What is Carbon Capture and Storage?

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Carbon capture and storage (CCS) is hailed by many as a key weapon in the fight against climate change but it’s not a silver bullet.


  • CCS could reduce global CO2 emissions by 20% and reduce the cost of tackling climate change by 70%, according to the IEA.
  • The implementation of carbon pricing systems is helping boost the CCS industry, as increasingly higher carbon prices create revenue for CCS operations through the generation of carbon credits.
  • The green credentials of CCS are part of its appeal, but critics argue that the use of CCS in the fossil fuel industry is just kicking the can down the road, and creating the illusion that you can have net-zero fossil fuels.

Fossil fuels enabled a seemingly magical increase in global productivity, yet once the genie of carbon was out of the bottle, the question increasingly became how to put it back in (the ground). One sector seeking to sequester these emissions is the carbon capture and storage (CCS) industry, which redirects emissions from greenhouse gas (GHG) emitters and even the general atmosphere and returns them to their subterranean source.

Carbon capture and storage is still in its early stages, with 20 CSS projects operating globally in September 2020, and 30 new projects signed between 2016-2019.

Both industry and international organizations like the International Energy Agency (IEA) are looking into CCS, with the IEA stating that CSS could reduce global CO2 emissions by almost 20% and lower the cost of tackling climate change by 70%.

The UK’s National Grid has also stated that the country’s electricity system could turn carbon negative as early as 2033 if the UK uses CCS alongside its renewables push.

What is CCS good for?

CSS falls into two broad categories – point source capture and direct air capture. Point source technologies capture carbon at the source of emissions (think solvent filters on exhausts), while direct air technologies capture carbon from the general atmosphere.

The former is more established and has been used commercially for decades, albeit primarily to increase oil production. The latter is still in its infancy, with the first few commercial projects only coming online in the past couple of years. Operations that directly filter the atmosphere are also very energy intensive, since just 0.04% of the air by volume is CO2.

Captured carbon can be used to increase the yields of otherwise depleted oil wells, and in various industrial and commercial processes, such as making plastics, supplying greenhouses, and beverage carbonation. It is currently more difficult to run heavy industry on renewables, with large stationary emitters accounting for between 40-60% of global emissions.

Installing CCS systems at these locations is therefore a promising way to reduce and redirect emissions from heavy polluters. Cement, fertilizer, and steel factories are currently among the leading CSS users.

The Carbon XPrize (launched in 2015) offers $20 million to teams researching CCS technologies, with 10 prize teams (4 US, 3 Canada, 1 each for UK, India, China) working on a wide range of projects. “The diversity of technologies and products is really exciting,” notes Carbon XPrize Director of Energy, Marcius Extavour. “Teams are trying to make everything from carbon fibre to toothpaste to building blocks.”

More recently, Elon Musk announced a $100 million prize for CCS solutions through 2025. This surge in interest is partly due to greater demand for emissions-reduction technology and the fact that the price of carbon capture has decreased by 70% over the past decade, thanks to new innovations.

Carbon pricing aiding CCS expansion

Despite recent interest, CCS is not a new idea, as the first CSS facility was built in 1972 to enable enhanced oil recovery (EOR). In 2019, 31.5 million tonnes of CO2 were captured, with 3.7 million tonnes stored geologically. 81% of captured carbon is currently used in EOR operations.

One such EOR operation is Alberta’s Enhance Energy, which began operations in the fall of 2020. Enhance Energy buys CO2 from a refinery and fertilizer plant and stores the gas in mature oil wells.

The company currently produces around 200 barrels of oil a day, but expects to produce 4,000 – 5,000 barrels per day within five years. Currently, the operation is very much carbon negative given the small amount of oil extracted, with 4,000 tonnes of CO2 sequestered each day.

“Where carbon pricing is headed, we think there’s going to be a strong incentive to maximize the amount of CO2 we put in the ground” – Enhance Energy CEO, Kevin Jabusch

CSS operations can have a negative emissions profile if powered by zero or low-carbon energy, and if the captured CO2 is stored underground instead of repurposed. CO2 can be stored underground in a supercritical state in depleted oil and gas reservoirs, or as carbonates in limestone formations.

If CCS is widely implemented, there will be ample storage capacity. The Department of Energy estimates the United States’ potential sequestration capacity alone as equivalent to 600 years of total US fossil fuel use (at current consumption rates).

CCS can also be a way for companies to generate carbon credits. The Internal Revenue Service (IRS) announced the final regulations for the 45Q tax credit on January 6th, 2021, which provides companies capturing GHGs with up to $50 per tonne sequestered and not otherwise sold/used.

This credit is a significant development as it signals recognition of the emerging industry and acts as one way to put a price on carbon.

Factoring in the economic cost of carbon is vital to encouraging the market to act. “The best capture technology will reduce [sequestration] costs, but it will never be zero. Hence, even the best carbon capture technology will be useless if the world is not willing to put a price on carbon,” explains Berend Smit, professor of chemical and biomolecular engineering at Berkeley.

Canada’s carbon tax is increasing from C$40 in 2021 to C$170 by 2030, and if the tax is high enough then operations like Enhance may no longer need to produce oil to be profitable.

“Where carbon pricing is headed, we think there’s going to be a strong incentive to maximize the amount of CO2 we put in the ground,” explains Enhance Energy CEO, Kevin Jabusch.

CCS use in fossil fuel sector faces opposition

Alongside ensuring robust carbon pricing, there are concerns that CCS’s role in increasing fossil fuel extraction via EOR undermines its green credentials.

In February 2021, ExxonMobil announced a $3 billion investment in CSS technology through 2025: the company is also the first to capture more than 125 million tonnes of CO2, equivalent to taking 25 million cars off the road.

Moreover, some question whether CCS threatens to delay the adoption of renewables, and what the impact of higher energy demand from capture facilities will be. There is also disagreement regarding how various operations calculate their emissions balance.

“People have heard about carbon capture, they have this sort of warm and fuzzy idea that […] this can be something good to save us. And that’s because they have this impression that we can have carbon-neutral fossil fuels,” says June Sekera, a policy expert and visiting scholar at the New School in New York and senior research fellow at Boston University.

Petra Nova only installed CO2 scrubbers on 1 of 4 units at it’s coal power facility, and that scrubber used so much energy that a separate natural gas plant had to be built just to power it.

Questions about the viability (both economic and environmental) of CSS technology were on full display in early February 2021, as the only carbon capture coal plant in the United States closed after only four years in operation.

The closure of the Petra Nova facility in Texas, came after only a few years in operation, but that was still better than the Kemper Coal Project undertaken by Mississippi Power which never got off the ground.

The coal gasification project (which included CSS technology) should have cost $2.4 billion, but costs ballooned by over 200% to reach $7.5 billion.

A 2018 settlement saw Mississippi Power ratepayers only have to pay $1 billion in capital costs on the project, without which ratepayers would have seen double digit rate hikes to cover the company’s losses.

The arguments for clean coal aside, such investments face increasing pressure on multiple fronts, as demonstrated by Petra Nova’s plight. Firstly, Petra Nova only installed CO2 scrubbers on 1 of 4 units in the facility, and that scrubber used so much energy that a separate natural gas plant had to be built just to power it: emissions which Petra Nova excluded from its offset metrics.

The fact that the captured CO2 was used in EOR operations also undermined the project’s clean credentials, and the plant remained one of the deadliest in Texas based on its impact on asthma rates.

NRG Energy – Petra Nova’s owner – took the facility offline in response to the oil price crash due to the COVID-19 pandemic as the value of the oil from associated EOR operations had disappeared.

Ultimately, the plant was designed in 2014 when renewables were much more expensive; changing energy trends rapidly made the facility economically unviable. Speaking on this trend, Daniel Cohan, professor of environmental engineering at Rice University explains that “right now, the cheapest way to make electricity is solar and wind.

It no longer makes sense to keep an old coal plant around to capture its carbon when you could far more affordably replace it with cleaner sources.”

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Tomas van Stee

CEO & Founder

Tomas independently grew the company to its initial product market fit with $500k in revenue, and is now leading our rapidly growing team. He spends much of his time overseeing strategy and operations at EnPowered as we navigate many complex and heavily regulated markets. He graduated from the Richard Ivey School of Business at Western University with a Bachelor of Arts in Business Administration.