Carbon Capture and Storage
Author: Michael Redmond Edited by: Nora Lewis and Txai Sibley
Suggested Citation:
Redmond, M., Lewis, N., Sibley, T. (2026). Carbon capture and storage. Technology Assessment Project Case Study Library, University of Michigan. https://stpp.fordschool.umich.edu/tap-case-study-library/carbon-capture-and-storage
Carbon Capture and Storage
Key Takeaways
- CCS has been backed by large corporations and subsidized by the government but has shown little broad adoption, exemplifying potential issues with subsidized, corporate energy technologies. Moreover, to increase the profitability of the technology, CCS has been marketed for use in carbon-intensive industries, contrary to its purportedly "green" purpose.
- CCS has been seen as a form of "greenwashing," creating the appearance of low or zero carbon products while actually bolstering the coal industry.
- CCS is a way of maintaining present market and infrastructural forces instead of renegotiating broader, more sustainable energy relationships.
Background: Clean Coal, Net-Zero Oil, and Some Serious Déjà Vu
There are two general methodologies used to "capture" carbon dioxide: direct air capture (DAC), where CO2 is extracted from ambient air, and point-source capture, which collects and filters out CO2 before it leaves an emissions source and enters the atmosphere. Both CCS methods require transportation (generally pipelines) to storage sites, which are generally in underground geologic formations.
Point-Source Capture
Point-source CCS systems are generally designed to be fitted onto large industrial facilities like power plants or cement kilns, and are capable of scrubbing between 50 and 90 percent of smokestack carbon emissions. Because the CO2 concentration in flue gas is so much higher than ambient air, point-source capture tends to be much less energy intensive (and therefore cheaper) per ton of carbon dioxide removed. However, retrofitting existing coal-fired power plants with carbon-capture systems can reduce their total power output by anywhere from 20 to 40 percent, meaning that significantly more coal would need to be mined, processed, and transported in order to keep plants operating at their current output.
This "energy penalty," as well as the high up-front costs (systems can cost half a billion dollars or more), have led to relatively slow adoption. Currently only one power plant in the world uses large-scale carbon capture: the Boundary Dam coal plant in Canada, just over the North Dakota border. Another is under construction in China and is on track to be operational in 2025.
Although numerous projects have been proposed over the last decade or so, the United States' only ever large-scale point-source CCS system was the Petra Nova project, where CO2 was captured from a coal plant outside Houston and pumped into a nearby oil field to be used in enhanced oil recovery. The project was funded in part by a $200 million DOE grant and shut down in 2020 after the oil field was abandoned due to falling oil prices during the COVID-19 pandemic. Petra Nova fell far short of its emissions reduction targets, capturing only 3.8 of the promised 4.6 million short tons of CO2 before it came offline.
Despite a legacy of financial difficulties and falling short on promises, the Biden Administration bet big on point-source capture. In May of 2023, the EPA announced new emissions restrictions that would essentially force all coal plants in the U.S. to either adopt carbon capture or shut down in the next 15 years. The administration provided a carrot alongside the stick: the IRA provides billions in subsidies for point-source CCS projects, mainly through expansion of the 45Q tax credit, which now provides $60 to $80 per metric ton of CO2 captured (depending on how it is used). On top of that, the Bipartisan Infrastructure Act dedicated an additional $7 billion in direct grants and loan guarantees for point-source CCS projects and infrastructure. The fossil fuel industry lobbied heavily for these subsidies during the writing of both bills, and Sen. Joe Manchin III (D-WV), a longtime advocate of the fossil industry and author of the IRA, has been a strong supporter of CCS technology.
These financial incentives have helped launch a number of new companies, as well as reviving some old ones. The new subsidies, along with increased global oil prices, have led the company that owns Petra Nova to restart the project. As for new companies, Net Power LLC is using some familiar rhetoric, marketing itself as the "McDonalds of power generation" with a design for a natural-gas fired power plant that comes equipped with a built-in CCS system. The plants have a "modular, standardized design" that the company says will allow costs to drop as manufacturing scales. Net Power's CEO Danny Rice said their approach is something "we haven't seen in the power industry today," and plans to begin operations in 2026 with a flagship plant that will generate "near emissions-free power" to fuel Occidental Petroleum's mining operations in the Permian Basin.
Direct Air Capture
The other primary form of CCS technology is direct air capture (DAC), where carbon dioxide is removed directly from the ambient air. Like advanced reactors, DAC is envisioned as a more distributed technology, with a wide range of schemes and designs that emphasize different desirable qualities (speed, energy efficiency, water use, etc.). Proponents see a future where a dispersed network of DAC devices operate across the world to reduce atmospheric CO2 to manageable levels; the term "artificial trees" has been coined by multiple popular media outlets including the BBC and Scientific American.
Similar to the point-source capture industry, which got much of its seed funding through the 2009 recovery act, the DAC industry was jump-started by a series of government-subsidized demonstration projects that more than a decade later have either failed or fallen short of their climate mitigation promises. As Washington Post journalist Evan Halper explains: during the Obama era, the Department of Energy spent $1.1 billion to help launch 11 demonstration projects, only two of which are operational today. An Institute for Energy Economics and Financial Analysis study of 13 of the world's biggest projects found that 10 of them are either underperforming by large margins or have shut down.
Proponents argue that these shortcomings are necessary for innovation, and that similar high-profile failures occurred during the development of nearly every other renewable technology and climate solution.
Despite these early struggles, a few for-profit DAC companies have managed to persist. And like their point-source cousins, many bear uncomfortably close ties to the oil industry. Climate Engineering, one of the leading DAC companies, was founded by Bill Gates in 2009 alongside Canadian oil-sands magnate Murray Edwards. Another leading company, Global Thermostat, was founded as a public-private partnership by leading academic researchers at a number of top universities, and is currently partnered primarily with Exxon and Coca-Cola. Much of Global Thermostat's operations are based in Huntsville, Alabama, and the company is touted by Democrats as fighting climate change and by Republicans as "spurring innovation."
Storage and Transport
Storing captured carbon on geologic timescales presents its own set of issues, including challenges with verification as well as siting potentially hazardous infrastructure. Captured carbon is generally stored underground in porous geologic formations, often former oil and natural gas fields (due to good data, proximity to carbon-intensive industries, and proven sequestration ability). But these same sites often contain dozens, if not hundreds, of abandoned wells, which can allow CO2 to leak out if they are not properly monitored or maintained. Verifying that CO2 is actually stored on geologic timescales (a crucial condition for CCS to count as a viable climate solution) is expensive, and oil companies continue to lobby heavily against policies that would require verification and monitoring of storage sites.
Carbon dioxide must also be transported from the site where it is captured to permanent storage locations, requiring the siting of potentially hazardous infrastructure like pipelines. The CO2 carried in these pipelines is pressurized to levels much higher than natural gas, which elevates the likelihood and potential damage of an explosion or leak. A ruptured line can generate a large explosion, and the resulting release of gas can suffocate humans and animals as well as preventing nearby vehicles from starting an engine to escape. These accidents have been observed multiple times, including in Satartia, Mississippi, where a ruptured pipeline poisoned an entire town and led to nearly 50 hospitalizations.
Cost and Utilization
As of today, the primary barrier to wide-scale deployment of CCS technologies is cost. It currently costs anywhere from $120 to $600 to capture, transport, and store a single ton of CO2 using DAC, although these prices are expected to drop as the technology develops and becomes widely deployed. The operational prices are significantly lower for point-source capture (between $40 and $60 per ton CO2), but initial capital costs can be in the hundreds of millions. This means that even in places with high carbon prices or sizable tax credits, CCS is not always economically viable. Some EU member states have adopted carbon pricing, but these generally do not reach above $100 per ton. The expanded 45Q tax credit provides up to $180 per ton, which comes close to the operating costs of the most efficient projects and might barely meet costs for some of the more ambitious proposals.
This cost gap has led industry leaders, academics, and governments to try to find economically productive ways to utilize captured carbon and thereby underwrite some of the costs. In a twist of fate that is equally ironic and depressing, the main market for captured carbon is in a process called enhanced oil recovery (EOR), where the CO2 is heated and pressurized into a supercritical fluid and injected underground in order to increase oil production. Anywhere from 70 to 95 percent of captured carbon globally is used for EOR, which helps to explain why most CCS projects are joint ventures with the fossil fuel industry.
Fossil fuel companies see carbon capture as the key to their future and have lobbied heavily to make it the only publicly funded climate solution. Supercritical CO2 is a key input for EOR operations, and expanding access could dramatically expand EOR projects into the future. It follows, then, why oil companies would lobby so heavily for CCS: it provides them with a key industrial component free of charge (thanks to public subsidies), and allows them to continue and expand their operations while simultaneously painting themselves as part of the climate solution.
This marriage between CCS and oil companies has sparked a heated debate about the future of the technology. On one hand, carbon capture has the potential to significantly decrease (even eliminate) the carbon intensity of the natural gas and oil economy, an economy that many argue will be critical for global energy supplies for years, if not decades, to come. On the other hand, anything that leads to increased fossil fuel extraction is unlikely to be the most effective climate mitigation strategy, and many activists, scholars, and policymakers take moral issue with allowing the same companies that profited from and prolonged the climate crisis to profit from the solution.
These overarching narratives are very similar to those for advanced reactors. ARs have been described as a solution for energy-intensive and thus hard-to-decarbonize industries: climate-smart half-measures for things society seems unwilling to give up. Opponents argue that half-measures are exactly what we do not need, and that a large-scale commitment to nuclear technology is incompatible with the larger goals of sustainable energy systems and a green transition.
Analogs: Power, Profit, and Shell's Plan to Save the World
Greenwashing
CCS allows polluting industries to greenwash their products by equating "eco-friendly" with low-carbon, while simultaneously polluting the environment in other ways. In Louisiana, multiple new petro-chemical plants that include CCS systems have been proposed, with the products coming from those facilities being labeled as "green" or "clean." Some of these are in the state's notorious "cancer alley," where poor, mostly Black residents already face severely elevated health risks. Similarly, some environmental groups have criticized the Biden administration's rules requiring coal plants to adopt CCS, saying that the pollution impacts are not limited to CO2 and that by incentivizing a technology that allows continued operation and expansion of the coal power sector (as opposed to simply shutting it down), the administration is going against its stated environmental justice goals.
The nuclear industry has a long history of attempting to merge the terms "clean" and "carbon-free," and as climate change and the need for new carbon-free sources of power continue to take on global urgency, it will become increasingly easy to equate the two. If ARs simply play into energy addition dynamics rather than replacing dirtier forms of energy, it will become increasingly difficult for consumers and regulators to discern how energy-intensive products are impacting the environment.
Storage and Transport: Public Risks and Political Infrastructure
Like the storage aspect of CCS, widespread deployment of ARs would lead to the public assuming the risk and cost of storing hazardous waste. The Gorgon project in Australia, where Chevron is building the world's largest CCS facility in tandem with a natural gas field, provides a good example. Chevron lobbied hard to include a provision that limits their liability for any hazard or release of CO2 starting 15 years after the project's completion, despite claims from environmental groups that the abandoned wells on the site could lead to CO2 releases decades later and that leaks could pose an environmental threat to a protected island above the repository. Chevron may very well receive a financial and PR boon, while the public and planet assume large climate, economic, and environmental risks.
Under current governance structures, the largest subsidies the nuclear industry receives are in the form of limited accident liability and public disposal of wastes. Like in the case of CCS, companies seeking to develop large AR projects will likely fight to limit their liability for waste disposal (and its associated risks), claiming that doing so is the only financially feasible way to provide clean energy. A distributed network of reactors, much like DAC, would also require increasingly scaled waste transportation infrastructure. Like storage, this comes with its own risks, and the politics of place will become increasingly important. Overall, by mitigating risks associated with climate and increasing those associated with these technologies, this dynamic further acts to shift environmental and health burdens in ways not explicitly accounted for in dominant narratives or current governance structures.
Relevance to Advanced Nuclear Energy
Carbon capture and storage (CCS) is a strong analogical case study for advanced nuclear reactor (AR) technology because it serves as both a Type 1 (function) and Type 2 (implication) analog. In terms of function, both technologies are designed to expand access to clean energy and mitigate climate change without upending established systems of power and profit. As for implications, both technologies act to shift environmental health burdens, facilitate greenwashing, and further reliance on extractive and polluting industries. AR and CCS technologies share similar funding mechanisms (reliance on public subsidies and assumption of risk) and developmental pathways (venture capital and tech investment), but differ in their level of deployment and role in geopolitics.
Fundamentally, advanced reactors and CCS systems are designed to mitigate climate change while maintaining current systems of power and profit. In their capacity to either replace or slash emissions from coal plants, both technologies allow electrical grids to maintain their current structure, just without the carbon emissions. An immense amount of research in the energy justice field has shown how current grids work to further inequality in a variety of ways (cost burdens, reliability issues, grid limits, etc.), and simply eliminating carbon emissions does nothing to address these issues. In fact, the high costs of these technologies might force utilities to increase rates, furthering these cost burdens.
This carbon-free, business-as-usual dynamic is responsible for the huge support for CCS technologies seen from powerful vested interests like the petro-chemical industry, multinational corporations, and large hedge funds. Advanced reactors have not yet cemented themselves as a viable climate solution.
Key References
Gardner, T. (2023, August 2). Restart delayed at Texas coal unit linked to Petra Nova CCS project. Reuters.
Radtke, P. (2023, August 13). Carbon-capture gold rush an 'insult' to locals in emissions-hit Louisiana. The Guardian.
References
AL News. (2019, April 22). The Huntsville company working to solve climate change.
Anchondo, C. (2023). Texas company set to build first big CCS gas power plant. Politico.
Biello, D. (2023). 400 PPM: Can Artificial Trees Help Pull CO2 from the Air? Scientific American.
Butterworth, P. (2023, March 20). Carbon capture economics: Why $200 /tCO2 is the crucial figure. CRU Group.
EarthJustice. (2023, September 19). Carbon capture: The fossil fuel industry's false climate solution.
Gardner, T. (2023, August 2). Restart delayed at Texas coal unit linked to Petra Nova CCS project. Reuters.
Grover, H. (2021). Old oil fields may be ideal for carbon sequestration. New Mexico Political Report.
Halper, E. (2022, October 14). How a pricey taxpayer gamble on carbon capture helps Big Oil. Washington Post.
Hunt, K. (2022, August 22). The Inflation Reduction Act creates a whole new market for carbon capture. Clean Air Task Force.
Hydrocarbons and Geothermal Energy Office. (n.d.). Solicitations and business opportunities. Department of Energy.
International Energy Agency. (2022). Direct air capture: A key technology for net zero. IEA.
Kemp, J. (2013). World's largest carbon capture begins even as Abbott tax repeal looms.
Marshall, B. D., Anchondo, C. (2023, May 10). The complete guide to CCS and the EPA power plant rule. E&E News by POLITICO.
McGlade, C. (2019). Can CO2-EOR really provide carbon-negative oil? IEA.
Moreno-Munoz, A. (2021). Inequality built into the grid. Nature Energy, 6(9).
National Energy Technology Laboratory. (n.d.). Commercial carbon dioxide uses: Carbon dioxide enhanced oil recovery. NETL.
Novel carbon capture and utilisation technologies (No. 4). (2018). SAPEA.
PNNL. (2021). Cheaper Carbon Capture Is on the Way. SciTechDaily.
Radtke, P. (2023, August 13). Carbon-capture gold rush an 'insult' to locals in emissions-hit Louisiana. The Guardian.
Roberts, D. (2019, October 2). Could squeezing more oil out of the ground help fight climate change? Vox.
Simon, J. (2023, May 21). The U.S. is expanding CO2 pipelines. One poisoned town wants you to know its story. NPR.
The Breakthrough Institute. (n.d.). Advancing nuclear energy.
Tollefson, J. (2018). Sucking carbon dioxide from air is cheaper than scientists thought. Nature, 558(7709).
U.S. Senate Committee on Energy and Natural Resources. (2022, September 23). Manchin Applauds $7 Billion Department of Energy Carbon Capture, Transport and Storage Infrastructure Investment.
Vaughan, A. (2022, September 1). Most major carbon capture and storage projects haven't met targets. NewScientist.
Vidal, J. (2018, February 4). How Bill Gates aims to clean up the planet. The Observer.
Vinca, A., Emmerling, J., & Tavoni, M. (2018). Bearing the cost of stored carbon leakage. Frontiers in Energy Research, 6.
Weisbrod, K. (2021, August 17). Fossil Fuel Companies Are Quietly Scoring Big Money for Their Preferred Climate Solution: Carbon Capture and Storage. Inside Climate News.
World Nuclear Association. (n.d.). "Clean Coal" Technologies, Carbon Capture & Sequestration.
Photo: Red Trail Energy ethanol CO2 capture plant, Richardton, ND by Acroterion / CC BY-SA 4.0
