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.
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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.
Industry says carbon capture still an expensive last resort to cut emissions
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As oil prices spike due to the Iran war, a new diplomatic process launched in Colombia will support a group of 57 countries – among them large fossil-fuel producers – interested in designing national roadmaps and a new financial architecture to wean their economies off coal, oil and gas, as well as building a trade system that favours clean energy.
The first global conference on transitioning away from fossil fuels wrapped up on Wednesday in the coal-port city of Santa Marta after several days of discussions bringing together ministers, academics, Indigenous and Afro-descendant peoples, green groups, trade unions and business representatives.
It offered a space for governments frustrated by last year’s failed attempt at COP30 to develop a global roadmap away from fossil fuels to make progress on how to reduce their reliance on hydrocarbons in a fair and carefully planned way, in line with a commitment made at COP28 in Dubai. Large fossil fuel-producing countries have since blocked concrete advances at the UN talks on putting that into practice.
The Santa Marta outcomes will feed into a voluntary roadmap being crafted by COP30 hosts Brazil based on inputs from countries and civil society.
Santa Marta: Ministers grapple with practicalities of fossil fuel phase-out
At Wednesday’s closing plenary, Colombian environment minister Irene Vélez Torres announced that a second conference will be held early next year in the Pacific island nation of Tuvalu, co-chaired by Ireland, marking the start of a new policy-making process to run alongside the slower-paced climate COPs.
“For the first time, it demonstrates that it is possible to make a different type of environmental democracy,” Vélez Torres said, adding that improvements can be made to the methodology.
Colombia and the Netherlands, which jointly hosted the Santa Marta conference, said three workstreams had been set up to identify concrete ways to reduce fossil fuel dependence and strengthen co-operation between countries.
These workstreams are focused on designing national and regional roadmaps away from fossil fuels including coordinating support for implementation; reforming economic and financial architecture by reducing fossil fuel subsidies, unlocking investment and managing debt constraints; and connecting fossil fuel-producing and consuming nations to reshape the international trade system towards decarbonisation and green commerce.
A summary report of the conference said governments would receive policy support from a new panel of top scientists specialised in the energy transition, which will help countries develop roadmaps and align them with their national climate action plans (NDCs).
During two days of ministerial meetings, France was the first country to announce its own roadmap, which includes targets to end the consumption of coal by 2030, oil by 2045 and fossil gas by 2050 for energy purposes.
Dutch climate minister Stientje van Veldhoven said that, while “nobody is gonna force” governments to implement the anticipated roadmaps, “these countries came together because they want to transition to a different economy”, adding that the conference provides “safe space for dialogue”.
“The fact that we don’t have negotiations here gave us such different dynamics, so the psychology of the Santa Marta conference is something that we will definitely make sure to carry forward,” she told the plenary. Later she said at a press conference that the key was not to negotiate but to “collaborate”.
Call for a fossil fuel treaty
Countries gave mostly positive reactions to the conference proceedings and said the general mood had been uplifting. One government delegate from the Dominican Republic even had to fight back tears in the plenary as she thanked the hosts for inspiring the group of assembled countries.
While supportive of the Santa Marta discussions, oil-rich Nigeria advocated strongly for a “managed, just, orderly and equitable” transition away from fossil fuels, warning against any “sudden closures”. This stance was reflected in the summary report which notes that fossil fuels should “decline in a managed, fair, and politically viable way”.
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Ghana, another fossil fuel-producing country, said oil and gas remain deeply tied to government revenues which fund public services. Nonetheless, the West African country urged others to join an initiative to negotiate a global “Fossil Fuel Treaty”, which a group of 18 nations called on the conference to endorse. The effort was not included in the Santa Marta workstreams.
Felix Wertli, Switzerland’s ambassador for the environment, said countries had found potential areas for collaboration around improving electricity grids, energy storage and green investments ahead of this year’s COP31 UN climate summit in Türkiye. “We are confident that this COP could support such a call,” he added.
“Groundbreaking” talks
Delegates said Santa Marta had offered a “more relaxed” and inclusive process than UN negotiations. Government officials met face-to-face in hours-long conversations and interacted with representatives of different social sectors, including Indigenous peoples, cities and academics in closed-door breakout sessions.
Panama’s climate envoy, Juan Carlos Monterrey, told Climate Home News that, while he had been sceptical of the process at first, it allowed for discussions to “flow” in a way that COPs do not. “That is groundbreaking – it is a massive change in how we deal with environmental diplomacy,” he said.
EU climate chief Wopke Hoekstra told journalists that the fact that the conference had happened at all just a few months after a tense COP30 was an achievement in itself. UK climate envoy Rachel Kyte also noted that the Santa Marta dialogue “is a proof of point that we can talk maturely about a really difficult issue”.
Comment: Santa Marta marks a new chapter in climate diplomacy
Observers also largely praised the conference. Catherine Abreu, director of the International Climate Politics Hub, called it a “productive space” for discussing the “stickiest issues” in the energy transition. WWF’s Manuel Pulgar Vidal, also a former COP president for Peru, said Santa Marta made “hope swell into momentum”, adding that its urgency must be sustained beyond this one summit.
Patricia Suárez, from the Organization of Indigenous Peoples of the Colombian Amazon (OPIAC), said Indigenous peoples were optimistic that the conference had placed “the urgency of moving away from fossil fuels on the table”. But more concrete measures must follow, she noted, including declaring key rainforest ecosystems as “fossil fuel exclusion zones”.
One area the conference was criticised for overlooking was the health harms caused by fossil fuels through air pollution, extreme heat and other impacts. Jeni Miller, executive director of the Global Climate and Health Alliance, which unites 250 health organisations, said leaders in Santa Marta “did not address the importance of protecting people’s health”, which should be put at the centre of the conversation.
Influencing UN negotiations
Most government officials at the conference recognised the need to grow the “coalition of the willing” cemented in Santa Marta into a larger network that can influence other spaces such as UN climate negotiations – and its organisers reiterated that the door is open for others countries to join.
Dutch minister van Veldhoven told the final plenary that while “we are here with an immense group in Santa Marta, it is still too small” to fully disentangle the world from fossil fuels. Colombia and the Netherlands did not invite some powerful fossil fuel-producing countries like Russia and the US to the gathering because of their “openly extractivist” views, and major players in the clean energy sector like China were also left off the list.
Comment: Six nations at Santa Marta could shape fossil fuel futures
Tuvalu’s climate minister, Maina Vakafua Talia, told Climate Home News that big actors like China should be at the table, saying the criteria for invitations could change for the second fossil fuel phase-out conference his country will organise in April 2027.
“If we are missing out the main players in the discussion, then we are moving in a loop,” he said. “We need to find somehow how we can engage with [them] because there is no point in talking to ourselves.”
Claudio Angelo, head of international politics at Brazilian NGO Observatório do Clima, said countries could decide to keep the ball rolling within the UN climate negotiations by presenting formal agenda items on roadmaps away from fossil fuels at the annual Bonn talks in June which set the scene for COPs.
Tina Stege, climate envoy from the Marshall Islands, argued “there is a strong recognition that what we’re doing here can complement the COP process and needs to inform that process” – a view backed by other Pacific islands.
The post Santa Marta summit kick-starts work on key steps for fossil fuel transition appeared first on Climate Home News.
Santa Marta summit kick-starts work on key steps for fossil fuel transition
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