Industry says carbon capture still an expensive last resort to cut emissions

Capturing carbon dioxide (CO2) to use or store remains one of the costliest ways to cut emissions. That means the technique – known as CCUS – has yet to scale up, still relies on taxpayer support and should only be pursued after other green solutions, key industry players told a recent conference in London.

Companies and governments that depend heavily on fossil fuel revenues have long promoted CCUS technology as a way to carry on producing and consuming fossil fuels while keeping emissions down.

But over 50 years since the first project began operating, CCUS is still barely used. According to the Global CCS Institute, just 50 facilities were running around the world in 2024, with the capacity to capture about a thousandth of global emissions.

Most of those capture CO2 from gas facilities and pump it underground to squeeze more oil from reservoirs, a process called enhanced oil recovery (EOR).

At this month’s Carbon Capture Global Summit 2025 – organised by Leader Associates – business representatives admitted that the technology has failed to expand on a commercial scale despite strong government support. CCUS momentum has even “plateaued a wee bit” in 2025, said Mhairidh Evans, head of CCUS research at consultancy Wood Mackenzie.

Subsidies still needed

Julia Dubinina, a former Shell manager now developing oil and gas firm Harbour Energy’s carbon storage business, was asked if CCUS is entering its “deployment phase”. She replied that it is “too early to talk about scale”, adding “we need to be careful of not trying to fly before we can walk”. “There is still quite a lot of work to be done,” she added.

She remains cautious partly because “public funding is an absolute must for every project, and scaling is kind of limited when you need public funding for every single project,” she explained.

The industry depends on subsidies because capturing and transporting CO2 is among the most expensive climate solutions. In 2021, Intergovernmental Panel on Climate Change scientists reported that while solar and wind investments usually save money, CCUS costs $50-200 per tonne of CO2 captured.

In a keynote speech at the conference, Katharina Beumelberg, sustainability chief at Heidelberg Materials – which produces cement, aggregates, concrete and asphalt – acknowledged the sector’s reliance on taxpayer support.

Praising the Norwegian government’s funding for one of the company’s CCUS projects, she said: “We need these funding processes to be able to do this pioneering work because, otherwise, from the private sector it would be unrealistic to get there”. She added: “Whatever we do in the end needs to make money.”

Beumelberg called for more taxpayer support for CCUS. Noting that three-fifths of Heidelberg’s products are used in government-funded projects, she said governments should create a market for carbon-free products, “recognising that a carbon-free product in the end does need to come with different pricing because it is carbon-free”.

Because of its high cost, most experts say CCUS should be reserved for sectors that are hard to clean up in other ways like steel, chemicals and particularly cement.

Expensive last resort

Cement-making produces 8% of global emissions, more than any country apart from the US and China, as fossil fuels are burned to heat limestone and the chemical process itself releases CO2.

But Rozemarijn Wesby, vice-president of CCUS at the world’s biggest cement company Holcim, told the conference that even in cement, the high cost of CCUS means it is only the “last piece of the puzzle”.

That’s because Holcim’s decarbonisation goal is more important than its CCUS goal, she said – and CCUS is one of the more expensive ways to cut emissions. For that reason, Holcim is first ensuring that its power is “green”, fuels are “sustainable and renewable” and emissions avoided “wherever possible”.

Evans of Wood Mackenzie echoed this, saying governments and companies should prioritise energy efficiency, then “electrifying everything that we possibly can with renewables, then fuel switching [and] substituting” before “at the last, directly abating or removing carbon dioxide”.

Wesby stressed that using CCUS only as a last step limits costs and prevents oversized “downstream” infrastructure. The CCUS infrastructure discussed at the conference included pipelines and trains to move CO2, terminals to store, compress and load it onto ships, and underground storage sites.

A Nature study published this month, however, found that the world’s CO2 storage potential is far more constrained than previously thought. Lead author Matthew Gidden of the University of Maryland argued in a post on CarbonBrief that governments should prioritise who gets access to storage space.

Carbon capture for gas plants?

Electricity is one of the easiest sectors to decarbonise because renewable power is often cheaper than fossil fuels. As of 2024, only five fossil-fuel power plants had CCUS, all of which used the CO2 for EOR. Only one, Huaneng Yangpu in China, is a gas power station and that is just a demonstration project.

Nonetheless, the UK government financially supports a CCUS project at a gas plant in England’s Northeast and is considering support for another in Wales run by power firm Uniper. Mike Lockett, Uniper’s UK head, said that Germany’s new centre right-led government had also “opened the door for gas-fired CCS”.

Supporters say such plants produce flexible and dispatchable power, unlike solar and wind. Critics argue batteries, demand management, nuclear and cross-border interconnections can provide sufficient backup.

Greg Jackson, the chief executive of Octopus, a UK-based clean energy, electric vehicle services and heat pump company, said recently that – while it’s useful for cement – subsidising CCUS for energy is misguided.

Jackson, who is also an official adviser to the UK government, told the Financial Times Weekend Festival that the technology has “been a gift to the oil and gas industry to carry on what they’re doing and carry on the fiction that somehow enormous amounts of public money should enable them to keep doing it”.

“It’s a boondoggle for oil and gas – and we would be better off in the UK just burning unabated gas, because the cheaper we make electricity, the cheaper our heat pumps and electric cars are going to be and they are the key to emissions reductions,” he said.

Risk of pipeline leaks

Building out CCUS on a large scale will involve vast CO2 pipeline networks. These come with risks: In 2020, a landslide caused a carbon pipeline to leak in the US state of Mississippi, hospitalising at least 45 people. High concentrations of CO2 can cause headaches, drowsiness, elevated heartbeat and blood pressure, and even death.

Climate Home News asked Niko Bosnjak, policy and communications lead at carbon pipeline operator Open Grid Europe (OGE), which is converting German gas pipelines to carry CO2, if similar leaks could happen in Europe.

He said he had heard about the Mississippi incident, although he didn’t “know exactly what happened”. OGE, he added, is working on a security framework and “looking at the thickness of the pipeline in a way that is supposed to provide more security”.

Despite such concerns, CCUS has continued to receive strong political backing. US President Donald Trump, for example, cut subsidies for other green technologies but expanded support for CCUS, while India is preparing CCUS subsidies.

“The need for CCS is broadly recognised at the political level,” said Shell’s CCS general manager Kelly Ripley. Oil and gas giant Shell is launching CCUS projects – especially in North America and northwest Europe – she added, and is “doing a lot of learning from this political and regulatory perspective and also hoping to bring other countries on the same journey with us”.

The post Industry says carbon capture still an expensive last resort to cut emissions appeared first on Climate Home News.