TT#5: CCS in the spotlight (again)

Thanks to the AI data center boom and its dependence on natural gas-fired generators, there has been revived interest in carbon capture and storage (or sequestration) technologies known by various acronyms such as CCS, CCUS, CDR, DAC, DACCS, and BECCS. (We’ll use CCS for casual reference to the whole group.)

In today’s Transition Times, we take a look at some of the recent coverage of the subject from various sources, which we hope will give you a more nuanced understanding of the sector and perhaps a more critical eye on what is being said about it.

General media coverage of CCS tends to be standard reporting, repeating facts and industry talking points without any sort of attempt to validate the claims or put them in perspective. If you want to go beyond industry claims and actually understand the value and potential of CCS to humanity, you usually have to dig a bit.

For a refresher on the subject of CCS and why it matters, try this short explainer from the London School of Economics Grantham Institute.  

On to our harvest for this week…

Amy Westervelt and the rest of the fine team at Drilled have a new season called “Carbon Cowboys” about how the long history of attempts to capture carbon while making ethanol has been a major industry in the US and Brazil:

In early September 2025, a handful of Brazilian government officials headed to North Dakota on a mission. It was a technical mission. They were there to see a shiny new green technology in action. The idea behind this new technology was simple. When you turn corn into ethanol, it generates carbon dioxide, and that's a problem if you're trying to be a green fuel. But now, people from Iowa to North Dakota were capturing that carbon dioxide, storing it, and selling it. Never mind that they were selling it to people who would inject it underground to get more oil out. Some of it would surely still stay underground, and if you tilted your head and squinted a bit, that made it a climate solution.

The American company selling the Brazilians on this idea had a lot riding on these officials believing that carbon capture connected to ethanol was a great green success story, win-win for industry and the environment, an American dream they could take home to Brazil. But had the visiting bureaucrats scanned the local newspapers, they might have found a different story.

Drilled has been doing excellent reporting on the oil industry and related subjects for years, so if you haven’t checked out their podcast, you should. It’s free.  

S&P Global’s Energy Evolution podcast has also been tackling the subject of carbon as a commodity in several recent episodes, with a focus on the European Union Emissions Trading System (EU ETS), the largest and most advanced carbon trading market in the world. The March 31 episode considers renewed political pressure from member states over concerns that the ETS is hurting their industrial competitiveness:

political pressure from member states has dragged EU Allowance prices down […] why industrial competitiveness concerns are dominating the climate policy debate in Brussels […] how the EU's Carbon Border Adjustment Mechanism is evolving from a climate tool into an instrument of industrial policy – with major implications for global trade.

And the May 5 episode looks at how industry is pushing back out of concern for their own global competitiveness. (Nota bene: S&P Global owns Platts, which has published pricing and market intelligence for the oil and gas industry for over a century, including benchmark natural gas and LNG price assessments that are foundational to global gas trading.)  

The EU's methane emissions framework has drawn pushback from major gas producers and industry groups, which warn that critical implementation details remain undefined even as a key 2027 regulatory deadline looms […] asks whether Europe's methane regulation will set a new global standard for climate accountability or trigger an energy crisis by impacting long-term contracts and reshaping global gas trade flows.

Back in December, a couple of experts from The NorthBridge Group, a consulting firm serving the electricity and natural gas sectors, wrote a piece for Utility Dive detailing the requirements that CCS projects at power plants will need to meet in order to be eligible for tax credits:

In the absence of regulatory mandates, CCS projects will only advance if they are able to secure additional funding for their low emissions output to offset the cost of carbon capture and disposal. While federal 45Q tax credits provide significant contributions toward CCS project economics, to date this has not proven sufficient to spur widespread adoption of CCS. Clean energy buyers who are willing to pay a premium for low-carbon, firm electricity may be a key force in enabling the viability of CCS projects, but these buyers will need a way to claim the low-carbon attributes of this electric supply.

There’s been a lot of interest in direct air capture (DAC) technologies as well, although there’s not a huge amount of commercial activity to cover. One worthwhile piece published last year by the philanthropically-supported Climate Interactive nonprofit was about how they programmed their “En-ROADS” simulator to explore direct air carbon capture and storage (DACCS) and see what it can tell us about the deployment of the technology so far, including its potential; the enormous deployment gap between DAC’s theoretical role in net-zero pathways and current reality; its uncertain future cost and scale trajectories; and over-optimism about how further development will get it down its ‘learning curve.’ They even made a YouTube video about it. The upshot?

DACCS does not grow further because it is very expensive and it is unlikely to benefit significantly from economies of scale.

There is however a fairly significant body of academic literature on DAC cost assumptions that’s worth exploring for those interested in the sector, like a 2025 commentary from researchers at MIT:

“Direct air capture has people excited because in terms of generating carbon removal credits, they’re very high quality,” said Howard Herzog, senior research engineer at the Massachusetts Institute of Technology Energy Initiative (MITEI). But according to a recent commentary written by Herzog and colleagues at MITEI, any plans to rely on DAC to stem the surge of carbon dioxide into the atmosphere need a reality check. The plans rely on overly optimistic assumptions on cost and the ability to ramp up pilot projects to industrial scale.

“This can lead to highly misleading results that can ultimately impact the ability to reach climate stabilization goals,” Herzog and his coauthors wrote.

The cost of CCS continues to be the bugaboo. Some have hoped that data centers could be so insensitive to the cost of power and cooling that they might actually be willing and able to pay to put carbon away like no one else has before, but it’s still an open question:

Despite the announcements by Google and NextEra, most Big Tech companies have “put CCS on the back seat” for now due to its high costs and longer timelines compared with other power technologies," Peter Findlay, Director of CCUS Economics at Wood Mackenzie, told Reuters Events.

The cost of adding CCS to U.S. gas plants is estimated at $20 to $30 per megawatt hour (MWh), potentially doubling the cost of power production. Building these projects in the early stages of global CCS deployment would take time and “might slow them down,” Findlay said.

A peer-reviewed paper published in May put the cost of point-source capture technologies (such power plants with a concentrated stream of CO₂ emissions) at ~$50–100/tonne CO₂, whereas engineered carbon removal approaches (meaning things like direct air capture, or DAC) remain significantly higher at ~$200–600/tonne.  

The EU ETS 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/tonne 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), at least on paper. But direct air capture of CO₂ is still unaffordable under carbon markets.

Which goes to explain why the volumes of carbon sequestered so far are so paltry. The total amount of CO₂ that has been permanently stored underground as of 2024, for all time, globally, is 383 millions tonnes, equivalent to 1% of annual emissions just from energy consumption. That’s not counting CO₂ from agriculture, industrial processes, land use, and so on.

Some question whether it’s a solution at all. A new peer-reviewed study by public health researchers finds that investment in

renewable energy deployment yields greater combined climate and public health benefits than direct air capture across nearly all scenarios and regions, with direct air capture approaching cost-effectiveness only under highly optimistic assumptions about future technological breakthroughs.

But hard data and durable business cases have never been the main drivers of energy or carbon policy. Those tend to come out of politics, not science.

Taking us back to the subject of biofuels that we opened with: We need only look back on the history of corn ethanol subsidies in the US, as enshrined in the Energy Policy Act of 2005, which created the first federal Renewable Fuel Standard (RFS) for corn ethanol, and the Energy Independence and Security Act of 2007, which expanded the RFS dramatically.

From an energetics standpoint, corn ethanol is a complete waste and a boondoggle that has distorted US energy policymaking ever since. But since the road to the White House starts in Iowa, it is with us still. How much it has cost American consumers is still up for debate, but one 2025 study from the R Street Institute puts the additional cost of the RFS to consumers (versus just buying more gasoline) at $28 billion over ten years.

The bottom line? CCS is still a very long way from a climate solution, and still lacks the kind of incentives and policies that would be needed to make it one.

But that doesn’t mean we won’t continue to be treated to all sorts of breathless stories about CCS as long as the AI gold rush is still on. Because what the AI tech titans need is not an actual solution to the carbon emissions of their plants, but just enough gesturing in that direction to retain their social license to operate and raise more capital. 

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Sources

Esin Serin, “What is carbon capture, usage and storage (CCUS) and what role can it play in tackling climate change?” LSE Grantham Institute, March 13, 2023.

Drilled Season 15, 2026.

Energy Evolution Podcast, S&P Global.

Clara Iglesias, “Direct air carbon capture and storage (DACCS) in En-ROADS,” Climate Interactive, May 19, 2025.

“Direct air carbon capture and storage (DACCS) in En ROADS,” Climate Interactive, March 12, 2025. [YouTube]

Iain Kaplan and Gustaf Michaelsen, “CCS generation projects are coming. New ways to track and claim their emissions must follow.” Utility Dive, December 12, 2025.

Michael Abrams, “Carbon Capture Costs Needs Reassessment, Engineers Say,” ASME, April 7, 2025.

Eduardo Garcia, “Carbon capture edges forward despite cost challenge,” Reuters, March 30, 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

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

Yannai Kashtan, Joseph Pendleton, Brian Sousa, Mary D. Willis, Drew R. Michanowicz, Seth B. C. Shonkoff, and Jonathan J. Buonocore, “Direct air capture has substantial health and climate opportunity costs”, Communications Sustainability, Vol. 1, Article 67, 2026.
DOI: https://doi.org/10.1038/s44458-026-00068-0

Live Carbon Prices Today, CarbonCredits.com

Mark Z. Jacobson, Danning Fu, Daniel J. Sambor, and Andreas Mühlbauer, “Energy, Health, and Climate Costs of Carbon-Capture and Direct-Air-Capture versus 100%-Wind-Water-Solar Climate Policies in 149 Countries”, Environmental Science & Technology, Vol. 59, Issue 6, February 9, 2025.
DOI: https://doi.org/10.1021/acs.est.4c10686

Episode 253 – Bioenergy Illusions, Energy Transition Show, July 2, 2025.

Philip Rossetti, “The Consumer Costs and Climate Impacts of the Renewable Fuel Standard,” R Street Institute, June 24, 2025.