Carbon Capture and Storage 101
An overview of CCS technology, including how it works, where it is currently used in the United States, barriers to more widespread use, and policies that may affect its development and deployment.
Carbon capture and sequestration/storage (CCS) is the process of capturing carbon dioxide (CO₂) formed during power generation and industrial processes and storing it so that it is not emitted into the atmosphere. CCS technologies have significant potential to reduce CO₂ emissions in energy systems. Facilities with CCS can capture almost all of the CO₂ they produce (some currently capture 90 or even 100 percent). This explainer provides an overview of CCS technology, including how it works, where it is currently used in the United States, barriers to more widespread use, and policies that may affect its development and deployment. It also includes a list of additional resources for further reading.
Carbon Capture and Utilization
In some cases, captured CO₂ can be used to produce manufactured goods and in industrial and other processes, rather than being stored underground. Such utilization leads to the acronym CCUS (carbon capture, utilization, and storage). Different CO₂ uses lead to different levels of emissions reductions, depending on the specific use, and what fuels or other materials, if any, the CO2 is displacing. The ultimate effects on climate change depend on whether these uses lead to permanent sequestration of the CO2, although some uses, such as in soda carbonation, release their CO2 immediately upon opening and thus are not acceptable utilization options. One of the primary uses of CO₂ is for enhanced oil recovery (EOR), a method of oil extraction that uses CO₂ and water to drive oil up the well, improving oil recovery and sequestering the CO₂ underground. Selling CO₂ for EOR and other uses can provide revenue to CCS facilities, incentivizing further implementation of CCS technologies.
The State of CCS
According to the Global CCS Institute’s 2021 Status Report, plants in operation or under construction have the current capacity to capture 40 million metric tons of CO2 per year. (For context, the United States alone emitted over 5 billion metric tons of CO₂ in 2019). Globally, there are 31 commercial CCS facilities in operation or under construction. In the United States alone, there are 10 commercial operational facilities, as shown in the map below.
In 2021, 102 CCS facilities were in advanced and early stages of development. Combined with facilities already under construction or in operation, these facilities could capture 149.3 million metric tons of CO2 per year.
How CCS Works
Deploying CCS at a power plant or industrial facility generally entails three major steps: capture, transportation, and storage.
Several different technologies can be used to capture CO₂ at the source (the facility emitting CO₂). They fall into three categories: post-combustion carbon capture (the primary method used in existing power plants), pre-combustion carbon capture (largely used in industrial processes), and oxy-fuel combustion systems.
For post-combustion carbon capture, CO₂ is separated from the exhaust of a combustion process. For pre-combustion capture technologies, there are commercially available technologies used by industrial facilities; however, for power plants, pre-combustion capture is still in early stages of development. This technology involves gasifying fuel and separating out the CO₂. It may be less costly than other options; however, it can only be built into new facilities—to retrofit an existing facility for pre-combustion capture would be prohibitively costly. For oxy-fuel combustion, fuel is burned in a nearly pure-oxygen environment, rather than regular air, which results in a more concentrated stream of CO₂ emissions, which is easier (and cheaper) to capture.
Once the CO₂ is captured, it is compressed and deeply chilled into a fluid and transported to an appropriate storage site, usually by pipelines and/or ships and occasionally by trains or other vehicles.
In the third step, the CO₂ is injected into deep, underground geological formations, where it is stored long term, rather than being released into the atmosphere. Storage sites used for CO₂ include former oil and gas reservoirs, deep saline formations, and coal beds.
Barriers to Deployment
Cost of Implementation
One of the most significant barriers to widespread deployment of CCS technologies is high cost. Although cost estimates vary widely, the greatest costs are typically associated with the equipment and energy needed for the capture and compression phases. Capturing the CO₂ can decrease power and industrial plants’ efficiencies and increase their water use, and the additional costs posed by these and other factors can ultimately render a CCS project financially nonviable. (Increased water use may also pose problems for plants in areas that already face water scarcity.)
Additionally, since CCS deployment is in its early stages, financial returns on a CCS project are riskier than normal operations. Consequently, investors impose higher risk premiums (the minimum amount of expected return required to attract investment), which further increases the private cost of the investment. Therefore, mitigating risk for investors is vital for incentivizing investment and development of CCS. Research, Development and Deployment (RDD) policies that can de-risk such investments are thus highly desirable, along with policies that can stimulate innovation and bring costs down and scale up deployment. Presently, the Department of Energy’s Carbon Capture Program is exploring these issues.
In addition to high costs of capture technology, there are also challenges associated with transporting CO₂ once it is captured. Significant energy is required to compress and chill CO₂ and maintain high pressure and low temperatures throughout pipelines, and the pipelines themselves are expensive to build. In order to safely carry the condensed, highly pressurized CO₂, pipelines must be specially designed: existing oil and gas pipelines cannot be used. Impurities in the CO₂ stream (including water) can cause damage to pipelines and lead to dangerous leaks and explosions as the compressed fluid rapidly expands to a gas. The exceedingly cold temperatures can cause pipe and equipment to become brittle. Finally, each source of CO₂ must be connected to an appropriate storage site via pipeline, which can make CCS more difficult and expensive to implement in areas at a distance from geological formations that are appropriate to use for storage.
Limitations on the availability of geologic storage is generally not considered a barrier to widespread CCS deployment—at least not in the short to medium term. Indeed, there is probably plenty of storage worldwide for at least the next century, specifically in the United States. While some researchers have expressed concerns about the long-term ability of storage sites to sequester carbon without significant leakage, a 2018 IPCC report concludes that “current evaluation has identified a number of processes that alone or in combination can result in very long-term storage” (pg. 245). There is also some potential for seismic activity caused by underground injection of CO₂; researchers continue to look at ways to minimize this risk, including considering above-ground carbon dioxide mineralization as an alternative to underground storage.
Uncertain Public Support
Public support is increasingly recognized as critical to the widespread implementation of CCS. Although there are few indications of public perception regarding CCS, a 2020 poll conducted by Resources for the Future, Stanford University, and ReconMR notes that most Americans have consistently favored federal government efforts to reduce air pollution from coal-fired power plants. At the same time, siting pipelines for fossil fuels is highly contentious – both from affected and nearby landowners and for groups opposed to greater use of and access to fossil fuels.
Several considerations probably play a role in public opinion about CCS: the benefit of mitigating CO2 emissions; the implication that use of CCS prolongs use of fossil fuels; the role of pipelines in impairing landscape and fragmenting ecologically sensitive areas; the perceived and actual safety of transportation and storage of CO₂; the extent to which other climate solutions are implemented in addition to CCS. Further research is needed to better understand how the public thinks about and would react to substantial deployment of CCS.
Policies Related to CCS
As highlighted in the Intergovernmental Panel on Climate Change’s Special Report on Carbon Dioxide Capture and Storage, in order to accelerate CCS development, policies that increase demand and reduce costs will be needed. Several different types of policies have the potential to bring down the costs of CCS and encourage research, development, and deployment, including carbon pricing policies, public investment and subsidies, and clean energy standards that credit companies generating electricity or other energy sources using CCS.
In the United States, multiple enacted policies aid and encourage the use of CCS technology. National tax credits for carbon sequestration are created through Section 45Q of the Internal Revenue Code. Adding to these national tax credits, several tax credit and other crediting mechanisms exist at the state level in California, Texas, Louisiana, Montana, and North Dakota.
The Bipartisan Infrastructure Law, which passed in 2021, allocated billions of dollars of funding for CCUS projects. The law expands existing programs, sets aside funding for pipeline construction, and improves the permitting process for geological sequestration wells. It also establishes or expands major programs designed to support the development of this technology.
In mid-2021, congressional Democrats introduced the Build Back Better Act, which would increase the value of the tax credit associated with 45Q. The proposal to increase the subsidy rate from $50/ton of captured CO2 to roughly $85/ton remains contentious, and as of this writing the Build Back Better Act remains in limbo. The proposal would also create a minimum capture requirement for plants; any plant that captures less than 75 percent of its emissions would not be eligible for the credits. Bolstering the 45Q tax credits is especially attractive to decisionmakers who oppose the total phase out of fossil fuels.
- Global CCS Institute | Understanding CCS
- National Energy Technology Laboratory | Carbon Storage FAQ
- Meeting the Dual Challenge: A Roadmap to At-Scale Deployment of Carbon Capture, Use, and Storage
Status of CCS
More from RFF
- Podcast | Going Deep on Carbon Capture, Utilization, and Storage (CCUS), with Julio Friedmann
- Blog | 45Q&A: A Series of Comments on the 45Q Tax Credit for Carbon Capture, Utilization, and Storage (CCUS)
- Issue Brief | Subsidizing Carbon Capture Utilization and Storage: Issues with 45Q
- Workshop | "The Future of Carbon Capture, Utilization, and Storage (CCUS): Status, Issues, Needs"
Vincent Gonzales is a research assistant at RFF who currently works on projects related to the economics of dam removal, voluntary contributions to endangered species conservation, industrial emissions regulation, and more.
Resources Radio — May 5, 2020
Going Deep on Carbon Capture, Utilization, and Storage (CCUS), with Julio Friedmann
Julio Friedmann demystifies the many complexities underlying CCUS technologies and outlines policies that could facilitate further deployment.
Common Resources — Mar 4, 2020
45Q&A: A Series of Comments on the 45Q Tax Credit for Carbon Capture, Utilization, and Storage (CCUS)
RFF’s Jay Bartlett and Alan Krupnick provide key context for a new blog series, which will assess IRS guidance on how the 45Q carbon credit program will be administered.