential |publisher=Zero Carbon Analytics |date=28 February 2024 |url=https://zerocarbon-analytics.org/insights/briefings/a-closer-look-at-ccs-problems-and-potential/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{team2024closer, author = {Team, ZCA}, title = {{A closer look at CCS: problems and potential}}, institution = {Zero Carbon Analytics}, year = {2024}, month = feb, url = {https://zerocarbon-analytics.org/insights/briefings/a-closer-look-at-ccs-problems-and-potential/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }