Why carbon capture needs a reality check: the gap between promises and results

01The promises vs actual performance

Carbon capture and storage (CCS) is a process by which carbon dioxide (CO2) from industrial installations or natural sources is separated before it is released into the atmosphere, then transported to a long-term storage location. The CO2 is captured from a large point source, such as a natural gas processing plant and is typically stored in a deep geological formation. Around 80% of the CO2 captured annually is used for enhanced oil recovery (EOR), a process by which CO2 is injected into partially depleted oil reservoirs in order to extract more oil and then is largely left underground. Since EOR utilizes the CO2 in addition to storing it, CCS is also known as carbon capture, utilization, and storage (CCUS).

The gap between promised and delivered carbon capture capacity is significant. Of the hundreds of projects announced over the past two decades, only a fraction have reached operational status. Many have been cancelled or indefinitely delayed. The Global CCS Institute tracks projects worldwide, and their data consistently shows that the pipeline of announced projects far exceeds actual operating capacity.

Operating projects have frequently underperformed their design specifications. Several high-profile CCS facilities have captured less CO2 than planned, experienced extended shutdowns, or operated at reduced capacity. The Boundary Dam project in Saskatchewan, one of the first commercial-scale CCS plants at a power station, has consistently captured less CO2 than its design target since beginning operations in 2014.

Scaling up from demonstration to commercial deployment has proven harder than expected. The technology works in principle, but the economics, engineering reliability, and regulatory frameworks needed for widespread deployment have not materialized at the pace that early projections assumed.

02Direct air capture energy requirements

Direct air capture (DAC) is the use of chemical or physical processes to extract carbon dioxide directly from the ambient air. If the extracted CO2 is then sequestered in safe long-term storage, the overall process is called direct air carbon capture and sequestration (DACCS), achieving carbon dioxide removal. Systems that engage in such a process are referred to as negative emissions technologies (NET).

The thermodynamic challenge of direct air capture is fundamental. CO2 makes up approximately 0.04 percent of the atmosphere, meaning that to capture one ton of CO2, a DAC system must process roughly 1,800 tons of air. The energy required to move that volume of air and separate the CO2 is substantial, regardless of the capture technology used.

Current DAC plants require between 5 and 10 gigajoules of energy per ton of CO2 captured, depending on the technology. This energy must come from low-carbon sources for the process to achieve net carbon removal. If powered by fossil fuels, the energy consumption can exceed the carbon captured, making the process counterproductive.

The cost per ton of CO2 captured via DAC currently ranges from 600 to 1,000 dollars, far above the price of carbon in most emission trading systems. Projections suggest costs could fall to 200-300 dollars per ton with scale and learning, but this would still require a very high carbon price or substantial subsidy to be economically viable.

03Carbon storage and leakage risks

Capturing CO2 is only the first step. It must then be transported, typically via pipeline, and injected into deep geological formations for long-term storage. Suitable storage sites include depleted oil and gas fields, deep saline aquifers, and unmineable coal seams. The CO2 must remain trapped underground for centuries to millennia for the storage to be effective as a climate solution.

Leakage is a persistent concern. CO2 injected underground can migrate through fractures, abandoned wells, or faulty cap rock, potentially returning to the atmosphere. Monitoring and verification of stored CO2 is technically challenging and expensive. While well-selected and managed sites are expected to retain the vast majority of injected CO2, the long-term liability and regulatory framework for storage remain unsettled in most jurisdictions.

Induced seismicity is another risk. Large-scale CO2 injection can increase pore pressure in underground formations, potentially triggering earthquakes. A 2017 study linked CO2 injection at a storage site in Algeria to seismic activity, leading to the suspension of operations. The risk varies by geology and injection rate, but it adds another layer of complexity to site selection and operation.

04Who is paying for carbon capture

The economics of carbon capture depend heavily on policy support. In the United States, the 45Q tax credit provides up to 85 dollars per ton for point-source capture and up to 180 dollars per ton for DAC, significantly improving project economics. The Inflation Reduction Act of 2022 expanded and enhanced these credits, contributing to a wave of new project announcements.

However, the level of subsidy required to make carbon capture economically viable raises questions about opportunity cost. The same public funds invested in renewable energy, energy efficiency, or electrification could potentially achieve greater emission reductions per dollar. Critics argue that carbon capture subsidies effectively transfer public money to fossil fuel companies that are best positioned to deploy the technology.

The private investment landscape is dominated by oil and gas companies, who have both the technical expertise and the geological assets for CO2 storage. This concentration of investment in the fossil fuel sector is viewed by some as evidence that carbon capture serves industry interests more than climate goals, while others argue that leveraging existing expertise is the most practical path to deployment.

05The role of carbon capture in oil recovery

Enhanced oil recovery, also called tertiary recovery, is the extraction of crude oil from an oil field that cannot be extracted after primary and secondary recovery methods have been completely exhausted. Whereas primary and secondary recovery techniques rely on the pressure differential between the surface and the underground well, enhanced oil recovery functions by altering the physical or chemical properties of the oil itself in order to make it easier to extract. When EOR is used, 30% to 60% or more of a reservoir's oil can be extracted, compared to 20% to 40% using only primary and secondary recovery.

The relationship between carbon capture and enhanced oil recovery is the most controversial aspect of the technology. Approximately 80 percent of CO2 captured annually is used for EOR, meaning that the captured carbon is injected into depleted oil reservoirs to extract additional oil, which is then burned and releases more CO2. The net climate benefit of this cycle is questionable.

Proponents argue that EOR with CO2 storage can be carbon-negative if the CO2 stored exceeds the emissions from the additional oil produced. This calculation depends on assumptions about how much CO2 remains underground, the carbon intensity of the produced oil, and whether the additional oil displaces other production or adds to total supply. Independent analyses have reached conflicting conclusions.

The fundamental tension is that the largest existing market for captured CO2 is the oil industry, which uses it to produce more oil. This creates a perverse incentive: the economic viability of carbon capture depends on continued oil production, while the climate goal of carbon capture is to reduce atmospheric CO2. Resolving this tension requires either decoupling carbon capture economics from EOR or accepting that EOR-based capture provides limited net benefit.

06What would make carbon capture viable

For carbon capture to play a meaningful role in climate mitigation, several conditions must be met simultaneously. First, the technology must scale from millions of tons per year to billions of tons, a factor of roughly 1,000. This requires massive infrastructure buildout, including capture facilities, pipeline networks, and storage sites, at a pace that has no historical precedent.

Second, costs must come down dramatically. Current capture costs make most applications economically unviable without subsidy. Learning curve effects, standardization of capture plant design, and economies of scale in manufacturing could reduce costs, but the degree and pace of reduction are uncertain. The history of energy technology cost reduction suggests that early projections are often optimistic.

Third, the carbon price or regulatory mandate must be high enough to incentivize deployment. Without a strong economic signal, companies have no reason to invest in capture technology beyond regulatory compliance or subsidy capture. A robust, stable, and sufficiently high carbon price across major emitting economies would create the market conditions needed for private investment in carbon capture at scale.

07The honest timeline for impact

Carbon capture at the scale needed to meaningfully affect global emissions is decades away, even under optimistic assumptions. The current global capture capacity is approximately 50 million tons of CO2 per year, a tiny fraction of the 40-plus billion tons emitted annually. Reaching even one billion tons of annual capture would require hundreds of large-scale facilities, each taking years to build and billions of dollars.

The most impactful role for carbon capture in the near term is in hard-to-abate sectors. Cement production, steel manufacturing, and certain chemical processes produce CO2 as an inherent part of their chemistry, not just from energy use. For these sectors, carbon capture may be the only viable decarbonization pathway in the medium term, making it a necessary technology even if its broader deployment is slow.

The honest assessment is that carbon capture is a complementary technology, not a primary climate solution. Emission reduction through clean energy, electrification, and efficiency remains the fastest and most cost-effective path to reducing atmospheric CO2. Carbon capture can help address the residual emissions that cannot be eliminated through other means, but relying on it as a substitute for emission reduction would be both economically and technologically misguided.