NN#4: Carbon Capture Follies

Carbon capture and sequestration (CCS) and carbon capture, utilization, and storage (CCUS) are really having a moment. Articles about it show up in my news feeds every day.

One may well ask why. It’s not like it has suddenly become a commercial, scalable technology or anything. In fact, as we discuss in this week’s Transition Times newsletter, the world’s operational carbon capture and permanent storage capacity is laughably negligible. One study published in late 2025 and led by Imperial College academics presented the first audited total amount of industrially derived CO₂ permanently stored underground through carbon capture and storage. It found that since 1996, the total amount of CO₂ that has been sequestered up to 2024 globally was 383 million tonnes. By comparison, total energy-related emissions globally are roughly 38 Gt/year.

In other words, the total amount of CO₂ that has been permanently stored underground so far, for all time, globally, is about 1% of annual emissions just from energy consumption. Not counting CO₂ from agriculture, industrial processes, land use, and so on.

For another point of reference, IEA estimates that global capture capacity could increase from around 50 million tons per annum (Mtpa) today to 430 Mtpa by 2030. But even 430 Mtpa is about 1.1% of annual energy-related emissions. And still well below the roughly 1 gigaton (Gt) per year thought necessary under net-zero pathways for the global energy sector toward mid-century.

So far, CCS/CCUS is a giant nothingburger. So what’s all the news coverage about?

In ExxonMobil’s case, it’s a chance to tout its investment in CCS:

The US group is building the world’s largest CCS business on the US Gulf Coast as it seeks to connect industrial customers to a 900-mile network of pipelines that can transport carbon dioxide into porous rock formations deep underground.

Dominic Genetti, senior vice-president for CCS, said Exxon was spending hundreds of millions of dollars a year drilling wells and connecting customers to its $5bn-plus network of pipelines across Texas, Louisiana and Mississippi — and was also looking to expand the business overseas.

[…]

The economics of Exxon’s CCS push depend on climate regulations, carbon tariffs and subsidies once fiercely opposed by much of the oil industry.

While a first wave of facilities in recent decades struggled to make money even with public subsidies, global investment in CCS rose to $6.6bn last year from $4.1bn in 2024, while the number of plants operating commercially rose by a third to 77, with a further 44 under construction.

And that’s…. about all of the actual hard data in the article. All the rest was about political posturing, other commercial plans, hand-waving at the presumed future demand from data centers, and the like.

There was no mention of how much carbon was actually sequestered, or indeed what happened to the carbon at all.

Which is pretty typical for the sector, actually. Starting in 2003, we were treated to years of coverage of FutureGen, the flagship “clean coal” project in the US. It was world's first coal-fired power plant to integrate CCS with integrated gasification combined cycle (IGCC) technologies. It was to capture and store CO₂ emissions from coal combustion in deep underground saline formations while producing hydrogen for electricity generation and fuel cell research.

But iteration after iteration of the plant failed, due to escalating capital costs, permitting delays, financing problems, legal challenges, and competition from rapidly falling natural gas prices and renewables. The same problems that bedevil CCS projects today.

Between FutureGen 1.0 and 2.0, however, the project did torch over $378 million in taxpayer subsidies while making it seem like the oil industry was taking emissions seriously and would have a way to capture its emissions eventually. That helped extend the oil industry’s social license to operate for a solid decade or more, which was of course the entire purpose of the project.

Nearly all commercial CCS projects to date have been paired with enhanced oil recovery (EOR) projects, which inject CO₂ into oil wells in order to increase their production of new oil. How much CO₂ gets permanently sequestered in these projects is highly uncertain, given the still-nascent state of the industry, even after two decades of public investment in it. EOR projects can probably retain 60-90% of injected CO₂ underground over time, but exact retention percentages vary widely by reservoir, flood design, and project maturity, and the literature does not support a single universal retention percentage applicable to all projects. IEA’s 2015 report on the subject was blunt [emphasis mine]:

CO₂-EOR is currently not widely used for storage, as there is no business case for storage. In absence of a significant carbon price, a business case could, however, be created through relevant incentive policy frameworks in the short term.

With novel practices it is possible to turn today’s EOR from a pure petroleum production tool to a means of storing CO₂ in large quantities – namely EOR+. Advancing to a business model in which long-term CO₂ storage is a revenue stream requires a fundamental shift in thinking and operations. It requires that operators re-consider reservoir management practices and operational choices that explicitly incorporate both increased oil production and storing of CO2 as joint business objectives. At present, no site is pursuing this dual objective.

How much carbon has actually been permanently stored away using EOR+ methods in the decade since that report was published is uncertain, and estimates vary substantially. The only significant such project appears to be the Weyburn-Midale Carbon Dioxide Project in Saskatchewan, Canada. The Shute Creek project in LaBarge, Wyoming and the Century Plant in West Texas handle large amounts of CO2, but much of that CO₂ was used for EOR rather than dedicated storage, and the climate benefit is debatable, depending on the accounting framework used and whether downstream oil combustion is included. One 2024 study for the California Air Resources Board called CO2 EOR “a moral failure, a climate failure, and a threat to public health and the environment, all while being publicly funded.”

Who will buy?

Accordingly, the CCS industry has moved on from underground injection to dedicated geological storage in saline aquifers. There are now operational datasets from projects like Sleipner, Snøhvit, Quest, Illinois Basin–Decatur, and newer projects in the US.

However, the sum total of CO2 that has been stored permanently by humanity to date in saline aquifers is likely less than 100 million tonnes. There are numerous technical issues to be resolved and a 2024 paper in Nature Communications estimated that achieving even 5–6 Gt/year of global geological storage by 2050 would represent an enormous increase from what is being stored today.

The bottom line on CCS is that it does not have a viable standalone business case without policy support or a sufficiently high carbon price, and no jurisdiction has yet created a durable market structure that can achieve gigatonne-scale CCS deployment primarily through carbon pricing alone.

That’s because storing carbon dioxide permanently does not produce a saleable commodity, but it does add cost and energy consumption, and depends on someone paying for avoided emissions.

A peer-reviewed paper published in May, titled “Recent advancements and assessment of carbon capture technologies for climate crisis mitigation,” surveys the state of CCS and CCUS, critically evaluating performance, costs, and deployment barriers across multiple capture pathways. The paper emphasizes that while a range of capture approaches is technically mature, scaling remains constrained by energy penalties, high energy costs, infrastructure needs, and unresolved questions about long‑term storage capacity and environmental impacts:

Techno-economic analysis indicates that point-source capture technologies currently cost ~$50–100 t−1 CO₂, whereas engineered carbon removal approaches remain significantly higher at ~$200–600 t−1 CO₂.

The European Union Emissions Trading System, or EU ETS, the largest and most advanced carbon trading market in the world, currently prices carbon at $91/tonne. The US 45Q tax credit regime, the first large-scale attempt to create a durable business model for CCS in the US, is in a similar range, offering up to $85/tCO₂ for industrial CCS storage, with higher payments for DAC or other removal methods that aren’t yet able to achieve anything meaningful. So the existing carbon markets might be able to sustain investment in point-source CCS technologies (such as power plants) but direct air capture of CO2 is still unaffordable under carbon markets.

And these are compliance markets we’re talking about, which necessarily means that they only apply to certain sectors and technologies within proscribed limits. In the absence of mandates, tax credits, or public funding, CCS is still a commercial non-starter, as it has been for literally decades, even after burning billions of dollars in taxpayer subsidies.

So let’s return to our previous question. Why is it getting so much breathless press attention now?

Consider Carbon TerraVault’s press release from May 14:

The injection of CO2 at California's first carbon capture and storage project will be a defining moment, not just for CTV, but for California's energy future," said Francisco Leon, CRC's President and Chief Executive Officer. "This project will demonstrate to regulators, partners, and the market that carbon storage works here, at scale, and in a way that is safe, reliable, and commercially viable. CTV was built on this foundation, and is positioned to advance the next steps in California's decarbonization.

Or this report from S&P Global from April 14:

The carbon capture, utilization and storage sector entered its industrial hardening phase in 2026. Global operational capture capacity has reached 73 million metric tons/year, with nearly 1,300 projects in the pipeline, according to S&P Global Energy Horizons Clean Energy Technology Analytics. The reality shows a market bifurcating between regions that have solved regulatory challenges and those still navigating bureaucratic obstacles. From Iowa's cornfields to the North Sea's shipping lanes, the future projects have clear regulation and proven economics.

Or this market report from January 14:

2026 is poised to be a pivotal year in transitioning CCUS from primarily pilot and demonstration stages toward broader commercial deployment, influenced by shifting policy environments, rising investment, and growing technological maturity.

The overall global CCUS capacity remains modest relative to the scale of global emissions, but it’s showing clear growth. As of early 2025, global operational CO2 capture and storage capacity stood at roughly 50 million tons per annum (Mtpa) – up slightly from the previous year, according to data from the International Energy Agency (IEA).

A broader view of project activity highlights hundreds of projects in the CCUS value chain, reflecting increasing momentum. Reports identify well over 600 CCUS projects in various pipeline stages, with an approximate 15% year-on-year increase in activity, supported by tripling investment toward roughly $6.4 billion (as of 2024).

The time-tested strategy here is obvious: Tout the large number of projects in the pipeline without mentioning that most of them will never materialize; and tout the size of the investment in them as proof that the technology is real, despite the long track record of CCS projects burning billions of dollars in taxpayer money without producing results.

If the business case is so good, why is BP choosing this moment, when the CCS market is allegedly about to take flight, to sell a portion of its equity in projects that have reached “major milestones?”

Another recent peer-reviewed paper offers its own rather dour assessment of the sector [emphasis mine]:

Despite over $40 billion invested globally, Carbon Capture and Storage (CCS) captures and stores less than 0.1% of annual global CO2 emissions, raising serious questions about its efficacy as a climate solution. This review addresses the critical disconnect between modelled expectations and empirical outcomes of CCS, offering a comprehensive, evidence-based reassessment of its technical, economic, and strategic performance. The analysis integrates data from peer-reviewed literature, international reports (IPCC, IEA, Carbon Tracker), and investigative journalism, evaluating both failed and superficially successful projects, including Petra Nova, Gorgon, Sleipner, and In Salah. These case studies expose recurring patterns of cost overruns, suboptimal capture rates, geological uncertainties, and public liability transfer. Projects hailed as “successful” often fall short when scrutinized against durability, scale, and emissions offset claims. While these findings raise valid concerns, this review does not categorically dismiss CCS. Instead, it emphasizes the need for strategic deployment in specific, hard-to-abate sectors where alternatives are limited such as cement production or legacy infrastructure retrofits. Beyond critique, the review explores proven alternatives: renewables, bio-based removals, mineralization; that offer higher scalability and permanence with fewer systemic risks. A predictive evaluation framework is introduced to match/compare capture and mitigation/avoidance technologies to emission contexts using criteria such as CO2 concentration, energy demand (2.5–8 GJ/tCO2), cost ($50–600/tCO2), scalability, and permanence. Ultimately, the findings underscore that continued reliance on CCS is a high-cost gamble that risks delaying the deployment of truly effective climate solutions; yet, if strategized properly, 2026–2030 could still mark a decisive turning point in determining its role in the energy transition.

No great mystery

The reason for this fresh round of CCS hype is not because the technology has massively improved, or because anyone thinks it’s a real climate solution. It’s simply because the fossil fuel industry needs CCS to work if it’s going to have a future, and because AI data centers burn a lot of natural gas but need to retain their social license to operate.

The reality is that wind and solar have killed the investment case for gas. We’ve come to the end of the “bridge” to a low-carbon future that gas was asserted to be in the late 2000s–early 2010s policy framings. It’s over.

And now the outlook for oil has taken a huge and unexpected hit thanks to the ongoing closure of the Strait of Hormuz. Now, the world is reaching for electrification as a way to get off the oil teat.

Data centers, and their vast appetite for natural gas to power their plants, are just about the only growth sector left for fossil fuels. But the climate imperative can’t be sidelined forever. Eventually, even the AI juggernaut needs to get aligned with efforts to stop global warming. Because the tech titans behind it, like Meta and Microsoft and Amazon and Alphabet, all have decarbonization targets to reach. Or at least, they did, before the AI gold rush made them extremely inconvenient.

So the massive industries pouring trillions of dollars into AI data center infrastructure right now need CCS to work. Because if it doesn’t, they’ll have to rely on new nuclear reactors (conventional or SMRs), which will take far too long to build for the AI gold rush, or they’ll have to rely on utility-scale wind and solar projects, which have their own hurdles and can’t be built just anywhere. Remember, there’s a huge concentration of data centers in Virginia. There’s no place in that vicinity that could host solar or wind farms sufficient to power those data centers. (And Trump has gone way out of his way to kill offshore wind projects off the coast of Virginia, so that’s a nonstarter too.)

And that’s the simple, sad truth about the new CCS craze. It doesn’t really work, but as long as the fossil fuel and AI industries need it, we’re going to be hearing about it. The end.

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Sources

Nicola Clarke, “383 million tonnes of CO2 permanently stored underground, a new report shows,” IEAGHG, November 17, 2025.

Carbon Capture Utilisation and Storage, IEA.

Myles McCormick and Amanda Chu, “Can Exxon build the world’s biggest carbon capture business?,” Financial Times, May 25, 2026.

Nicole Kaeding, “Admitting FutureGen’s Failure,” Cato Institute, February 10, 2015.

International Energy Agency, “Storing CO2 through Enhanced Oil Recovery”, IEA GHG, 2015.

Weyburn-Midale Carbon Dioxide Project, Wikipedia.

“The False Promise and Potential Health Harms of Carbon Dioxide Enhanced Oil Recovery (CO2 EOR) as a Tool of Climate Mitigation,” Science and Environmental Health Network and Bold Alliance, August 2024.

Richard H. Worden, Mike Stephenson, and Jon Gluyas, “Carbon Dioxide Capture and Storage (CCS) in Saline Aquifers versus Depleted Gas Fields”, Geosciences, 2024, Vol. 14, Article 146. DOI: https://doi.org/10.3390/geosciences14060146

Philip S. Ringrose and Mark A. Meckel, “Storage of Carbon Dioxide in Saline Aquifers”, Annual Review of Chemical and Biomolecular Engineering, 2021, Vol. 12, 157–184. DOI: https://doi.org/10.1146/annurev-chembioeng-093020-091447

Yingqi Zhang and colleagues, “The feasibility of reaching gigatonne scale CO2 storage by mid-century”, Nature Communications, 2024, Vol. 15, Article 7608. DOI: https://doi.org/10.1038/s41467-024-51860-4

Press release: “Carbon TerraVault Provides First Quarter 2026 Update,” Carbon TerraVault, LLC, May 5, 2026.

Yufei Li and Eric Wright, “2026 CCUS: Navigating the tides of the great realignment,” S&P Global Commodity Insights, April 14, 2026.

Yamini Kalia in ​Bengaluru and Stephanie Kelly, “BP to sell stakes in flagship UK carbon capture projects in Northern England,” Reuters, May 2, 2026.

Stella Yotova, “What’s Next for Carbon Capture, Utilization & Storage (CCUS) in 2026?,” Carbon Herald, January 13, 2026.

Bidattul Syirat Zainal, I.M.R. Fattah, Hwai Chyuan Ong, Oki Muraza, Normaniza Osman, and T.M. Indra Mahlia, “Recent advancements and assessment of carbon capture technologies for climate crisis mitigation,” Chemical Engineering Journal, Vol. 536, Article 175776, May 15, 2026.
DOI: https://doi.org/10.1016/j.cej.2026.175776

Live Carbon Prices Today, CarbonCredits.com

M.H. Rasool, “Carbon capture and storage: An evidence-based review of its effectiveness, sustainability and strategic role in climate mitigation”, Petroleum Research, 2025. DOI: https://doi.org/10.1016/j.ptlrs.2025.05.002