Carbon Capture, Utilisation and Storage

Countries and regions making notable progress in CCUS include:

• The United States announced important opportunities in 2023 that are expected to boost CCUS project development, including USD 1.7 billion for carbon capture demonstration projects and USD 1.2 billion for direct air capture (DAC) hubs under the 2021 Infrastructure Investment and Jobs Act.
• The European Union issued around USD 1.5 billion to CCUS projects under the latest Innovation Fund round, and over USD 500 million to CO₂ transport and storage projects under its Connecting Europe Facility programme. Other notable funding for CCUS projects occurred in the Netherlands (USD 7.3 billion) and Demark (USD 1.2 billion). This is boosting project development, including first Dutch transport and storage project Porthos reaching a final investment decision (FID) to start injecting 2.5 Mt CO₂ per year in offshore gas fields in 2027, while injection for the first phase (25 kt CO₂ per year) of the Ravenna CCS hub in Italy is set to start in 2024. Additionally, FIDs were reached for five capture facilities across application including in ammonia and for two hydrogen facilities in the Netherlands, and in bioenergy with CCUS in Denmark.
• Germany made its re-entry into CCUS with the release of its carbon management strategy that identifies CCUS as a crucial to meeting the country’s carbon neutrality ambitions by 2045. In addition to the strategy, the government plans to amend legislation to allow for the regulation of CCUS activities, including offshore CO₂ storage.
• Japan is quickly advancing its CCUS efforts with the selection of seven large-scale projects to capture and store around 13 Mt CO₂ per year in 2030. It is also progressing on its draft CCS Business Act, which will establish a legal framework for CCUS across the value chain, and proposal to amend the London Protocol to allow for the transboundary storage of CO₂. 
  

There are now around 45 commercial capture facilities in operation globally, with a total annual capture capacity of more than 50 Mt CO₂. Close to ten large-scale (capture capacity over 100 000 tCO₂/year, and over 1 000 tCO₂/yr for DAC applications) capture facilities entered operation in 2023, including the Blue Flint ethanol project, Linde Clear Lake capture facility, and Heirloom and Global thermostat’s first 1,000 tCO_2/yr facilities in the United States, and four projects in China (the Jiling Petrochemical CCUS facility, the CNOOC Enping oil field, the first phase of the Guanghui Energy CCUS integration project and the China Energy Taizhou power plant). It also includes the capture facility at the Petra Nova plant in the United States, which restarted operations after a 3-year suspension. While planned capacity for 2030 increased by around 2030 since last year, the pipeline of current projects is only just around 40% of the Net Zero Scenario requirement in 2030.

Momentum behind CCUS has been growing since around the start of 2018. Since February 2023 project developers have announced ambitions for 115 Mt CO₂ per year of additional capture capacity 2030.¹

1. Specific CO₂ transport and storage related activities and progress are reported in CO₂ Transport and Storage.

Currently, around 65% of operating CO₂ capture capacity is at natural gas processing plants, one of the lowest-cost CO₂ capture applications, but the widespread adoption of economy-wide decarbonisation targets for 2050 is stimulating the diversification of CO₂ capture applications towards sectors that are key to reaching net zero. These include hard-to-abate industries, the power sector, the production of low-emissions hydrogen and ammonia, and atmospheric carbon dioxide removal. Based on the current project pipeline, by 2030 annual capture capacity from both new construction and retrofits could amount to around 95 Mt CO₂ from hydrogen production, around 90 Mt CO₂ from power generation, around 50 Mt CO₂ from industrial facilities (e.g. cement and steel production), and around 65 Mt CO₂ from DAC plants.

Announcements are however just the first step: whether all projects materialise continues to be an open question. As of February 2024, capture capacity that is either already in operation or has reached FID still accounts for just 20% of announced capture capacity for 2030. Two-thirds of FIDs taken in 2023 involved these use cases, versus only 40% in 2022. But greater ambition is needed in some sectors – particularly industry, which currently makes up less than 10% of announced capacity. It would need to reach a quarter of all of CO₂ captured by 2030 in the Net Zero Scenario.

The geographic distribution of CO₂ capture projects in development is diversifying, with projects now being developed in more than 50 countries. Beyond North America and Europe, good progress has also been made in:

• Asia Pacific (including China), four new capture facility started operations in China in 2023, and planned capture and storage capacity could reach 50 Mt CO₂ and 85 Mt CO₂ per year by 2030, respectively.
• The Middle East, where around 15 projects are in development across the region in addition to the three already in operation. In 2023, two CO₂ transport and storage hubs were announced in Bahrain and in the United Arab Emirates, and ADNOC reached a FID on the construction of a 1.5 Mt CO₂ per year capture facility at Habshan-Bab gas plant. 
  

Several technological innovations that have been proposed to reduce CCUS costs for power generation are now being tested:

• NET Power’s 50 MW clean energy plant (commissioned in 2018) is a first-of-its-kind natural gas-fired power plant employing Allam cycle technology, which uses CO₂ as a working fluid in an oxyfuel supercritical CO₂ power cycle, which could significantly reduce capture costs.
• Net Zero Teesside Power in the United Kingdom is expected to come online in 2027 and could become one of the first commercial-scale gas-fired power stations with CCUS. The project was named as an investment priority in a UK government announcement in March 2023.
• A large-scale demonstration capture unit was also retrofitted at the Taizhou coal power plant in China, with the capacity to capture 0.5 Mt CO₂ per year.

While the most advanced and widely adopted capture technologies are chemical absorption and physical separation, other separation technologies under development include membranes and looping cycles (such as chemical looping and calcium looping).

In addition to technology improvements, different trends could further improve the techno-economic performance of CO₂ capture. Examples include modularisation of capture systems within self-contained, plug-in systems (with the potential to reduce land footprint, costs and lead times of capture retrofits across applications) and hybridisation of different capture technologies within capture systems (to increase capture rates while reducing costs and/or energy penalty).

Higher CO₂ capture rates will be essential for CCUS to play its role in the transition to a net zero energy system. CCUS-equipped power and industrial plants operating today are designed to capture around 90% of the CO₂ from flue gas. While there are no technical barriers to increasing capture rates beyond 90% for the most mature capture technologies, capture rates of 98% or higher require larger equipment, more process steps and higher energy consumption per tonne of CO₂ captured, which increases unit costs. However, initial results based on chemical absorption systems applied to power generation plants are promising, showing that CO₂ capture rates as high as 99% can be achieved at comparably low additional marginal cost relative to the cost of deploying 90% capture.

• Public funding: Government funding for CCUS continued in 2023 as ongoing subsidy programmes in the United States and Europe made over USD 20 billion available to CCUS projects. This includes the USD 1.7 billion that was made available to carbon capture demonstration projects and the USD 1.2 billion for DAC hubs promised under the 2021 Infrastructure Investment and Jobs Act in the United States. In the Netherlands, the SDE++ scheme allocated over USD 7.3 billion to CCS projects that will connect to the massive Aramis CO₂ transport and storage network. In Demark, Ørsted received USD 1.2 billion from the CCUS Fund for its capture retrofit project on the Asnæs Power Station. On top of individual country-level funding, the European Commission also issued around USD 1.5 billion to CCUS projects in the industry sector under the latest Innovation Fund round, and over USD 500 million to CO₂ transport and storage projects under its Connecting Europe Facility programme.
• Strategic signalling: With renewed recognition of the need to collectively do more on CCUS, 2023 saw the creation of significant new initiatives. Launched at the Major Economies Forum in April 2023, the Carbon Management Challenge features a joint call to action for governments to accelerate the deployment of CCUS technologies. In early 2024, Bahrain became the newest signatory to the Challenge, which includes 20 countries and the European Commission. Several countries have also advanced strategic plans to support CCUS. For example, Canada finalised its Carbon Management Strategy at the end of 2023, while the European Commission released its Industrial Carbon Management Strategy in early 2024, which sets out a comprehensive policy approach to help the European Union develop at least 50 Mt of capacity by 2030 and 280 Mt by 2040. Other European countries, including France and Germany, are simultaneously developing their own strategies.
• Cross-border collaboration: In some regions, countries are looking to one another to collaborate on cross-border CCUS projects. Such is the case in the North Sea, where Denmark, Belgium, the Netherlands and Sweden each established an arrangement on cross-border transport of CO₂ with Norway in April 2024, making it possible to transport and store CO₂ between the countries. Sweden and Denmark concluded a similar arrangement. In March 2024, Denmark and France signed a similar arrangement. Such deals are required under the London Protocol, an international agreement that regulates the cross-border transport of CO₂ for offshore storage. Japan, which is actively progressing on amending the London Protocol, is also pursuing opportunities to export its captured CO₂, with two of its seven government-supported CCS projects geared to ship CO₂ from Japan to Southeast Asia. To this end, in September 2023 Japan signed a memorandum of co-operation with Malaysia’s national oil company, PETRONAS, on the transboundary transport and storage of CO₂.
  

• Abdul'Aziz A. Aliyu, Technology Collaboration Programme on Greenhouse Gas R&D/IEAGHG  
• Keith Burnard, Technology Collaboration Programme on Greenhouse Gas R&D/IEAGHG  
• Tim Dixon, Technology Collaboration Programme on Greenhouse Gas R&D/IEAGHG  
• Nirvasen Moonsamy, Oil and Gas Climate Initiative 
• Rachael Moore, CO2 Management Solutions.