Governments and businesses are investing heavily in carbon capture and storage (CCS) to meet climate goals and decarbonize heavy industries. With nearly $80 billion in investment expected to flow into the sector in the coming years, carbon capture is becoming a central part of global climate strategies. Reports say global CCS capacity might grow four times by 2030. This shows big advances in technology, funding, and teamwork across countries.
Why Is CCS Gaining So Much Attention?
Carbon capture and storage is a process that captures carbon dioxide (CO₂) from industrial and energy-related sources before it reaches the atmosphere. It then stores the carbon underground in geological formations.
CCS works well in sectors like cement, steel, and fossil fuel plants. These areas are tough to decarbonize with just renewable energy.
- According to DNV’s 2025 Energy Transition Outlook: CCS to 2050 report, cumulative global investment in CCS could reach $80 billion over the next five years, or by 2030. This represents 270 million tons of carbon dioxide captured (MtCO2) each year.
A notable example is a $500 million agreement between Occidental Petroleum and the Abu Dhabi National Oil Company (ADNOC). They will build a big direct air capture (DAC) facility in Texas.
The deal shows the growing global interest in CCS. It’s not just about cutting emissions; it’s also about creating carbon removal solutions that support other climate efforts.
Experts agree that CCS isn’t a complete solution. However, it plays a key role by tackling emissions that other technologies can’t remove. It is also one of the few methods available today for carbon dioxide removal, a crucial component for meeting long-term climate targets.
How Fast Is CCS Capacity Growing?
The global CCS capacity is expected to grow fourfold by 2030, according to the DNV report. From around 50 million tonnes of CO₂ captured annually today, capacity could rise to more than 550 million tonnes per year by the end of the decade. This would represent around 6% of today’s energy-related global emissions.
This growth requires major investment in infrastructure, including new carbon pipelines, storage hubs, and large-scale capture facilities. North America and Europe are expected to lead the expansion. They could make up more than 80% of the expected CCS capacity by 2030. This is due to helpful climate policies, funding incentives, and established infrastructure.
In the U.S., the Inflation Reduction Act drives CCS growth. It offers tax credits up to $85 for each metric ton of CO₂ captured and stored permanently. Similarly, the European Union supports CCS through its Innovation Fund, with countries like Norway and the Netherlands building cross-border carbon storage networks in the North Sea.
Emerging markets are also entering the CCS space. In Asia, Japan and South Korea have begun planning domestic CCS facilities and exploring regional carbon storage partnerships.
Smart Tech, Lower Costs: CCS Innovation Takes Off
Technology is central to making CCS more effective and affordable. Current advancements include improved solvents for carbon capture, modular DAC units, and more efficient CO₂ transport and storage systems. These innovations help lower energy use and cut costs.
A 2023 report from the Energy Futures Initiative (EFI) says CCS costs might drop by 40% by 2050. This could happen because of better technology and larger production. New digital tools, like AI monitoring systems, are being tested. They track carbon storage performance in real time and help ensure long-term safety.
Data centers in the U.S. are beginning to integrate CCS into their sustainability efforts. For example, Microsoft is partnering with firms like Heirloom and CarbonCapture to buy permanent carbon removal credits backed by CCS. These partnerships show how CCS is moving beyond industrial use and into corporate sustainability strategies.
Hybrid projects, combining renewable energy with CCS, are also on the rise. These include bioenergy with carbon capture and storage (BECCS), where biomass is used for power generation and the CO₂ is captured. This type of system can result in net-negative emissions—removing more carbon from the atmosphere than it emits.
How Do Policy and Carbon Markets Influence CCS Growth?
Strong policy support is driving CCS development. In the U.S., the Section 45Q tax credit offers financial incentives for both point-source carbon capture and DAC projects. The Department of Energy also provides funding for demonstration and early-stage CCS projects.
Globally, carbon markets are beginning to recognize the role of CCS. The voluntary carbon market (VCM) and compliance markets in California and the EU Emissions Trading System are considering or already using CCS-based credits.
In 2024, the global carbon market was valued at around $1.4 billion according to MSCI, with voluntary carbon credit transaction volumes declining but demand remaining steady. Projections suggest it could grow significantly, reaching between $7 billion and $35 billion by 2030.
Longer-term forecasts estimate the market could expand to as much as $250 billion by 2050. This is driven by increasing corporate climate commitments and demand for high-quality carbon removal credits.
High-quality carbon credits from CCS projects could play a major role in this growth. Projects that use strict measurement, reporting, and verification (MRV) protocols can attract higher prices. This applies in both voluntary and regulatory markets.
Wood Mackenzie estimates the U.S. CCUS (carbon capture, utilization, and storage) sector could offer a $196 billion investment opportunity over the next 10 years. This is especially true for the oil, gas, chemical, and power industries.
Meanwhile, countries like Canada, Australia, and the UK are developing shared CCS “hub” models—regional centers that link multiple emission sources to centralized storage facilities. These hubs lower costs and speed up development by pooling resources and infrastructure.
A Critical Piece of the Climate Puzzle
By 2030, global CCS projects could capture between 430 and 550 million tonnes of CO₂ each year. This is a big step forward, but it’s not enough. Experts say we need 1.3 billion tonnes per year by mid-century to meet the Paris Agreement goals.
Still, CCS plays a unique and necessary role in cutting emissions where alternatives are limited. The technology’s capture capacity will grow to 1,300 MtCO2/yr. It also supports the production of low-carbon hydrogen, decarbonized fuels, and sustainable building materials.
However, some environmental groups caution that CCS must be applied carefully. Using captured carbon for enhanced oil recovery (EOR) can hurt climate efforts. This happens if it isn’t combined with limits on fossil fuel use.
Clear governance, independent checks, and science-based standards are key to making sure CCS projects truly help climate goals. While it is not a silver bullet, CCS can buy time and cut emissions in sectors that are difficult to decarbonize with renewables alone.
As global capacity grows and costs drop, CCS will likely be key to climate strategies. This includes energy efficiency, clean fuels, and electrification. Continued collaboration among stakeholders, significant investment, and communities’ support will be key to making carbon capture and storage both scalable and sustainable.
The post Global Investment in CCS Surges Toward $80 Billion as Climate Goals Drive Demand appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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