Article - The Carbon Capture Boom is Starting to Crack

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As governments have put increasing pressure on industries to decarbonise their operations, companies that cannot simply switch to renewable alternatives have invested heavily in CCS activities to reduce emissions. While many have criticised companies for relying on carbon capture rather than cutting emissions at the source, CCS tech has been expected to help companies support a green transition as they assess possible long-term solutions.

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Despite the clear optimism around CCS technology, the cracks are starting to show as several companies fail to see the results expected from CCS operations. An Institute for Energy Economics and Financial Analysis (IEEFA) review of 13 operating CCS projects around the world found that most captured below design levels of 90 per cent, while some failed outright, highlighting the ongoing technical challenges of CCS as a solution and the potential for further cost escalation per tonne. According to the Global CCS Institute, only 50 facilities were operating worldwide in 2024, with the capacity to capture around one thousandth of global emissions.

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CCS technology is extremely expensive to incorporate into operations, with many projects relying on taxpayer support. For this purpose, key industry players suggested that CCS should only be pursued after other green solutions during a 2025 conference in London.

In the United States gas industry, the cost of adding CCS to U.S. plants is estimated at $20 to $30 per megawatt hour (MWh), which could potentially double the cost of power production. Meanwhile, in Europe, the think tanks Agora Industry and Oeko-Institut, estimate the cost of carbon capture, transport, and storage at between $170 and $340 a tonne. “According to these calculations, the costs of existing or planned CO2 storage projects are at least 50 per cent higher than previous forecasts,” the think tanks stated in a press release.

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Several fossil-fuel dependent industries and companies have long promoted CCS technology as key to decarbonising operations. This has helped improve the image of CCS and allowed major oil companies and heavy industry to get government backing. However, the high cost of CCS technology use, as well as the barriers to commercial rollout, suggest that CCS promotion may have been one big (and fairly successful) PR stunt. While it may still be used in a limited capacity, governments should be encouraging companies to invest in long-term decarbonisation solutions if they hope to achieve a green transition.

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