CCUS Policies andBusiness Models
Building a commercial market

INTERNATIONAL ENERGYAGENCYThe IEA examines thefull spectrumof energy issues
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CCUS Policies and Business Models: building a commercial market

Abstract

Abstract
Carbon capture, utilisation and storage (CCUS) is an important technology forachieving global net zero emissions. Momentum on CCUS has increased in recent
years, but the deployment of projects has remained relatively flat. Emerging
business models are opening the door to new investment opportunities, and withthat bringing new challenges to be overcome.
The scale-up needed to reach net zero emissions by mid-century represents amajor undertaking, and policy support and co-ordination are crucial. Policy makers
have a suite of tools at their disposal to create the conditions necessary to drive
long-term investment, enabling industry to take the next step forward and push
CCUS into a viable and sustainable commercial market.
This IEA CCUS Handbook provides governments with a policy toolkit to tackle theoverarching challenges to CCUS deployment. It gives an overview of existing
policies that have helped launch CCUS projects to date and identifies the main
challenges to future large-scale deployment. The handbook also highlights
international best practices, drawing on existing and proposed government efforts
to address these challenges.
The handbook is supported by our CCUS Projects Database 1 and complements
the IEA CCUS Handbooks on Legal and Regulatory Frameworks for CCUS andon CO2 Storage Resources and their Development.

The IEA CCUS Projects Database available for download contains projects updates as of February 2023. This report relies
on an internal version of the database with project updates as of Q2 2023, with the exception of major project updates, which
include projects (re)entering operation or construction, which are included up to October 2023.

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CCUS Policies and Business Models: building a commercial market

Acknowledgements

Acknowledgements
This study was prepared by the Energy Technology Policy (ETP) Division of the
Directorate of Sustainability, Technology and Outlooks (STO) of the International
Energy Agency (IEA). The study was designed and directed by Timur Gül, Chief
Energy Technology Officer and Head of the Energy Technology Policy Division.
The analysis and production was co-ordinated by Sara Budinis. The lead authors
were (in alphabetical order) Sara Budinis, Mathilde Fajardy, Carl Greenfieldand Flowra (Yuting) Zhang.
Per-Anders Widell provided essential support throughout the process. Lizzie
Sayer edited and produced the manuscript. Thanks also to the IEA
Communications and Digital Office for their help, particularly to Jethro Mullen,
Poeli Bojorquez, Curtis Brainard, Hortense de Roffignac, Astrid Dumond,
Merve Erdil, Grace Gordon, Julia Horowitz, Oliver Joy and Aya Abu Shaqra.
Valuable comments and feedback were provided by other colleagues within the
IEA, in particular Simon Bennett, Luca Lo Re and Tiffany Vass.

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Valuable input to the analysis was provided by a series of consultations with key
government officials including (in alphabetical order) Niels Berghout (Ministry of
Economic Affairs and Climate Policy, The Netherlands), Krzysztof (Chris)
Bolesta, (DG Energy, European Commission), Alexandre Dedo (DG Energy,
European Commission), Noah Deich (US Department of Energy), Alexander
Engh (Norwegian Ministry of Petroleum and Energy), Ramsey Fahs (USDepartment of Energy), Johanna Fiksdahl (DG Energy, European Commission),
Jason Gadoury (Natural Resources Canada), Kathryn Gagnon (Natural
Resources Canada), Rory Jacobson (US Department of Energy), Will Lochhead(UK Department for Energy Security and Net Zero), Jessica Mackenzie (UKDepartment for Energy Security and Net Zero), Saviz Mortazavi (Natural
Resources Canada) Henriette Nesheim (Norwegian Ministry of Petroleum andEnergy), Monica Reed (Natural Resources Canada), Norihiko Saeki (Japan
Ministry of Economy, Trade and Industry), Tina Schøn (Danish Energy Agency),
Henrik Sulsbrück (Danish Energy Agency), Stig Svenningsen (Norwegian
Ministry of Petroleum and Energy), Matthew Taylor (UK Department for Energy
Security and Net Zero), Chris Thackeray (UK Department for Energy Security
and Net Zero) and Pil Krogh Tygesen (Danish Energy Agency).

CCUS Policies and Business Models: building a commercial market

Acknowledgements

Nabil Al Bulushi

Petroleum Development Oman

Nawal Al-Hanaee

Ministry of Energy and Infrastructure, United ArabEmirates

Abdul'Aziz Aliyu

Technology Collaboration Programme on
Greenhouse Gas R&D

Jack Andreasen

Breakthrough Energy

Mark Preston
Aragones

BellonaPaulina Becerra

General Electric Power

Brendan Beck

Australian Energy Producers

Niels Berghout

Ministry of Economic Affairs and Climate Policy,
The Netherlands

Krzysztof (Chris)
Bolesta

DG Energy, European Commission

Keith Burnard

Technology Collaboration Programme on
Greenhouse Gas R&D

Johanna Fiksdahl

DG Energy, European Commission

Kathryn Gagnon

Natural Resources Canada

Rory Jacobson

US Department of Energy

Maria LeisBreakthrough Energy

Juho Lipponen

Clean Energy Ministerial CCUS Initiative

Will Lochhead

UK Department for Energy Security and Net Zero

Toby Lockwood

Clean Air Task Force

Claude Lorea

Global Cement and Concrete Association

Wilfred Maas

Carbon Direct

Iain Macdonald

Shell

Rachael Moore

World BankPAGE | 5

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Several senior government officials and experts provided essential input andfeedback to improve the quality of the report. They include:Acknowledgements

Isabela Morbach

CCS Brazil

Nicolai MyklebySkaara

Aker Carbon Capture

Naser OdehKing Abdullah Petroleum Studies and ResearchCenterDavid Phillips

Aker Carbon Capture

Andrew Purvis

World Steel Association

Simon Roussalany

SINTEF

Ed Rubin

Carnegie Mellon University

Stijn Santen

European Business and Innovation Centre
Network

Robert Kennedy
Smith

US Department of Energy

Henrik Sulsbrück

Danish Energy Agency

Eve Tamme

Climate Principles

James Tarlton

UK Committee on Climate Change

Paolo Testini

Snam

Jan Theuleun

Heidelberg Materials

Martin Towns

BP

Fridtjof Unander

Aker Horizons

Machteld van den
Broek

Delft University of Technology

Vikram Vishal

Indian Institute of Technology Bombay

Zhang Xian

Administrative Centre for China's Agenda 21

Dong Xu

China Energy

Ruina Xu

Tsinghua University

Alex Zapantis

Global CCS Institute

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CCUS Policies and Business Models: building a commercial market

CCUS Policies and Business Models: building a commercial market

Table of contents

Table of contents
Executive summary ................................................................................................................ 10
Chapter 1: Setting the context .............................................................................................. 14
Overview .................................................................................................................................. 14
Net zero pledges and the role of CCUS ................................................................................... 18
Is CCUS on track? ................................................................................................................... 21
CCUS dashboards ................................................................................................................... 27
The IEA CCUS Handbook series ............................................................................................. 32

Chapter 2: Policy trends........................................................................................................ 34
Overview .................................................................................................................................. 34
Existing CCUS policies ............................................................................................................ 35
CCUS policy gaps .................................................................................................................... 47

Chapter 3: Business model trends........................................................................................ 49
Overview .................................................................................................................................. 49
From full-chain to part-chain model.......................................................................................... 51
Possible revenue streams ........................................................................................................ 57

Chapter 4: Challenges for future deployment ....................................................................... 61
Economic viability ..................................................................................................................... 61
Long lead times ........................................................................................................................ 73
Project complexity .................................................................................................................... 78
The innovation gap ................................................................................................................... 84

Chapter 5: A policy toolkit to accelerate deployment and build a commercial market for
CCUS ........................................................................................................................................ 86
Overview on types of approaches to build a commercial market ............................................ 86
How can policy effectively and efficiently tackle existing gaps and challenges? ..................... 89
Conclusions .............................................................................................................................. 90
A policy toolkit ........................................................................................................................ 105

General annex..................................................................................................................... 107
Annex A: Large-scale CCUS operating projects, 2023 .......................................................... 107
Annex B: Principal capture technologies ............................................................................... 110
Annex C: CCUS cost metrics ................................................................................................. 112
Annex D: Dashboard notes .................................................................................................... 113
Annex E: Regional and country groupings ............................................................................. 116
Abbreviations and acronyms .................................................................................................. 119

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Units of measure .................................................................................................................... 120

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Table of contents

List of figures
A policy toolkit for CCUS ................................................................................................................. 13
Schematic of a potential CO2 management value chain ................................................................. 15
Large-scale CCUS projects, operating and under construction, 2023 ............................................ 17
Evolution of the CO2 capture project pipeline, 2012-Q2 2023 ........................................................ 18
Capacity of current and planned large-scale CO2 capture and storage projects vs.
the Net Zero by 2050 Scenario, 2022-2030 .................................................................................... 22
Operating and planned CO2 capture capacity by application, Q2 2023 vs. 2030 ........................... 23
Operating and planned CO2 capture capacity by region, Q2 2023 vs. 2030 .................................. 25
Operating and planned CO2 storage facilities by type of storage, 2023 ......................................... 26
Key elements of a CCUS business model ...................................................................................... 50
Levelised cost of CO2 avoided between CCUS and unabated route across sectors...................... 63
Impact of cost of capital on levelised cost of capture for selected sectors ..................................... 64
Levelised cost of capture for different stream capture rates in coal andgas power generation (left) and plant capture rates in biodiesel, bioethanol and gas SMR (right) 66
Levelised cost of products for different industries and production routes ....................................... 68
Levelised cost of hydrogen production for different regions and gas prices, 2022 ......................... 69
Levelised cost of electricity of selected technologies, 2022 ............................................................ 70
Levelised cost of CO2-based fuel production, 2022 ........................................................................ 72
Cost of removal and storage permanence for different removal methods ...................................... 73
High-level planning and indicative timelines of a CCUS project ..................................................... 75
Lead times of selected operating and planned CCUS projects ...................................................... 76
Capture and storage capacity in planning around the North Sea, 2019-2023 ................................ 80
CO2 emissions clusters and storage hubs in planning in selected regions, 2023........................... 82
Cumulative CO2 captured by Technology Readiness Level (2022-2050)
in the Net Zero by 2050 Scenario, by sector ................................................................................... 85
Spectrum of existing approaches to building a commercial market for CCUS ............................... 87
A policy toolkit for CCUS ............................................................................................................... 106

List of boxes
What is CCUS and how does it work? ............................................................................................ 14
How can a value proposition for CCUS technologies be established? ........................................... 50
Selected CCUS hubs approaches ................................................................................................... 55
Is EOR a good revenue stream for CCUS? .................................................................................... 58
Revenue streams by Technology Readiness Level (TRL) .............................................................. 60
Can high plant capture rates be achieved? ..................................................................................... 65
Data sharing and transparency efforts for CO2 storage in the United Kingdom
and European Union ....................................................................................................................... 94
Enabling social acceptance of CCUS by showing community benefits .......................................... 95

List of tables

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Countries with a net zero target explicitly mentioning CCUS .......................................................... 19
Selected carbon management and CCUS strategies ..................................................................... 20
Selected storage hubs in development by region, 2023 ................................................................. 31
Current policy mechanisms for CCUS............................................................................................. 35
Existing CCUS policy mechanisms by country ............................................................................... 37
Legal and regulatory frameworks of selected countries .................................................................. 38

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Table of contents

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Cost reduction policies .................................................................................................................... 40
State-owned enterprises involved in CCUS .................................................................................... 42
Carbon pricing policies of selected jurisdictions .............................................................................. 44
Selected examples of CCUS business models ............................................................................... 53
Overview of potential risks for CCUS projects ................................................................................ 78
Policy tools to address challenges to CCUS deployment ............................................................... 91
Obligations under the London Protocol ......................................................................................... 102
Large-scale CCUS operating projects, 2023 ................................................................................. 107

CCUS Policies and Business Models: building a commercial market

Executive summary

Executive summary
Carbon capture, utilisation and storage (CCUS) is an
important tool for emissions reduction and removal
CCUS accounts for 8% of cumulative emissions reduction in the Net Zero
Emissions by 2050 Scenario (NZE Scenario) to 2050. CCUS is particularly well
suited to applications characterised by highly concentrated CO2 streams andthose lacking technically or commercially available solutions for carbon
abatement. Moreover, it is the only technology-based solution for carbon removal,
where CO2 is captured directly or indirectly from the air and permanently stored
underground. Carbon removal can help balance residual emissions from heavy
industries and long-distance transport.
Governments have taken different approaches to supporting CCUS projects,
either through broad funding incentives or targeted support for selected
projects. Two types of policies in particular have contributed to the CCUS projects
in operation today: legal and regulatory frameworks that facilitate and enabledeployment, and cost reduction measures, such as grants, tax credits and the useof state-owned enterprises (SOEs). These measures combined have supported
early large-scale projects to move into operation.

New business models are emerging, shifting risk
allocation across the value chain
The full-chain business model has played an important role in the early
development phase of CCUS. In such models, a single project framework is used
for the full CCUS value chain from CO2 capture to transport and storage. The oiland gas industry has played a major role in these projects, thanks to its expertisein operating large-scale projects and knowledge of the subsurface. However, theindustry’s historical focus has been enhanced oil recovery (EOR) and a shift is
now required to one that centres on dedicated CO2 storage.

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While the full-chain business model has some advantages, it comes withmultiple risks at each step of the chain. These are typically associated with aneed for technical and operational expertise in all fields, and high CAPEX. Fullchain business models alone are not well suited to CCUS applications needed fornet zero, as some emitters may not have the internal expertise. For capture, thisis particularly relevant for applications where CO2 is not already separated as partof the process, and which require dedicated capture equipment.

CCUS Policies and Business Models: building a commercial market

Executive summary

New part-chain business models are emerging, characterised by separate
entities specialising in different parts of the CCUS value chain. While the oiland gas sector continues to play a role, new specialised players are entering themarket, such as chemical and engineering companies to provide CO2 capture
solutions and infrastructure, shipping companies that are expanding their portfolio,
and new companies focusing exclusively on CCUS. Old and new players are now
establishing joint ventures in a CCUS hub configuration, which today appears topresent a promising opportunity. CCUS hubs can shorten lead times forconnecting to shared infrastructure, reduce costs through increased competition
within a more specialised corporate landscape and through cost-sharing on
infrastructure, and allow more dispersed and smaller emitters to connect to CO2transport and storage (due to economies of scale).
With new business models come new project complexities. These include
greater need for co-ordination across the value chain, mitigation of counter-party
risks, allocation of long-term liability, and management of shared, cross-border
CO2 transport and storage infrastructure. Governments can support the
deployment of these new models and step in where challenges remain and theprivate sector struggles to progress.

Global project announcements are growing
exponentially, but challenges for deployment remain
CCUS deployment has remained relatively flat in the last decade, partially
due to a lack of policies to support the establishment of a sustainable market
for CCUS. This lack of progress has led to progressive downward revisions in therole of CCUS in the IEA’s updated NZE Scenario. Momentum, however, is
growing. Over the past 3 years, more than 400 new projects have been announced
along the CCUS value chain, and over 45 countries have CCUS projects indevelopment. While the current project pipeline would only meet just over onethird of deployment needed by 2030 in the NZE Scenario, these needs could be
met in full if momentum continues, projects reach commissioning on time, and leadtimes are reduced. The call is on industry to successfully deliver on CCUS
projects, and for policymakers to support them.

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There is a need for continuous innovation to reduce energy penalty andcosts for CCUS applications. While some CCUS technologies have been in use
for decades, operating CCUS projects have been largely concentrated in lowestcost areas such as natural gas processing. In contrast, around three-quarters of
capture capacity by 2050 in the NZE Scenario relies on technologies andapplications that are still at demonstration or prototype scale. For all CCUS
applications, economic viability remains a significant hurdle, as costs can beprohibitively high compared to unabated technologies. In addition, long lead times

CCUS Policies and Business Models: building a commercial market

Executive summary

for project development and implementation can further impede progress,
particularly related to CO2 storage development.

A suite of policy tools is neededCountries are recognising the value of CCUS in meeting their climate andenergy goals, but there is a gap between intention and action. Around half ofthe countries with a net zero pledge in place (48 out of 93 countries plus theEuropean Union) have identified CCUS as contributing in some way to the target.
Despite this, under 20 countries have CCUS policies on the books that go beyond
R&D initiatives. Grants and tax credits, and an enabling legal and regulatory
framework alone are insufficient to scale up CCUS across applications at therequired pace. The creation of a commercial market for CCUS requires a suite ofpolicy tools to address all the challenges associated with CCUS deployment, andensure that investment continues to flow into CCUS projects, and projects arecompleted on time.
Particular attention must be placed on supporting CCUS deployment inemerging markets and developing economies (EMDEs). Approximately half of
all CO2 capture capacity in the NZE Scenario is located in EMDEs by 2030, up
from one-third today. Following the closure of the Asian Development Bank’s CCS
Trust Fund in 2022, and with the planned closure of the World Bank’s CCS TrustFund in 2024, there will be a major gap in multilateral development funding support
for CCUS in EMDEs. Dedicated international funding instruments are needed tosupport the development of CCUS-enabling environments and/or piloting, as most
EMDEs typically rely on some level of multilateral development funding to performthe technical assistance studies that underpin the development of legal andregulatory frameworks and CCUS policies.

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The IEA has developed a policy toolkit for governments to build acommercial market for CCUS and tackle the overarching economic, leadtime, innovation and complexity challenges to deployment. How
governments approach this will depend on institutional, economic and politicalfactors that will influence whether they opt for more or less intervention, or shift
their approach as the market develops. These tools will help to create an enabling
environment for CCUS, and can help reduce costs to spur early market movement,
support revenue streams to secure necessary infrastructure, set strategic targets
to signal long-term commitment and regulate industrial activities to drive market
demand.

CCUS Policies and Business Models: building a commercial market

Executive summary

A policy toolkit for CCUS

Policy approaches for CCUS deployment
There is no one single approach to building a commercial market for CCUS. Various approaches should be thought of as existing on aspectrum: incentive- or penalty-based, shared cost allocation and full control approach.

Incentive- or penalty-based approach

Shared cost allocation approach

Full control approach

Policies to influence how a privatecompany will make its investment
decisions. This is either done withincentives (e.g. grants, loans or tax
credits) to private companies to deploy acertain technology or adopt a certain
practice, or with penalties (e.g. taxes orfees) for not complying with regulations.

Economic parameters govern the costand revenue structures of a company,
which is shared between the public
and private sectors. This approach
may be well suited for large
infrastructure endeavours, such as thedevelopment of a CO2 transportationand storage network.

Instead of solely relying on the private
sector to develop a market, this approachleans on state-owned enterprises tofinance, build, own and operate projects.
It may still rely on some level of private
sector involvement, whether it is throughjointly developing projects, as a customer
or as an investor.

Level ofgovernment
intervention

Approaches

Institutional, economic and political factors will influence what part of the CCUS policy spectrum a country may end up on, and countries
may move along the spectrum as these factors change and as the domestic market for CCUS matures. Where a country sits on the
spectrum may impact the types of policy tools that it chooses to use.

Low intervention

High intervention

Policy toolkit to address CCUS challenges
Governments have several policy tools to address challenges to CCUS deployment. It is important that these tools work together totackle economic viability, lead time, innovation and complexity challenges.

Economic viability

Lead times

Innovation gaps

Project complexity

Absent any policy support, theeconomic viability of a CCUS projectis a major barrier to wide-scale
deployment. High costs and a lack ofrevenue streams for projects directly
impact a project’s economic viability.

Lead times (i.e. the total
time required between a
project’s conception andcommissioning) currently
average around six years.
Reaching net zero goals
hinges on cutting theselead times.

The technology maturity of
CCUS varies considerably byandtechnology
type
application. Technologies which
are mature today are also notnecessarily the ones consistent
with a net zero energy system.

The shift to a hub modelmeans a complex project
structure, with implications forrisk, timing and co-ordination.
Special considerations arealso needed for carbon
dioxide removal technologies.

 Grants, tax credits, loans One-stop shop for
permitting Research,development anddemonstration

 Long-term liability
legislation

 State-owned enterprises

Policy tools

 Carbon pricing and leakage
policy Public procurement
 Low-emissions mandates (Carbon) contracts-fordifference Regulated asset base Emerging market anddeveloping economy
considerations: concessional
finance, sustainable debt,
multilateral funding instruments

 Clear approval
timelines Internal regulatory
capacity Precompetitive
resource assessments
 Data sharing andtransparency
 Community
engagement
requirements

 Platforms forinternational cooperation
 Foreign direct
investment fortechnology codevelopment

 Competitive
solicitations for hubs One-off backstop
agreements for firstmovers London Protocol
specifications
 Definition of highquality removals
 Monitoring, reportingand verification
mechanisms
IEA. CC BY 4.0.

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Challenges

Whatever tools a government chooses to employ will be unique to that country, but it is vital that the tools are effective and efficient, setting up
a viable and sustainable commercial market for CCUS that attracts investment and retains it over the long term.

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

Chapter 1: Setting the context
Overview
Carbon capture, utilisation and storage (CCUS) is an important suite oftechnologies for the decarbonisation of the energy system towards global net zero
emissions by 2050. CCUS technologies can reduce emissions in some industrial
sectors in which emissions are hard to abate, where other technology options arelimited or not yet mature (e.g. cement, iron and steel, chemicals). They can alsoenable low-emissions hydrogen production, supporting the decarbonisation ofother parts of the energy system, including industry and long-distance transport.
Moreover, CCUS technologies can facilitate the continued operation of existing
industrial and power plants, avoiding early and potentially costly retirement ofvaluable assets. Finally, CCUS technologies can remove CO2 from the air throughbioenergy with carbon capture and storage (BECCS) and direct air capture withstorage (DACS).

What is CCUS and how does it work?
CCUS involves the capture of CO2, generally from large point sources such asindustrial or power generation facilities that use either fossil fuels or biomass asfuel, or from the air. If not being used on-site, the captured CO2 is compressed andtransported by pipeline, ship, barge, rail or truck to be used in a range of industrial
applications (e.g. synthetic fuels, building materials), or injected into deep
geological formations such as saline formations, depleted oil and gas reservoirs or
unconventional storage resources (e.g. basalts, peridotites) for permanentstorage.
CCUS technologies are particularly well suited for applications where alternative
decarbonisation methods are not technically or commercially available, such as
heavy industry and carbon removal. They are one of the few options available foraddressing industrial process emissions, and they can also help to balance theintermittency of renewable energy through the decarbonisation of base load power
generation.

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While CO2 use can deliver climate benefits, it is a complement rather than analternative to CO2 storage, which is expected to be deployed at a much larger scalein order to reach international climate goals. In the IEA Net Zero Emissions by
2050 Scenario (NZE Scenario), around 95% of total captured CO2 (across all
CCUS applications) is destined for CO2 storage rather than use.

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

Carbon dioxide removal (CDR) can balance out residual emissions from sectors
such as heavy industry and long-distance transport. Technology-based CDR
includes BECCS and DACS. BECCS involves capturing and permanently storing
CO2 from processes where biomass (which extracts CO2 from the atmosphere as
it grows) is refined or burned to generate energy. DACS involves the capture ofCO2 directly from ambient air (as opposed to a point source) for permanentstorage. These technology-based approaches are part of a much broader CDR
portfolio including nature-based solutions (such as afforestation and reforestation)and enhanced natural processes (such as biochar and enhanced weathering).
Bioenergy with carbon capture and direct air capture are also able to supply CO2that is not fossil-based for CO2 utilisation.
Schematic of a potential CO2 management value chain

IEA. CC BY 4.0.
Notes: CO2 transport can also include barges, train and tank trucks.



Carbon capture and storage (CCS): includes applications where the CO2 iscaptured and permanently stored. This includes DACS and BECCS.



Carbon capture and utilisation (CCU) or CO2 use: includes applications
where the CO2 is captured and used, for example in the production of fuels

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In this report:

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

and chemicals. This includes both bioenergy with carbon capture and direct
air capture for CO2 utilisation.


Carbon capture, utilisation and storage (CCUS): includes CCS, CCU, as
well as applications where the CO2 is both used and stored, for example inenhanced oil recovery (EOR) or in building materials, where the use results insome or all of the CO2 being permanently stored.

From a commercial perspective, CO2 separation technologies have beensuccessfully implemented and operated for decades where it makes commercial
sense to do so, for instance to separate CO2 from methane after it is extracted
from a natural gas reservoir, or to separate CO2 from hydrogen during ammonia
production (in order to produce urea). Despite the first CCUS projects having been
operational since the 1970s and 1980s, progress towards CCUS as a climatechange mitigation approach has been slow. The lack of dedicated revenue
streams, incentives and regulations for carbon capture applications aimed atemissions reduction has translated into low deployment of CCUS for dedicated
CO2 storage purposes. Of the 41 facilities capturing CO2 today, 2 only 9 aretransporting CO2 to dedicated CO2 storage sites, while the remainder are injecting
the CO2 for the purpose of increasing production from depleting oil fields through
EOR, or for other industrial uses.

Includes the Petra Nova plant in the United States which resumed operation in September 2023.

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CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

Large-scale CCUS projects, operating and under construction, 2023

IEA. CC BY 4.0.
Notes: Large-scale refers to a capture capacity equal to or above 100 000 t CO2/yr (or 1 000 t CO2/yr for direct air capture
applications). Storage includes both dedicated CO2 storage and CO2-enhanced oil recovery (EOR). While most of the CO2
injected for EOR is retained in the reservoir over the life of the project, additional monitoring and verification is required toconfirm that the CO2 has been permanently stored.
Source: IEA (2023), CCUS Projects Database.

Some progress has been recorded during the past five years, with over 500
projects currently in development globally across the entire CCUS value chain,and new policies to support commercial deployment being proposed. While thispositive momentum is encouraging, even if all these projects materialise into
operating plants, they would only represent just over a third of what is needed in
2030 to get on track with the NZE Scenario. 3 Achieving the 2030 level of global
deployment of CCUS in the NZE Scenario hinges on planned projects reachingcompletion, as well as a reduction in project lead times, which currently averagearound 6 years. 4 Adoption of best practices could compress lead times to around
3 to 4 years, if CO2 transport and storage infrastructure is already in place. On a
global scale, if the current momentum continues until 2026 and project lead times(from announcement to operation) decrease to around 4 years on average, 5 the2030 deployment target in the NZE Scenario could be achieved.

This report is based on an updated and revised NZE Scenario, which sets out a pathway for the global energy sector toachieve net zero CO2 emissions by 2050.
4
Project lead time is defined here as the total time required between conception and commissioning of a facility.
5
Please refer to the section ‘’Long lead times’’ for the assumptions behind this estimate.

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3

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

Number of capture facilities

Evolution of the CO2 capture project pipeline, 2012-Q2 2023
500
400
300
200
100
0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Q2
Concept and feasibility
Advanced development
Under construction

Operating
IEA. CC BY 4.0.

Notes: Includes commercial-scale projects with a capture capacity over 100 000 t CO2/yr (or 1 000 t CO2/yr for direct air
capture applications). Includes capture projects for dedicated storage, enhanced oil recovery (EOR), and use as long as
CO2 is used in fuels, chemicals, polymers, building materials, or for yield boosting. Within planned industrial clusters, only
identified CO2 capture projects are included (not the full potential capture capacity of industrial clusters for which capturesources are not specified). ‘’Under construction’’ also includes projects which have reached a final investment decision(FID) and for which construction is imminent.
Source: IEA (2023), CCUS Projects Database.

Net zero pledges and the role of CCUS
The number of countries that have pledged to achieve net zero emissions hasgrown rapidly over the past few years. When the IEA released its landmark Net
Zero by 2050 report in 2021, our analysis showed that pledges at that time – even
if implemented in full and on time – would still put the world on a path to 2.1°C ofwarming by the end of the century, missing the goals of the Paris Agreement andhugely increasing climate risks.
Since then, countries have raised their ambitions and more have pledged to reachnet zero by 2050 or soon after. Our updated analysis of these new targets – on
top of all of those made previously – shows that if they are met in full and on time,they would be enough to hold the rise in global temperatures to 1.7°C by the endof the century. As of October 2023, 93 countries plus the European Union havepledged to meet a net zero emissions target. Representing more than 85% of
global energy-related CO2 emissions, these net zero pledges are either enshrinedin legislation (i.e. legally mandated), mentioned in a policy document, or
announced.

PAGE | 18

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Governments are increasingly recognising the role that CCUS can play inachieving their net zero ambitions. Of the countries with a net zero pledge in place,CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

around half have identified CCUS as contributing in some way to the target, though
there is a wide range across countries. For example, some countries see CCUS
as a key pillar of economy-wide decarbonisation, including CCUS as an option to
decarbonise the power and industrial sectors. Others see CCUS as having a very
limited role, such as focusing only on cement decarbonisation, or technologybased carbon removals, or restricting CCUS activities to R&D efforts.
This is also reflected in some countries’ Nationally Determined Contributions(NDCs) under the Paris Agreement. While the level of detail can vary considerablyacross NDCs, more than 15 NDC submissions (out of 168) include CCUS. 6
Among them, only Saudi Arabia and Bahrain explicitly mention direct air capture(DAC).
Countries with a net zero target explicitly mentioning CCUS
Country

Target Year

Legally Mandated

CCUS in NDC

GuyanaAchieved

No

No

Finland

2035

Yes

No

Iceland

2040

Yes

Yes

Germany

2045

Yes

No

Nepal

2045

No

No

Sweden

2045

Yes

No

Australia

2050

Yes

Yes

Cambodia

2050

No

No

Canada

2050

Yes

Yes

Denmark

2050

Yes

No

France

2050

Yes

No

Greece

2050

Yes

No

Hungary

2050

Yes

No

Ireland

2050

Yes

No

Italy

2050

No

No

Japan

2050

Yes

Yes

Korea

2050

Yes

No

Latvia

2050

No

No

Lithuania

2050

No

No

Malta

2050

No

No

Morocco

2050

No

Yes

Netherlands

2050

Yes

No

New Zealand

2050

Yes

No

Norway

2050

No

Yes

Oman

2050

No

No

Singapore

2050

No

No

Slovak Republic

2050

No

No

Australia, Bahrain, Canada, China, Egypt, Iceland, Iran, Japan, Morocco, Norway, Pakistan, Saudi Arabia, Türkiye, United
Arab Emirates, United Kingdom, United States and Viet Nam.

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6

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

Country

Target Year

Legally Mandated

CCUS in NDC

Slovenia

2050

No

No

South Africa

2050

No

No

Spain

2050

Yes

No

Sri Lanka

2050

No

No

Switzerland

2050

Yes

No

Tunisia

2050

No

No

United Arab Emirates

2050

No

Yes

United Kingdom

2050

Yes

Yes

United States

2050

No

Yes

Viet Nam

2050

No

Yes

Türkiye

2053

No

Yes

Bahrain

2060

No

Yes

China

2060

No

Yes

Ghana

2060

No

No

Indonesia

2060

No

No

Kazakhstan

2060

No

No

Saudi Arabia

2060

No

Yes

Ukraine

2060

No

No

Thailand

2065

No

No

India

2070

No

No

Nigeria

2070

Yes

No

Notes: New Zealand has only identified direct air capture as a possible removal solution; Sweden only identifies biogenic
carbon capture as a possible removal solution; Slovenia’s net zero goal is under proposed legislation; Malta has identified
CO2 use as a promising research area.
Source: IEA Climate Pledges Explorer and Clean Air Task Force.

In step with the recognition of CCUS in net zero plans, governments are also
starting to issue carbon management and CCUS strategies to signal how they
intend to deploy CCUS and in what areas. These strategies, which may also
include specific CO2 capture or storage targets, can be in the form of technology
roadmaps or high-level plans. In other cases, such as in Denmark and theNetherlands, these strategies are enshrined in broader legislation or politicalstrategy. There are currently at least six strategies in place – all of which havebeen published in the past few years – and at least another five in development.
Selected carbon management and CCUS strategies

DenmarkJapan
Netherlands
UnitedKingdom

Strategy Name
Carbon Management Strategy
Agreement on Strengthened
Framework Conditions for CCS in
Denmark
CCS Long-Term Roadmap
National Climate Agreement
CCUS Net Zero Investment
Roadmap

PAGE | 20

Specific Target or Capacity
2030: 16.3 Mt CO2/yr
No specific target, but thestrategy expects around
3.2 Mt CO2/yr by 2030
2030: 6-12 Mt CO2/yr
2050: 120-140 Mt CO2/yr
No specific target, but thestrategy set an initial cap at
7.2 Mt CO2/yr by 2030
2030: 20-30 Mt CO2/yr

StatusPublished
Published

Published
Published
Published

I EA CC BY 4.0.

Government
CanadaCCUS Policies and Business Models: building a commercial market

Government
United States
EuropeanCommission
FranceGermany
India
TürkiyeStrategy Name
Strategic Vision

Chapter 1: Setting the context

Specific Target or Capacity

Industrial carbon management
strategy
CCUS Strategy

StatusPublished
In development

Carbon Management Strategy
2030 Roadmap for CCUS for
Upstream E&P [exploration andproduction] Companies
Carbon Dioxide Capture andUtilization Technologies Roadmap
and Implementation Plan

2030: 4-8.5 Mt CO2/yr
2050: 15-20 Mt CO2/yr

In development
In development
In development

In development

Notes: This does not represent an exhaustive list; in the case of Denmark and the Netherlands, the strategy is enshrined inbroader legislation rather than a separate documented implementation plan; the Netherlands’ strategy originally suggested
a 7.2 Mt CO2/yr cap for its subsidy scheme, however this cap was then increased and subsequently removed in terms ofMt/yr; Canada’s capacity in 2030 represents a point-in-time estimate based on existing policy commitments andassumptions regarding the timing of project investment decisions, approvals and construction.

Is CCUS on track?
Overall deployment
Today, more than 45 countries have CCUS projects in development. If allannounced capture projects are built, around 400 Mt CO2 could be captured every
year globally by 2030 – more than eight times current capacity. Currently, around
65% of operating CO2 capture capacity is at natural gas processing plants, one of
the lowest-cost CO2 capture applications, but new CCUS developments are
increasingly targeting other applications. Based on the current project pipeline, by
2030 annual capture capacity from both new construction and retrofits could
amount to around 80 Mt CO2 from hydrogen production, around 80 Mt CO2 frompower generation and around 35 Mt CO2 from industrial facilities (e.g. cement andsteel production). Planned capacities for CO2 transport and storage have also
increased. Based on the current project pipeline, CO2 storage capacity could
reach more than 430 Mt CO2 per year by 2030.
Despite recent momentum, deployment of CCUS projects has been very slow overthe longer term, to a large extent due to the lack of policies and business casesthat would make investment possible. This points to the need for a morecomprehensive approach to policy-making for CCUS. The lack of progress has
led to progressive downward revisions of the role of CCUS in climate mitigation
scenarios, including the updated NZE Scenario.

Gap between announced deployment and the NZE
Scenario

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Despite the recent surge in CCUS announcements for capture, transport, storage
and full-chain projects, it is still the case that CCUS deployment by 2030 would

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

remain substantially below (little more than one-third of) the around 1 Gt CO2 peryear that is required in the NZE Scenario. This gap between the CCUS projectpipeline and the 2030 NZE Scenario deployment target highlights the urgent needfor further industry efforts and policy support.
While announcements indicate that the balance between dedicated CO2 storage
supply and planned demand based on capture capacities for 2030 can level out
globally, gaps could emerge on a regional scale, particularly given the long leadtimes associated with developing new CO2 storage resources. In the absence offurther efforts to accelerate CO2 storage development through government or
private sector resource assessment, the availability of well-characterised CO2
storage sites could become a bottleneck to CCUS deployment.

1 200

Operating
Under construction

800

Advanceddevelopment

400

Concept andfeasibility0

Gap to NZE:
utilisation

2022

2024

2026

2028

Storage

CaptureStorage

CaptureStorage

CaptureStorage

CaptureStorage

Gap to NZE: storage

CaptureMt CO₂ per year

Capacity of current and planned large-scale CO2 capture and storage projects vs. theNet Zero by 2050 Scenario, 2022-2030

2030
IEA. CC BY 4.0.

Notes: NZE = Net Zero Emissions by 2050 Scenario. The difference between CO2 captured and stored in 2030 in the NZE
Scenario is due to CO2 captured for utilisation in synthetic fuel production. Storage includes both dedicated CO2 storage
and CO2-enhanced oil recovery (EOR). While most of the CO2 injected for EOR is retained in the reservoir over the life of
the project, additional monitoring and verification is required to confirm that the CO2 has been permanently stored.
Source: IEA (2023), CCUS Projects Database.

CO2 capture applications are diversifying

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There are now 41 commercial capture facilities in operation globally, applying
CCUS to industrial processes, fuel transformation and power generation. Global
capture capacity culminates at just over 45 Mt CO2/yr. Most installed capture
capacity is associated with natural gas processing (65% of total operational
capture capacity), followed by hydrogen production in fertiliser, refining and coalto-gas plants (25%), and coal-based power (5%).

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

So far, project developers have announced ambitions to reach over 400 Mt CO2
per year of installed capture capacity by 2030. Based on the current projectpipeline, capture applications are likely to diversify over time: by 2030 the shareof annual capture capacity from both new construction and retrofits could amountto 20% from merchant hydrogen and ammonia production, 20% from power
generation, 15% from DAC and 8% from industrial facilities (mostly cement andchemicals production).
On the other hand, only around 25 commercial capture projects underdevelopment (6% of planned capacity for 2030) have taken a final investment
decision (FID) 7. CCUS is one of the main decarbonisation pillars required to geton track towards net zero, and its large-scale deployment is therefore necessary.
However, it is currently not cost competitive, not financeable and not even legal
for many applications and regions. The gap between planned deployment andneeded level by 2030 is particularly pronounced for industry and power generation(see Capture Dashboard).
Operating and planned CO2 capture capacity by application, Q2 2023 vs. 2030
Share of capacity (%)

Operating

2030

0%

10%

20%

30%

40%

50%

Natural gas processing
Biofuels
Power and heat
Iron and steel
Direct air capture

60%

70%

80%

90%

100%

Merchant hydrogen or ammonia
Other fuel transformation
CementOther industry
IEA. CC BY 4.0.

Note: Merchant hydrogen or ammonia excludes on-site hydrogen production in industry (included in other industry or otherfuel transformation).
Source: IEA (2023), CCUS Projects Database.

Project updates are as of Q2 2023, with the exception of major project updates which include projects (re)entering operationor construction, which are included up to October 2023.

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7

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

More countries are developing CCUS projects
Plans for CO2 capture facilities are expanding globally. Currently, 90% of
operational capacity is located in the United States, Brazil, Australia, the People’s
Republic of China (hereafter China), Canada and Qatar. Out of the four CCUS
projects that became operational during the first half of 2023, three are based in
China, 8 while one is based in the United States. 9 The United States also hosts
three of the five largest capture facilities, 10 while the largest is in Brazil, 11 and thethird largest plant 12 in Australia. However, the geographic distribution of CO2
capture projects in development is diversifying, with projects now being developedin more than 45 countries.
Advanced economies are contributing substantially to the total number ofannounced projects to 2030, with North America and Europe together making up
over 70% of planned capacity by 2030. In contrast, emerging economies arelagging behind, with little over 10% of planned capacity by 2030 (with the large
majority of it to be located in China, Indonesia and the Middle East). Good
progress has been made in the Asia Pacific region (where around 20 capture
projects have been announced since January 2022, which would bring total
capture capacity to around 45 Mt CO2 per year by 2030) and the Middle East
(where around 10 projects are in development across the region, in addition to the
3 already in operation).
Many advanced economies have recently proposed new policies to support CCUS
deployment, including the Infrastructure Investment and Jobs Act and the Inflation
Reduction Act in the United States, the CCUS Investment Tax Credit in Canada,
the Net Zero Industry Act in the European Union, the 2023 Spring Budget in the
United Kingdom, and the CCS Roadmap in Japan. On the other hand, despite
emerging economies having the youngest industrial and power fleets, they are
typically trailing behind on CCUS with only a few countries taking steps towards
deployment. Examples include Indonesia, which has adopted the first CCUS legal
and regulatory framework in Southeast Asia, and a few new operational projects
in China. As first-of-a-kind CCUS hubs are firing up in advanced economies, there
is a need to translate business models and policies for emerging economies.

China Energy Taizhou power plant, CNOOC Enping offshore CCS plant, Jiling Petrochemical CCUS plant
Global Thermostat headquarters plant.
10
The Century plant in Texas, and the original plant and expansion of the Labarge Shute Creek Gas Processing Plant inWyoming.
11
Petrobras Santos Basin pre-salt oilfield EOR project.
12
Gorgon CCS.
8PAGE | 24

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9

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

Operating and planned CO2 capture capacity by region, Q2 2023 vs. 2030
Share of capacity (%)
Operating

2030
0%

20%

40%

North America
China
Australia and New ZealandMiddle East
Eurasia

60%

80%

100%

EuropeOther Asia PacificCentral and South America
AfricaUnknown
IEA. CC BY 4.0.

Note: ‘’Unknown’’ refers to company announcements with no disclosed location.
Source: IEA (2023), CCUS Projects Database.

Development of dedicated CO2 storage accelerates
Over the past year, there has been a large acceleration of dedicated geologicalstorage development. Total planned storage capacity has more than doubled
since January 2022, reaching over 430 Mt CO2/yr by 2030. Generally, thisprovides a positive outlook for CCUS, signalling strengthened market conditions
driven primarily by policy implementation and co-ordinated alignment of the CCUS
value chain by operators.

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A monumental shift from EOR towards dedicated CO2 storage in the near future
is a sign of strengthened action towards net zero commitments. Today, just over
10 Mt CO2/yr of captured CO2 is injected for dedicated storage within ninecommercial-scale sites, but based on the project pipeline, dedicated storage
capacity could increase to over 350 Mt CO2/yr by 2030. The substantial moveaway from EOR (from around 80% of capacity today to little over 10% of capacity
in 2030) towards dedicated storage is driven by a combination of factors, including
the recognition of CCUS in facilitating the transition to net zero (see previous
section Net zero pledges and the role of CCUS) and the dedicated storage
requirements in some policies in order to receive public funding (see Chapter 2).

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

Share of capacity (%)

Operating and planned CO2 storage facilities by type of storage, 2023
100%
80%
60%
40%
20%
0%

OperatingUnspecified storage type

Planned for 2030
CO₂-EOR

Dedicated storage
IEA. CC BY 4.0.

Notes: EOR = enhanced oil recovery. While most of the CO2 injected for EOR is retained in the reservoir over the life of the
project, additional monitoring and verification is required to confirm that the CO2 has been permanently stored.
Source: IEA (2023), CCUS Projects Database.

Increasing options for CO2 transport
There are at least 14 500 km of CO2 pipelines currently under different stages ofdevelopment around the globe, as well as many projects that are yet to disclose
their planned pipeline length. In the United States, in addition to the approximate
9 000 km of operating pipeline that is transporting around 70 Mt of CO2 annually,
three cross-state pipeline projects across the Upper Midwest region had beenplanned to collectively add nearly 6 000 km of new pipeline to the existing
infrastructure network. However, recent rejections of permit applications havecreated setbacks for these projects, and resulted in the cancellation of theHeartland Greenway pipeline (planned to be longer than 2 000 km). In Europe,
multiple cross-border infrastructure projects are being developed to accessstorage resources in the North Sea. In March 2023 Wintershall Dea and Fluxys
jointly proposed a major open-access CO2 transmission network to connect
industrial clusters in Germany to Belgium’s Zeebrugge Port, with capacity totransport 30 Mt CO2/yr. There are also plans for an onshore carbon transit gridthat will serve as a collection point at the Zeebrugge port to facilitate onwards
transport for storage in the North Sea by the offshore Belgium-Norway trunk line
(1 000 km). This joint venture between Equinor and Fluxys will aim to transport 20
to 40 Mt CO2/yr.

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In addition to pipeline development, shipping is also considered to be an
economical option that provides access for first-comer emitters to offshore

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

trunklines. Incremental expansion of multi-user transport networks can be an
attractive approach for project investors when there are demand uncertainties forsuch a service – as is the case for the Northern Lights transport network 13 in
Norway. The project will consist of shipping (initially three dedicated CO2 vessels,
each with a capacity of 7 500 m3, to transport 1.5 Mt CO2/yr) and an offshore
pipeline (100 km with a capacity of 5 Mt CO2/yr).
In early 2023, in Denmark, the pilot phase of Project Greensand pioneered thefirst cross-border CO2 shipment from Belgium to an offshore depleted oil field in
the Danish North Sea for storage. This project – notably facilitated by the first-everbilateral agreement of its kind – highlights a landmark achievement that paves theway for future cross-border CO2 transportation and storage, especially given that
the London Protocol has thus far been posing a significant barrier to transnational
export and storage of CO2.

CCUS dashboards
Following the 2023 Net Zero by 2050 report, the dashboards below present the
major milestones for the main CCUS steps (capture, transport, storage) andtechnologies on the pathway to reach net zero emissions from the global energy
sector by 2050.

Northern Lights is the transport and storage part of the Longship CCS project.

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13

•
•

Capture•••41 capture facilities in operation worldwide capturing around 45 Mt CO2 per year.
7 new plants coming online since January 2022 in China, the United States andEurope.
Around 400 Mt CO2 of capacity planned for 2030.
United States and Europe lead capture developments, but over 10 projects
announced in China, the Middle East and Southeast Asia since January 2022.
Less than 10% of planned capture capacity has reached a final investment
decision.

Deployment by sector
Mt CO2 per year

2023

Deployment by region
2030

Planned

NZE

Mt CO2 per year

2023

2030
Planned

NZE

Power

3

79

233

Advanced economies

32

316

471

Cement015

167

Emerging economies

15

53

553

Other industry

4

20

104

Unknown

0

38

0North America

26

192.5

Natural gas processing

31

70

92

Biofuels

1

28

114

Europe2

105.0

Hydrogen

0

80

161

China

3

14.9

Other

8

46

74

Middle East

4

14.0

DAC

0.01

68

80

Rest of the world

13

80.3

Technology Readiness Level (selected technologies)
Steel Chemicals

DRI

Kiln
(partial)
Kiln(full)

140

Oxy-fuelling

Fluid catalytic
cracker
Membrane

S-DAC
Biodiesel
FT

Solid looping

700
600

300

40

200

20

100

0

0

DilutedRefinery (FCC)

60

Cement400

Gas CCGT

80

Ammonia (full)500

Biofuels

L-DAC

Drying and compression

100

Concentrated

DAC

Corn
ethanol

Cost range

120

Gas processing

USD/t CO₂

Costs depend on:• CO2 concentration in
the gas stream• Number of points ofcapture• Capture technology• Captureefficiency/rate• Energy source andheat integration• Retrofit or new-build• Scale• Impurities in stream.

SMR(partial)

SMR (full)Ammonia(full)

Physical separation

Costs

SMR
(partial)

Ammonia(partial)

Blastfurnace

IGCC
Chemical absorption

Refinery Hydrogen Biofuels

Steel blast furnace

PC

Gas
processing

Power (biomass)

CCGT

Pre-C

CementCoal PC

Biomass
power

Hydrogen (full)

PC

Gas
power

Ammonia (partial)

Coal
power

DAC

Air

Storage••••

More than 390 Mt of new annual CO2 storage capacity announced since January2022.
Total planned storage capacity has more than doubled since January 2022,
reaching around 430 Mt CO2/yr by 2030.
Planned global storage capacity of CO2 for 2030 is currently greater than planned
capture.
CO2 storage projects are shifting away from EOR towards dedicated storage.

Deployment by storage type
Mt CO2 per year

Deployment by region

2030

2023

Planned

NZE
997

Total

45

435

Dedicated

10

355

EOR

35

55

Unspecified/unknown

049

Planned for 2030

Mt CO2 per year

CaptureStorage

North America

190

165

Europe

101

143

China

13

13

Middle East

14

23

Rest of the World

79

91

Technology Readiness Level
TRL

Depletedfields

7-8

Salineaquifers

9

Dissolved CO2
injections

5

Advancedmonitoring
technologies

7-8

Notes
The first injection of CO2 within depleted fields has been completed in 2023 during thepilot phase of Project Greensand in the Danish North Sea.
CO2 injection in saline aquifers has been successfully demonstrated over the past two
decades with many operational large-scale first-of-a-kind projects around the world (e.g.
Sleipner in Norway, Quest in Canada).
Aqueous injections, where CO2 is dissolved in water and injected into mafic igneousrocks, have been demonstrated by Carbfix in Iceland. In Oman, two pilots have been
conducted injecting CO2 dissolved in rainwater into peridotite formations for accelerated
mineralisation and sequestration of CO2.
Advanced monitoring technologies, such as offshore seismic monitoring methods are
currently being demonstrated as part of project Greensand in Denmark. They provide analternative solution for taking seismic surveys more efficiently than traditional methods.

USD/t CO₂

Costs
Offshore

80
60

60

40

40

20

20

0

0

10

20

30

40

50

60

70

- 20
- 40

Onshore

80

80

90

100

0

0

10

20

30

40

50

60

70

80

90

- 20

in % of total storage capacity- 40

Key cost factors include:• Location, which determines accessibility and the unique sitecharacteristics, i.e. the geology• Existing infrastructure (e.g. platforms, wells) that can be used
• Uncertainty in storage-specific regulations• Social acceptance• Contingencies to compensate for uncertainties in flow behaviour.

in % of total storage capacity

Projects

Capacity(Mt CO2/yr)

Sleipner

1

Snøhvit

0.7

Capital cost
(USD million)

Gorgon4180
260 (initial) +275（mitigation)
2240

Quest

1.2

100

Transport

•
•

•

•

Multi-user CCUS hubs are gaining momentum over the world, with around 90
dedicated CO2 transport projects (some including storage) in planning.
North Sea region: around 40 dedicated transport projects in planning, and thepilot phase of Project Greensand pioneered the first cross-border CO2 shipmentin early 2023. Construction is underway for the first CO2-receiving terminal andthree dedicated CO2 ships (Northern Lights project) in Norway, forcommissioning in 2024.
North America: nearly 9 000 km of CO2 pipeline in operation and around 20
projects in planning. New pipeline developments are facing social opposition with
Heartland Greenway recently cancelled following permit rejection.
Asia Pacific: around 20 transport projects in planning, including plans for crossborder shipping between Singapore and Australia, and Japan, Australia andMalaysia.

Deployment

km

2023

Pipelines

9 500

2030
PlannedNZE> 14 500

30 000 – 50 000

Technology Readiness Level (selected technologies)

Pipelines

TRL

Notes

10

CO2 pipelines have been extensively used for EOR, and more recently for dedicated storage,
with around 9 500 km deployed.

Shipping

6-7

Rail

6-7

Low-volume CO2 vessels are operating around the world at median pressure (15 bar) for the
food industry. Three 7 500 m3 and medium pressure ships operating are being built for the
Northern Lights project. Higher volume ships (e.g. 40 000-70 000 m3) operating at lower
pressure (7 bar) are currently at prototype scale.
The Morecambe Net Zero Cluster in the United Kingdom plans to transport CO2 from the Peakcluster via rail.

Costs

Offshore pipelines and shipping(capacity: 2 Mtpa)

20

USD/t CO₂

USD/t CO₂/250 km

Pipelines

15

60

40

10
20

5
0

3 Mtpa1030 3 Mtpa 1030
Mtpa Mtpa
Mtpa Mtpa

OnshoreMedian00Offshore

Offshore pipeline

Range

Pipeline capacity is the leading factor influencing cost.
Costs decrease from USD 9-11/t CO2 for a 3 Mt CO2/yr
pipeline down to USD 2-3/t CO2 for a 30 Mt CO2/yr
pipeline over 250 km distance.
Other factors impacting transport costs include:• Distance• Mode of transport (e.g. pipeline, ship, truck, barge)• Transport condition of CO2• Topology

500
Distance [km]Projects
Quest
Alberta
Carbon TrunkLine

Capacity(Mt CO2/yr)
1.2
Operating:
1.6
Designcapacity: 15

1000

Shipping

Length (km)Unit cost(USD/tCO2/yr)

80

30

240

2

240

21

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

CCUS hubs
CCUS projects in development now increasingly follow a ‘’many-to-many’’
deployment model, where capture projects are developed as part of CCUS hubsthat consist of shared transport and storage infrastructure connecting multiple
emitters (often part of an industrial cluster). There are now at least 110 storage
hubs in development around the world, with plans to sequester around 280 Mt
CO2 per year by 2030, mainly in Europe and North America, with a few examples
starting to emerge in Asia and the Middle East as well.
Selected storage hubs in development by region, 2023
Region/country

Number of storage
hubs in development

Total storage capacity inplanning (Mt)

59
29
12
4
4
1
1
1

Total storage capacityin planning by 2030
(Mt)
107
134
14
8
6
0
9
2

North America
EuropeAustralia and New Zealand
Japan
China
Indonesia
Saudi Arabia
Malaysia
Total

112

279

500

192
219
52
8
16
0
9
2

Source: Analysis based on IEA (2023), CCUS Projects Database.

The CCUS hub model spreads infrastructure costs between emitters andgenerates economies of scale, allowing emitters that are smaller in scale or farther
away from identified CO2 storage sites to still be able to connect to the common
infrastructure. The mainstreaming of this model could also help reduce lead times,
as new capture facilities could connect to an existing CCUS hub in around 3 to 4
years.
Large trunklines with under-used CO2 infrastructure capacity are available andplanned in some regions. Depending on location, this can enable a greater numberof small-scale emitters to consider CO2 capture a feasible option for decarbonising
their operations. Examples of major pipeline networks run by specialist operators
where this may be possible include:
The 240 km Alberta Carbon Trunk Line (ACTL) in Canada, owned and operated
by Wolf Midstream since 2020, transports 1.6 Mt CO2/yr from two industrial
sources for utilisation and permanent storage. With a design capacity of around
15 Mt CO2/yr, ACTL was developed with excess capacity to connect more facilities
in the future. In September 2023, Wolf Midstream announced that a new 40 km
pipeline extension is underway, the "Edmonton Connector", which will expand the
ACTL network into the Edmonton region to enable greater emissions-reduction

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

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

opportunities. This includes an agreement with Air Products to transport CO2 fromtheir new, under construction, Net Zero Hydrogen Energy Complex.

In continental Europe, multiple cross-border infrastructure projects are being
developed to access storage resources in the North Sea. The latest
announcement, from March 2023, includes a major open-access CO2transmission network jointly proposed by, Wintershall Dea and Fluxys to connect
industrial clusters in Germany to Belgium’s Zeebrugge Port.

Despite the numerous advantages of the hubs and clusters model, this approachalso comes with challenges related to the co-ordination of the various steps of thechain and the various players (see Chapter 4). Moreover, a non-negligible shareof dispersed and small-scale applications are unlikely to be within a reasonabledistance of industrial clusters and therefore less likely to benefit from economies
of scale in connecting to the storage hub. Finally, CCUS hubs relying on oversizedtransport and storage infrastructure increase counterparty risk for transport andstorage developers, potentially making it harder for those projects to get financing.

The IEA CCUS Handbook series
Meeting net zero goals will require a rapid scale-up of CCUS globally, from tensof millions of tonnes of CO2 captured today to over a billion of tonnes by 2030. A
small number of countries alone cannot meet this goal, and getting on track witha net zero emissions future will require a truly global effort.
The IEA CCUS Handbook series aims to support the accelerated development
and deployment of CCUS by sharing global good practice and experience. The
handbooks provide a practical resource for policy makers and stakeholders acrossthe energy industry to navigate a range of technical, economic, policy, legal andsocial issues for CCUS implementation.
This handbook aims to provide governments with a policy toolkit to build acommercial market for CCUS. Policies to date have allowed the existing fleet ofprojects to move into operation, but a more holistic view of the challenges facing
CCUS deployment is needed in order to deploy at the pace and scale required in
the NZE Scenario. Overcoming these challenges is entirely possible with the rightpolicy environment and investment from industry.

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Chapter 2 provides a comprehensive list of existing policies to facilitate andpromote CCUS deployment, highlighting country examples across five macrocategories of policies. Chapter 3 outlines emerging business model trends for
CCUS, including how both new and old players are working to split up andspecialise across the CCUS value chain. Chapter 4 identifies the major challenges
to large-scale CCUS deployment, including economic viability, long lead times,
innovation gaps and project complexity. Finally, keeping in mind these emerging

CCUS Policies and Business Models: building a commercial market

Chapter 1: Setting the context

business model trends and overarching challenges to deployment, Chapter 5
presents a policy toolkit to aid governments in establishing an economicallysustainable market for CCUS deployment, in developed as well as emerging
economies.

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This is the third in the IEA CCUS Handbook series and complements thehandbooks on Legal and Regulatory Frameworks for CCUS and on CO2 Storage
Resources and their Development. As such, this handbook does not go into great
detail on the legal and regulatory considerations for enabling CCUS deployment,
nor does it cover the technical and process matters associated with developing
CO2 storage. We refer those interested in these topics to the other handbooks.

CCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

Chapter 2: Policy trends
Overview
Initial deployment and scale-up of energy technologies generally requires somelevel of risk-sharing between the public and private sectors to get first projects off
the ground and eventually create an economically sustainable and viable market.
Successful policy frameworks for energy technologies have typically relied on
multiple, sustained layers of support that work by sharing risks between the public
and private sectors and increasing the value proposition of the technology.
Governments around the world have taken different approaches to supporting
carbon capture, utilisation and storage (CCUS) projects. Some have taken a broad
approach that is not focused on a particular project, while others haveconcentrated incentives on a few selected projects.
As a start, including CCUS in climate and energy policies can send a clear signal
to investors and project developers on the importance and strategic value ofCCUS. From there onwards, governments have a range of policy mechanisms
available to support the deployment of projects. These can be broadly classified
into five general categories: enabling legislation and rules, cost reduction
measures, regulation of industrial activities, strategic signalling and revenue
support. Every country with an operating CCUS project has at least one of thesepolicy mechanisms currently in place, and countries with a healthy project pipeline
tend to have multiple mechanisms in place or in planning.
While the latter four mechanisms focus on promoting and encouraging CCUS
deployment, the first (enabling legislation and rules) facilitates by creating theenabling conditions necessary for CCUS activities.

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These policy mechanisms generally apply to projects within a country’s borders,
especially if public funds are used. For example, public funding to reduce the costof CCUS typically requires the funding recipient to be located within that country.
However, there can be exceptions to this in some countries if part of the CCUS
project’s value chain is linked to the funding country. For example, in June 2023
the Japan Organization for Metals and Energy Security (JOGMEC) selected seven
CCUS projects to support financially, two of which would transport CO2 that is
captured in Japan to other countries for storage. Other examples include theEuropean Union’s Innovation Fund and Connecting Europe Facility. The types ofpolicy mechanisms that more commonly include international aspects are
regulation of industrial activities, which can include carbon pricing programmes

CCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

that extend beyond a country’s borders, and enabling legislation and rules, which
can have specifications for the cross-border transport and storage of CO2.
There is no one-size-fits-all solution when it comes to policy-making for CCUS,
but projects tend to have the most success when countries put in place multiple
layers of policy support.
Current policy mechanisms for CCUS
Category
Enabling legislation
and rules

Types and Description
This mechanism facilitates and provides a platform for CCUS deployment. Legaland regulatory frameworks set a legal basis for CCUS activities and ensure
the safe and secure storage of CO2. Nearly every operating CCUS project has
benefited from the establishment of a legal and regulatory framework.
Government support can reduce the capital and/or operating costs of CCUS
projects. This is a common mechanism that has been applied to many operating
projects to date.
Grants are a common financing mechanism that have been used by the
majority of CCUS projects to date and can help fund expensive activities suchas feasibility or Front-End Engineering and Design (FEED) studies. Grant
funding can also drive advances in R&D and innovation.

Cost reduction
measures

Governments can also provide loan support, such as through preferential
interest rates, access to debt capital and loan guarantees.
Tax credits can reduce costs by allowing projects to recover capital or operating
costs associated with investment in qualified equipment or per tonne of CO2
stored.

Regulation ofindustrial activities

Strategic signalling

Revenue support

For some countries, partially or fully state-owned enterprises (SOEs) havebeen directly involved in CCUS projects. This can indirectly reduce costs by
allowing the public sector to manage more of the investment risks.
Putting a price on CO2 can incentivise emitters to invest in technologies toreduce emissions. This can be in the form of a carbon tax or through carbon
markets, such as an emissions trading scheme, where facilities are penalisedfor emitting CO2 or other GHGs, encouraging investment in emissions-reduction
technologies.
Governments can send strategic signals that work to incentivise long-term
investment in CCUS projects. For example, deployment targets that outline acertain level of desired CCUS capacity can communicate a government’s clear
intention.
Newer policy mechanisms that seek to provide a predictable revenue stream for
CCUS projects are being considered, such as (carbon) contracts-fordifference and the regulated asset base model. While these mechanisms
have been used for other clean energy technologies, they are now being tested
in some countries for CCUS.

Source: For more information on policies and measures to support CCUS please visit the IEA Policies and Measures(PAMS) database.

Existing CCUS policies
In total, around 15 countries have CCUS policies on the books that go beyond
R&D initiatives. A roughly equal number of countries have CCUS projects inoperation.

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Two policy mechanisms in particular have commonly supported CCUS projects inoperation: enabling legislation and rules and cost reduction measures. In

CCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

advanced economies, enabling legislation and rules (through the establishment oflegal and regulatory frameworks for CCUS) have provided the necessary platform
for the first projects storing CO2 at dedicated sites. In addition, cost reduction
measures in some countries, such as one-off grants to specific projects and tax
credits for the storage or use of CO2, have moved projects to a point where they
could start operation. In emerging markets and developing economies (EMDEs),
as well as some advanced economies, cost reduction measures have been seen
through state-owned enterprises (SOEs) that offload investment risks from theprivate sector.
This has had a noticeable impact on the types of applications where CCUS is
deployed. As shown in Chapter 1, most of the installed CO2 capture capacity (twothirds) is associated with natural gas processing, one of the lowest-cost CO2
capture applications. This is, in part, a function of the types of policy mechanismsthat governments have employed over the years: enabling legislation and rules
and certain cost reduction measures incentivise the “low-hanging fruit” (i.e. thelowest-cost applications) first. As a result, the gap in deployed projects isparticularly pronounced for higher-cost applications such as power generation andindustry (see the Capture dashboard).
At the same time, governments have also implemented regulations on industrial
activities to promote emissions-reduction technologies – commonly throughcarbon pricing programmes. However, in practice these programmes have shownthat carbon pricing on its own (if too low and too volatile) is not enough toincentivise CCUS deployment.
Deployment of CCUS beyond low-cost applications requires several, if not all,types of policy mechanisms. Experience has shown that enabling frameworks andcost reduction policies are the minimum needed to get projects off the ground, but
a global scale-up of CCUS at the rate required in the Net Zero Emissions by 2050
Scenario (NZE Scenario) requires policies to support revenue, strategic targets tosignal long-term commitment and regulation of industrial activities to drive market
demand.

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Moving forward, the CCUS project pipeline shows a greater diversity in CO2
capture applications as well as a greater geographic distribution of projects. Thispartially reflects government action to propose policies that fit across all
categories. In fact, for countries with CCUS projects in the pipeline but no projects
currently in operation, policies tend to span multiple mechanisms.

CCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

Existing CCUS policy mechanisms by country
Operational
and planned
capturecapacity (Mtpa)
21 (operation)
140 (planned)
8.7 (operation)
0.4 (planned)
4 (operation)
11 (planned)
4.1 (operation)
27 (planned)
3 (operation)
12 (planned)
2.1 (operation)
2.9 (planned)
1.7 (operation)
2.8 (planned)
0.8 (operation)
0.8 (operation)
7.4 (planned)
0.2 (operation)

Enabling
legislation
and rules

Cost
reductionmeasuresX

X

57 (planned)

X

X

X

X

14 (planned)

X

X

X

X

Indonesia

10 (planned)

X

X

X

France4.7 (planned)

X

X

X

X

Denmark

1.8 (planned)

X

X

X

X

Country
United States
BrazilAustralia
CanadaChina
Qatar
NorwaySaudi Arabia
United ArabEmiratesJapan
UnitedKingdom
Netherlands

Regulationof industrial
activities

Strategic
signalling

Revenuesupport

X
X

X

X

X

X

X

X

X

X

X
X

X

X

X
X
X

X
X

Notes: Planned capture capacity only includes projects with an announced timeline before 2030 and clearly identified
facilities. Countries in grey do not have any operating CCUS projects at the time of publication. Countries that only fund
CCUS R&D are not included. The United States does not have a carbon pricing programme at the national level, but there
are various carbon pricing programmes at the state level. Countries in the European Union are eligible for EU cost
reduction programmes and are required to implement the European Union’s carbon pricing and regulatory framework – assuch only countries with support mechanisms in addition to those of the European Union are included. Australia previously
provided cost reduction support to CCUS projects, though this funding programme has since been cancelled and replaced
by a smaller programme to support emerging CO2 capture and utilisation in sectors where emissions are hard to abate.

Enabling legislation and rules
Enabling legislation and rules provide a supportive environment for CCUS and act
as a platform to build from. This policy mechanism facilitates CCUS deployment,
rather than promotes. It often involves the establishment of legal and regulatory
frameworks for CCUS that provide a legal basis for the effective stewardship of
CCUS activities and the safe and secure storage of CO2.

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Several countries have already developed comprehensive legal and regulatory
frameworks for CCUS. These form a valuable knowledge base for the growing
number of countries that have identified a role for CCUS in meeting their climate
goals, but which are yet to establish a legal foundation for CCUS, and particularly
for CO2 storage. Over 20 jurisdictions (subnational, national or regional) have legal
and regulatory frameworks in place for CCUS projects. Indonesia is one of themost recent countries to put a legal framework in place for CO2 storage, and Brazil
is working to finalise its first framework for dedicated CO2 storage.

CCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

Legal and regulatory frameworks of selected countries
Country
European
Union

CanadaUnited States

PolicyThe CCS Directive establishes the legal framework in the European Union for geologicalstorage of CO2. The state assumes responsibility of the CO2 storage site following aminimum 20-year period from the closure of the site, and only after the storage operator
provides evidence indicating that the stored CO2 will be completely and permanently
contained, and that there has been a financial transfer which covers monitoring costs forapproximately 20 years.
Canada does not have a comprehensive regulatory framework for CO2 storage infederal jurisdictions, but the provinces of Alberta, British Columbia and Saskatchewan
have frameworks in place to support safe and secure geological CO2 storage. Other
provinces, such as Manitoba, Ontario and Nova Scotia, are taking steps towards
developing enabling frameworks for CO2 storage.
The legal framework for CO2 storage in the United States is based in the country’s
underground drinking water legislation, and only applies to pore space that is privately
owned or under state jurisdiction; there is no legal framework for CO2 storage in federal
jurisdiction (onshore and offshore). As such, there is no transfer of liability at the federal
level, though operators are required to monitor the CO2 storage site for up to 50 years
after its closure.
Several states have their own legal frameworks for CCUS on top of the federal
requirements. This includes Indiana, Kansas, Louisiana, Montana, Nebraska, New
Mexico, North Dakota, Texas and Wyoming. Out of the nine states with a framework, six
have provisions for the transfer of site ownership or liability to the government after the
storage site is closed.

Australia

In Australia, the legal framework for CO2 storage only applies to offshore areas within
the federal government’s jurisdiction, while states and territories have their own legal
frameworks for onshore and offshore storage. Queensland, South Australia and Victoria
have comprehensive CCUS frameworks in place, while Western Australia has specificlegislation to enable the Gorgon project.

UnitedKingdom

The United Kingdom’s legal framework follows the European Union’s CCS Directive,
including the transfer of responsibility to the government after a 20-year period following
the closure of the CO2 storage site.

Japan

Japan currently does not have a legal framework for CO2 storage, however it is in theprocess of designing legislation to enable the country to start storing CO2 by 2030.

Indonesia

Indonesia’s framework is based in its upstream oil and gas regulation. Holders of oil andgas leases are allowed to store CO2 within existing leasing areas, such as in depleted oil
and gas fields. The framework allows for the capture of CO2 outside of the oil and gas
industry, but the CO2 must ultimately be stored in a lease area. In addition to thetechnical and legal requirements needed to ensure safe and secure CO2 storage, theframework also outlines several business and economic aspects. For example, theframework outlines potential pathways to monetising carbon credits for the project andits partners. In addition, the framework outlines conditions under which storage
operators may grant third-party access to storage facilities.

Source: IEA (2022), CCUS Legal and Regulatory Database.

Cost reduction measures

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Energy projects tend to be capital-intensive and to involve large amounts of upfront investment. To reduce these costs, governments can provide grants, loans
and tax credits. Cost reduction measures such as these are the most common
policy mechanism employed by governments and can cut across several different
policy programmes in a given country. Another cost reduction measure thatgovernments can take is through the involvement of SOEs. By including SOEs in
CCUS projects, costs are indirectly reduced by shifting some of the investment
risk associated with the project to the public sector.

CCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

Grants are a direct financial contribution that can either be provided specificallyto targeted projects or through competitive programmes. While grants can covervarious upfront costs of CCUS projects, such as construction costs, several
countries have targeted grant funding for feasibility and Front-End Engineeringand Design (FEED) studies. A FEED study is a comprehensive (and often costly)
effort that requires significant engineering and design work to inform whether or
not a project moves forward. Grants have also been used to fund geologicalstorage atlases to identify potential CO2 storage resources.
Governments can also provide loan support to projects for which the commercial
lending sector might not be as active. This can be an effective policy tool for clean
energy technologies such as CCUS that have difficulty accessing debt from private
lenders. This can be in the form of providing debt capital (i.e. a direct loan) withpreferential rates or via loan guarantees (whereby the government promises topurchase the debt from the private lending institution and take on responsibility forthe loan in the event that the borrower defaults).
Tax credits are a common policy mechanism to promote specific behaviours or
encourage the adoption of certain practices, technologies or equipment. A tax
credit allows an individual or company to subtract an amount of money directlyfrom the taxes that they owe (i.e. their tax liability). For example, an investment
tax credit allows the company to subtract a certain percentage of its investment
costs in a project from its tax liability. Well-designed tax credits can allow for thetransfer of the credit to other project partners (for instance, if the company
receiving the credit does not have a high enough tax liability it may be eligible topass the credit to an investor in exchange for financing). Further, refundable
investment tax credits for CCUS projects can be paid to the taxpayer as a refundin situations where the credit exceeds the taxpayer’s liability or in the absence ofany tax liability. This is expected to benefit earlier stage companies that do not yet
have the taxable income to benefit from a non-refundable investment tax credit.
Canada is now finalising the details of its investment tax credit for CCUS, which
was first proposed in 2021. In 2023, Malaysia proposed an investment tax credit
for CCUS. In addition to covering capital expenditures, tax credits can also cover
operating expenses, or – in the case of CCUS projects – provide a credit amountfor the amount of CO2 stored on a per tonne basis. Currently this form of tax credit
for CCUS projects is only available in the United States.

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In the Netherlands, the Stimulation of sustainable energy production and climatetransition (SDE++) subsidy scheme provides subsidies for qualifying clean energy
technologies. For CCUS projects, the subsidy is awarded to the capture project
over a 15-year period and bridges the cost gap between production with CCUS
and without CCUS, linked to the carbon price under the EU emissions trading
system (ETS). Under the SDE++ the project operator is not required to pay thegovernment back should the EU ETS price go above the operator’s production

CCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

costs – in this case, the project would no longer require public funding as the
carbon price would be enough to cover the project’s costs. Under the scheme,
four emitters associated with the Porthos projects were selected to receive up to
EUR 2.1 billion (USD 2.5 billion), and eight emitters associated with the Aramis
project were selected to receive up to EUR 6.7 billion (USD 7 billion).
Cost reduction policies
Country

PolicyThe Innovation Fund provides regular grants that support up to 60% of a low-carbon
technology project’s costs, with up to 40% of the grant available to projects before
operation, provided certain milestones are met. The Fund has issued three funding calls
each for large-scale (capital costs above EUR 7.5 million [USD 8.2 billion]) and small-scale
projects, awarding over EUR 1.7 billion (USD 1.9 billion) to 15 projects with a CCUS
component since 2020. The third large-scale funding call selected seven CCUS projects,
though the exact funding amount for each has yet to be announced. Norway and Iceland
are also eligible under this fund.

EuropeanUnion

The Connecting Europe Facility (CEF) awards grants to cross-border energy, transportand digital infrastructure projects that connect two or more member states. CO2 transportand storage infrastructure (including pipelines, storage facilities linked to cross-bordertransport of CO2, and fixed facilities for liquefaction and buffer storage) are eligible forfunding. Early CEF funding for CCUS projects focused on feasibility studies, with more
recent funding allocated to FEED studies and infrastructure development. In total, nearly
EUR 300 million (USD 334 million) has been allocated to CCUS projects since 2020, withthe largest amount of funding given to the Antwerp@C CO2 Export Hub project(EUR 145 million [USD 152 million]) and the Porthos project (EUR 102 million[USD 117 million]).

Grant
Tax credit
Loan

The Recovery and Resilience Facility is the European Union’s stimulus package in
response to the COVID-19 pandemic, and provides over EUR 700 billion (USD 828 billion)
to member states in the form of grants and loan support. CCUS projects are eligible for
grants under seven member state plans approved by the European Commission.
The Infrastructure Investment and Jobs Act (IIJA) provides approximately USD 12 billion
for CCUS through 2026. This includes USD 937 million for large-scale CO2 capture pilot
projects, USD 2.5 billion for CO2 capture demonstration projects, USD 2.5 billion for largescale CO2 storage projects and associated transport infrastructure, USD 75 million for CO2
storage permitting, and USD 3.5 billion for regional direct air capture (DAC) hubs. The
funding under the IIJA for CCUS is mainly in the form of cost-shared grants.

Grant
Tax credit
Loan

The IIJA also establishes the USD 2.1 billion CO2 Transportation Infrastructure Financeand Innovation Act (CIFIA) programme, which will provide loans, loan guarantees andgrants to large-capacity CO2 transportation projects. Projects must be common carrier,
meaning access to the transportation infrastructure is shared, and non-discriminatory
under a publicly available tariff, and have project costs over USD 100 million.
The United States provides loans and loan guarantees through its Loan Programs Office(LPO) for clean energy and energy infrastructure projects, including CCUS. Eligible
projects can receive favourable interest rates, set at the US Treasury rate, plus a liquidity
spread and risk-based charge. Although no CCUS projects have received LPO loan
support to date, projects across the value chain (including point-source carbon capture,transport, utilisation, and storage, and atmospheric carbon dioxide removal) are eligible.

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UnitedStatesThe 45Q tax credit provides projects with a credit of up to USD 85/t CO2 permanently
stored and USD 60/t CO2 used or through EOR, provided emissions reductions can beclearly demonstrated. The credit amount significantly increases for DAC projects to
USD 180/t CO2 permanently stored and USD 130/t CO2 for CO2 use. There is a direct pay
and transferability option for developers who receive the credit, meaning that the developer
can monetise the credit or transfer it to project partners or investors with a large enoughtax liability.

CCUS Policies and Business Models: building a commercial market

Country

Chapter 2: Policy trends

PolicyThe refundable Investment Tax Credit (ITC) is available to CCUS projects thatpermanently store CO2 with eligible capital expenses at the following rates: DAC
equipment (60%), equipment to capture CO2 in all other CCUS projects (50%), andtransportation, storage and use equipment (37.5%) from 2022-2030. These rates will be
reduced by 50% for the period from 2031 through 2040 to encourage industry to movequickly. The government will also undertake a review of ITC rates before 2030 to ensurethat the proposed reduction in rates aligns with the government’s environmental objectives.
The Energy Innovation Program is delivering CAD 319 million (Canadian dollars) (USD
245 million) in funding over 7 years to CCUS RD&D projects, including up to CAD 50
million (USD 38 million) in funding specifically for nine selected CCUS FEED studies.

CanadaGrant
Tax credit
Loan

The CAD 15 billion (USD 12 billion) Canada Growth Fund is a new arm’s length public
investment vehicle designed to attract private capital for clean technology anddecarbonisation projects, including CCUS. When established, it will have at least four
distinct investment offerings for projects: concessional equity or debt, contracts-fordifference, anchor equity and offtake contracts.
The Canada Infrastructure Bank invests in CCUS infrastructure projects, including throughits Project Acceleration funding for FEED capital expenditures.
The Net Zero Accelerator initiative is providing up to CAD 8 billion (USD 6.5 billion) over 7
years to support large-scale investments in clean technologies, including CCUS. The
Strategic Innovation Fund under this initiative includes funding for CCUS deployment
projects.
At the provincial level, Alberta’s Carbon Capture and Storage Fund is providing CAD 1.24
billion (USD 95 million) in grant funding for up to 15 years to the Quest and Alberta Carbon
Trunk Line (ACTL) projects. Up to 40% of the funds were allocated before operation,
provided certain milestones were met, another 20% of the funds were allocated uponcommencement of operations, and the final 40% will be disbursed during operation for up
to 10 years. Additionally, Emissions Reduction Alberta has invested over CAD 160 million(USD 123 million) in CCUS projects, which includes grant funding for pre-construction
studies, while the Industrial Energy Efficiency and CCUS Program provides grants thatcover up to 75% of project costs (up to a CAD 20 million [USD 15 million] maximum) – with
CAD 40 million (USD 30 million) to date related to CCUS projects.

Grant
Tax credit
Loan

Australia
Grant
Tax credit
Loan

The Spring Budget 2023 is providing up to GBP 20 billion (USD 24 billion) for CCUS
projects under its cluster sequencing process.
The Industrial Energy Transformation Fund provides grant funding for feasibility and FEED
studies of clean energy technologies, including CCUS. The Fund has announced threephases and to date has issued over GBP 400 000 (USD 500 000) in grant funding to
CCUS projects.
The Industrial Decarbonisation Challenge provides grant funding for feasibility and FEED
studies of CCUS and hydrogen industrial clusters from 2019 through 2024. The Challenge
has issued over GBP 170 million (USD 234 million) in funding to six large industrial
clusters.
The Carbon Capture Technologies Program provides grants up to AUD 15 million(Australian dollars) (USD 10 million) for RD&D projects that focus on emerging CO2
capture technologies, DAC, bioenergy with CCS and CO2 utilisation technologies, among
other areas.
The Low Emissions Technology Demonstration Fund, now closed, provided funding todemonstrate low-emissions technologies. Chevron’s Gorgon project received AUD 60
million (USD 42 million) in funding under this fund.

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UnitedKingdom

The Carbon Capture and Storage Infrastructure Fund supports the capital costs ofstrategic CCUS infrastructure through the identification of key clusters. The GBP 1 billion(USD 1.3 billion) fund provides grant funding to CO2 transport and storage networks andearly industrial carbon capture projects. Grants for industrial carbon capture projects arecapped at up to 50% of total capital costs and are not to be used for pre-FEED and FEED
costs.

CCUS Policies and Business Models: building a commercial market

Country
Denmark
Grant
Tax credit
Loan

Japan
Grant
Tax credit
Loan

Chapter 2: Policy trends

PolicyThe Energy Technology Development and Demonstration Program (EUDP) provides
grants to clean energy projects up to Technology Readiness Level (TRL) 8. The EUDP has
funded Project Greensand with DKK 197 million (Danish kroner) (USD 31 million) and
Project Bifrost with DKK 75 million (USD 12 million).
In August 2023, the Danish government proposed a plan to merge two funding pools into
two tenders totalling EUR 3.6 billion. Approximately EUR 1.4 billion (USD 1.5 billion) will beallocated to the first tender, which aims to result in 0.9 Mt of stored CO2, and EUR 2.2
billion (USD 2.3 billion) will be allocated to the second tender, which aims to result in 1.4
Mt CO2 stored. The funding will be allocated over a 15-year period, with projects starting in
2029.
JOGMEC provides financial and technical support to CCUS projects in the form of equity
investments, loan guarantees and funding for feasibility studies and storage resource
assessments. In June 2023, under its Advanced CCS Projects scheme, JOGMEC selected
seven projects to receive funding to reduce project capital costs. Although the exact
funding amount for each project has yet to be determined, Japan has allocated an initial
USD 25 million to support these projects.

Notes: Programmes that only focus on R&D are excluded from this table; Technology Readiness Levels (TRLs) are used tomeasure progress in the development (TRL1-9) and deployment (TRL 9-11) of a particular technology, from concept tomarket-wide adoption.

In some cases, governments have used their SOE system to deploy or becomeheavily involved in CCUS projects. This has been a common route in several
countries where SOEs already own a significant number of energy and related
infrastructure projects, such as in the Middle East and China. Currently, around adozen projects in operation are owned and operated by an SOE. In China, SOEs
Sinopec, PetroChina, CHN Energy and CNOOC own and operate nearly every
operating project in the country, with the exception of the Karamay methanol plant
operated by the private Dunhua Oil Company. Likewise, in the Middle East, SOEs
Saudi Aramco, Qatar Energy (with ExxonMobil) and ADNOC dominate theregional CCUS projects in operation.
In addition to China and the Middle East, Norway has relied heavily on its SOE
ecosystem to develop and deploy CCUS projects. For example, the Norwegian
Government is the majority shareholder in Equinor, which has nearly three
decades of experience operating commercial CCUS projects (e.g. the Sleipner
project commissioned in 1996 and the Snøhvit project commissioned in 2008). In
addition to Equinor, the Norwegian Government established Gassnova in 2005 as
the SOE dedicated to developing CCUS technologies through administrating a
research and financing programme and serving as the key government adviser on
CCUS. Falling under the Norwegian Ministry of Petroleum and Energy, Gassnova
was closely involved in the early planning of the Longship CCS project, producing
early phase studies and acting as a project integrator.
State-owned enterprises involved in CCUS
SOEs
Sinopec, PetroChina, CHN Energy and CNOOC
Saudi Aramco
Qatar Energy
ADNOC
Gassnova

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Country
China
Saudi Arabia
Qatar
United Arab Emirates
NorwayCCUS Policies and Business Models: building a commercial market

CountryJapan
Netherlands
BrazilIndonesia
ThailandIndia
Malaysia
Timor-Leste

Chapter 2: Policy trends

SOEs
JOGMEC
Energie Beheer Nederland (EBN) and Gasunie
Petrobras
Pertamina
PTT Exploration and Production
Indian Oil Corporation
Petronas
TIMOR GAP

Regulation of industrial activities
Governments can also promote CCUS deployment through the regulation ofindustrial activities that seek to reduce emissions from one or multiple sectors.
Carbon pricing has been one option within broader climate and energy policy to
reduce emissions and help foster clean energy transitions. It can influence theeconomic choices of investors and technology developers by encouraging
emitters to invest in technologies to reduce emissions or face a penalty.
Confidence in rising future carbon prices can be a strong driver for investment inclean energy technologies and their RD&D, but low and volatile carbon prices are
not enough to drive long-term investment. Indeed, carbon pricing alone has notbeen enough to incentivise CCUS projects. The notable exception is in Norway,
where the country’s carbon tax played an important role in the development of the
Sleipner CCS project.
There are two general approaches to putting a price on carbon: a carbon tax andcarbon markets. Under a carbon tax, the government sets a price per tonne of
CO2 that emitters must pay. The tax can increase over time, providing a signal toemitters that they will need to invest in technologies that are able to provide
substantial emissions reductions. This provides a greater level of certainty about
future prices, but governments have less control over the actual level of emissions
reduction.

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Carbon markets can be further divided into emissions trading systems (ETS)
and carbon crediting. In an ETS, the government typically sets an emissions cap
and allocates a certain number of per-tonne allowances to emitters that is
consistent with that cap. Emitters covered under the ETS may buy and sellallowances – those that reduce their emissions can sell excess allowances toemitters that are unable to do so. The government lowers the cap over time, sothat total emissions fall. In contrast to a carbon tax, an ETS allows the market todetermine the price on carbon. It provides a greater level of certainty about future
emissions, but not necessarily about the price of those emissions. Of the ETSCCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

currently in force, only five have regulations specific to CCUS: those of California,
the European Union, New Zealand, Quebec and the United Kingdom. 14
Each approach can vary in coverage (such as economy-wide or sector-specific)
as well as scope (CO2 emissions or other GHGs). As of September 2023, over 70
jurisdictions (subnational, national or regional) have a carbon pricing system inplace, roughly equally split between a carbon tax programme and an ETS. In total
these carbon pricing systems cover around one-quarter of global GHG emissions.
Other countries, such as China, India and Japan, have recently implemented (orwill soon implement) a carbon pricing system.
Regardless of the approach, the revenues from a carbon pricing system could be
used to fund or finance climate activities (as is the case for the European Union’s
Innovation Fund) or supportive measures that can offset the cost burden for themost vulnerable consumers and firms.
In addition to carbon pricing, researchers have recently suggested adoption of a“polluter pays” principle, whereby CO2 storage obligations would be placed on
fossil fuel suppliers. Known as a carbon takeback obligation, fossil fuel producers
and importers would be required to store a percentage of the CO2 generated by
the fuels they sell, and this obligation would increase progressively over time.
Carbon pricing policies of selected jurisdictions
Country

European
Union
ETS
Carbon tax

NorwayETS
Carbon tax

According to the EU legal framework, CO2 that is captured and safely stored isconsidered as “not emitted” under the ETS. Since 2015, capture, transport and storage
installations have been explicitly included in the ETS.
Norway was one of the first countries to introduce a CO₂ tax. The tax covers 63% of
Norway’s GHG emissions and applies to CO2 emissions from combustion of all liquidand gaseous fossil fuels and incineration of waste, CO2 and CH4 fugitive emissions, andemissions of hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs). Operators
covered by the EU ETS are exempt from the carbon tax, except for in offshore oil
production activities, domestic aviation and waste incineration (though Norway has its
own waste incineration tax). The Norwegian carbon tax was one of the primary drivers
behind the Sleipner CCS project, which has been operating since 1996.

In the case of New Zealand and California, the ETS does not interact directly with CCUS applications.

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14

PolicyThe EU ETS is the oldest and largest ETS (in revenue terms) operating worldwide andapplies to all EU countries as well as Iceland, Liechtenstein and Norway. The ETS
covers around 38% of EU GHG emissions and applies to emissions from activities in the
power sector, manufacturing industry, and intra-EU aviation. In 2023, the European
Union adopted reforms to the ETS, which includes a more ambitious reduction target for
the EU ETS sectors of 62% by 2030; the phase-out of free allocation in some sectors
accompanied by the phase-in of the Carbon Border Adjustment Mechanism (CBAM);
revised parameters for the Market Stability Reserve; the expansion of the EU ETS tocover maritime shipping; a new and separate ETS for buildings, road transport, andadditional sectors; and a strengthened commitment to use ETS revenues to address
distributional effects and spur innovation.

CCUS Policies and Business Models: building a commercial market

Country

CanadaETS
Carbon tax

Australia
ETS
Carbon tax

UnitedKingdom
ETS
Carbon tax

Chapter 2: Policy trends

PolicyCanada requires all provinces and territories to have a carbon pricing system in placethat is at least as stringent as the federal carbon pricing system. A federal carbon pricing
backstop mechanism is put in place for provinces or territories that do not have a carbon
pricing system, or whose system is not aligned with the federal benchmark criteria. The
federal mechanism covers 82% of Canada’s GHG emissions and consists of two
components: a regulatory charge on fuels and an output-based carbon pricing system(OBPS) for industrial facilities greater than 50 000 t CO2 per year.
The OBPS, which is similar to an ETS, incentivises CCUS by recognising CO2 storage
in deep saline aquifers and depleted oil reservoirs, while provinces that have their own
carbon pricing systems also provide CCUS incentives. For example, Alberta’s amended
Technology Innovation and Emissions Reduction (TIER) Regulation provides increasing
CCUS support through new credit classes in addition to CCUS investments by the TIER
Fund – a fund generated by large-emitter compliance obligation payments.
There is no cap on emissions under the federal system; instead there is an emissionsintensity or output-based standard by sector. Importantly, the carbon price is set tosteadily increase to CAD 170 (USD 130) per tonne of CO2 equivalent (t CO2-e) by 2030.
The Safeguard Mechanism assigns emissions baselines for over 200 large facilities. The
Mechanism covers GHG emissions from facilities emitting over 100 000 t CO2-e/yr inelectricity, mining, oil and gas production, manufacturing, transport and waste. Facilities
that emit above their baseline must offset the excess emissions. CCUS-equippedfacilities that emit below their baseline can earn credits which can be traded with othercovered facilities that exceed their baseline.
The UK ETS incorporates several elements of the EU ETS, following the United
Kingdom’s departure from the European Union. It covers 28% of the United Kingdom’s
emissions and applies to emissions of CO2, nitrous oxide (N2O), and PFCs in energyintensive industries, the power sector, and aviation within the United Kingdom andEuropean Economic Area. A number of allowances are allocated for free to industrial
participants at risk of carbon leakage. The UK ETS will be extended to cover more
sectors – domestic maritime transport from 2026 and waste from 2028 – while rolling out
a phased removal of free carbon allowances for the aviation industry in 2026.

Note: EU member states may have carbon pricing policies in addition to the EU ETS. For example, the Netherlands has acarbon tax that applies to industry and is levied for emissions above a certain threshold, which will be reduced annually
through at least 2030, in line with Climate Agreement targets. Unlike a traditional ETS, Canada’s federal OBPS does nothave a cap on emissions; instead there is an emissions-intensity or output-based standard. At the provincial level, several
Canadian provinces and territories use a carbon tax system.
Sources: World Bank (2023), Carbon Pricing Dashboard and the International Carbon Action Partnership.

Strategic signallingSome policies can highlight strategic areas of interest for governments. Signallingthese strategic areas shows the government’s long-term commitment and canwork to attract investment from the private sector.
One example is a deployment target. This has been a common tool thatgovernments use for renewables, for instance setting a goal of reaching a certain
deployment capacity or percentage of total generation. For CCUS, this tool is now
being used by countries to signal long-term interest in deployment, often
expressed in terms of the amount of CO2 stored within a country by a certain date.
In general, two types of deployment targets have emerged for CCUS: a specifictarget (which can be achieved through a combination of policy measures) and acertain level of deployment as the result of a policy. For example:
The European Union’s Net Zero Industry Act proposes to set an EU-wide goal toachieve a CO2 injection capacity of at least 50 Mt by 2030. Oil and gas producers

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

CCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

have been asked to contribute to the 50 Mt target, calculated pro-rata based oneach entity’s share in the European Union's crude oil and natural gas production
between 2020 and 2023.

The United Kingdom has a goal to capture and store between 20-30 Mt CO2 peryear by 2030 and over 50 Mt CO2 per year by 2035.

Japan set a CO2 storage target of 6-12 Mt CO2 per year by 2030 and 120-140 Mt
CO2 per year by 2050 under its long-term CCS roadmap.

Canada released its Carbon Management Strategy, which, among other things,
projects that at least 16 Mt CO2 could be stored each year by 2030 based on
existing policies and assumptions regarding the timing of project investment
decisions, approvals and construction.

Revenue support
Newer policies to provide revenue support for projects are being considered forCCUS. While these policies have not yet contributed to any operating CCUS
projects, they are expected to incentivise greater deployment once finalised. Suchpolicies include a regulated asset base and contracts-for-difference, both ofwhich are expanded upon in Chapter 5.
Governments have used a regulated asset base model in the past for various
infrastructure-heavy sectors, such as for the transmission and distribution ofelectricity and the build-out of nuclear power plants, where the private market
alone was not enough to attract the needed investment. The basic idea is that a
private company can own and operate an infrastructure asset, charging fees tothose that use the infrastructure to recoup investment costs. But in order to preventmonopolistic behaviour, the government can put in economic guardrails that cancap prices, revenue or rates of return. No country has implemented this model for
CCUS projects yet, though the United Kingdom is working to incorporate it for CO2transport and storage.

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Governments are also considering using a contracts-for-difference (CfD) or
carbon contracts-for-difference (CCfD) scheme to indirectly increase a CCUS
project’s revenue. Originating in the financial services sector, a CfD was initiallyused as a hedging strategy to offset the risk of a financial loss on the stock market.
While the concept originated in the financial sector, the core concept has been
adopted for large-scale clean energy projects to provide stable prices over a longtime period. Under a CfD or CCfD, the government and contracting parties agree
on a “strike price” with the project operator (either via bilateral negotiations orcompetitive processes). If the market price of that commodity differs from theagreed strike price, then either the government or the project will need to cover
the differences. For CCUS projects, the strike price is a specific amount per tonneof CO2 and the market price is usually the price of electricity (for a CfD) or the priceof carbon (for a CCfD). If the market price is below the strike price, then the

CCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

government pays the project the difference between the actual market price andthe strike price. In the case of a two-sided CCfD, if the market price is above thestrike price, then the project pays the government for the excess.
The United Kingdom has been one of the leaders in deploying a CfD scheme forrenewables in the power sector and is now adopting the CCfD mechanism to drive
industrial carbon capture deployment and low-emissions hydrogen deployment.
The European Union has proposed using a form of CfD or CCfD for the allocationof an expanded Innovation Fund from 2022, and both France and Germany havealso announced a CCfD scheme. Denmark has indicated that a similar model will
be used for a forthcoming subsidy scheme and Canada announced that the
government would consult on the development of a broad CCfD approach.

CCUS policy gaps
While certain existing CCUS policies, such as those falling under the categories
of enabling legislation and rules and cost reduction measures, have enabled thecurrent fleet of CCUS projects, several remaining gaps in the policy landscape aremaking it difficult to launch a sustainable commercial market.

Lack of diverse revenue streams
Revenue streams for CCUS projects are not well established. This makes it moredifficult to build a business case for many projects around the world, especially inthose regions that do not already offer support to reduce capital and operating
costs.
In the absence of stronger policy support, many operating CCUS projects havebenefited from revenue supported by EOR. This has helped spark initial projects,
but as global reliance on fossil fuels decreases in a net zero future, dedicated CO2
storage (and not EOR) may align better with long-term policy goals – this is alreadybeing reflected in the project pipeline (see Chapter 1). In addition, the volatility ofoil prices leaves projects vulnerable to fluctuations in global oil prices (seeChapter 3).

Low demand for low-emissions products

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The current policy environment lacks adequate demand-side measures to createa market for low-emissions products enabled by CCUS. Demand for theseproducts can help establish a commercial case, in particular for CO2 captured at
facilities that produce iron and steel, cement and fuels, and also for CO2 that is
utilised in products. As shown in Chapter 1, these low-emissions products canhelp decarbonise other parts of the energy system, such as long-distanceCCUS Policies and Business Models: building a commercial market

Chapter 2: Policy trends

transport. They can also potentially provide an additional revenue source forprojects, addressing the revenue gap identified earlier.
Emitters that capture their CO2 from emissions-intensive processes may be able
to sell these products, such as low-emissions iron and steel, cement, chemicals
and fuels, at a premium.
Likewise, CO2 that is captured from point sources or removed from theatmosphere could be used as a commodity and sold for its use in other processes
where it has a market value. Currently this is done at a very small scale in a
number of agricultural, food production and industrial processes. New utilisation
pathways, such as the production of CO2-based synthetic fuels, chemicals andbuilding aggregates, are needed to be compatible with the NZE Scenario, butcurrent policies are not enough to spark this demand.

Lack of standards and certifications for carbon dioxide
removalAs shown in Chapter 1, carbon dioxide removal (CDR) is needed to balance out
residual emissions from heavy industries and long-distance transport, and specificconsiderations are needed to ensure that that CDR technologies can participate
in policy frameworks.
Direct air capture with storage (DACS) and bioenergy with carbon capture andstorage (BECCS) differ from fossil point-source carbon capture projects in that theclimate benefits are focused on emissions removal and not emissions reduction.
This is a key distinction that is often not addressed in existing policy frameworks.
Specific considerations for removals – such as developing high-integrity
mechanisms to monitor, report and certify units of CO2 removal, as well as
integration into broader carbon markets – are only at a nascent stage, thoughsome governments are working on this (see Chapter 5).

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Strong interest and fast-moving action from the private sector for high-quality
carbon removal credits is putting pressure on governments to consider the role oftechnology-based CDR solutions in their existing carbon pricing schemes. A better
understanding of the implications of integrating removal certificates or credits indomestic compliance carbon markets is needed.

CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trends

Chapter 3: Business model trends
Overview
Business models for carbon capture, utilisation and storage (CCUS) used to relyon the “full-chain’’ model, characterised by a single project framework with multiple
entities responsible for the various steps of the CCUS chain (CO2 capture,transport, and storage). Today, new business models are emerging, often
alongside the development of the CCUS hubs approach, and others have thepotential to successfully support large-scale CCUS deployment.
Policy-related revenue streams for the full chain business model were very limited
and included one-off grant subsidies to recover part of the CAPEX, and low carbon
prices, where applicable. Additional potential income was related to selling thecaptured CO2, mostly to the oil and gas sector for enhanced oil recovery (EOR)(with limited CO2 monitoring undertaken – which was often below the standard forclimate-related reporting – and unpredictable revenues strongly tied to the volatile
price of oil). While the full-chain business model has some advantages – the main
one being simpler co-ordination between various steps of the CCUS chain – itcomes with multiple risks associated with each step, plus high complexity (with aneed for technical and operational expertise in all fields), as well as high CAPEX.

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In order to better manage risk, new business models are now emerging,
characterised by separate entities dealing with CO2 capture and with CO2transport and storage. Governments need to support the deployment of these newmodels and step in where the private sector struggles to progress. That could be
the case when it comes to co-ordinating the various steps of the chain and thevarious players; planning for transport and storage infrastructure ahead ofplanning for CO2 capture (due to longer lead times for storage); addressing longterm liability concerns related to CO2 storage; and establishing reliable revenue
streams where a profitable market for CO2 management does not yet exist. Partchain business models are particularly well suited for CCUS applications needed
for net zero, as they can allow emitters to outsource capture, transport and storage
expertise to specialised companies. For capture, this is particularly relevant for
applications where CO2 is not already separated as part of the process (asopposed to natural gas processing for instance, or ammonia), and which require
dedicated capture equipment. CCUS hubs can also shorten lead times forconnecting to common infrastructure, reduce costs through increased competition
within a more specialised corporate landscape and through cost-sharing on
infrastructure, and allow more dispersed and smaller emitters to connect to CO2transport and storage (due to economies of scale).

CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trends

Increased climate ambitions are moving the needle away from EOR and towards
dedicated storage. While CO2 storage is essential for avoiding the release of CO2
into the atmosphere, it still provides very little to no revenue and only in countries
with a carbon pricing system in place. Despite this, clear revenue streams fromalternative CCU pathways (with evident climate benefits) are still lacking. This isdue to a number of reasons, including technologies at a low Technology
Readiness Level (TRL), niche markets, and expensive applications and therefore
products. As a result, there is a strong need for governments to formulate policies
to promote new CCU pathways aligned with international net zero targets, suchas for building materials and synthetic hydrocarbon fuels.
Key elements of a CCUS business model
Project type

Ownership

Economic rationale

Challenges

Stakeholders

Full chain

PublicPublic sourcesHigh capital and operating
costs

Government

Part chain

PrivateGrants, tax credits, loan
supportLong project lead times

Policy makers

State-owned enterprises

Project complexity

Regulators (including
permitting)Self-capture with third-party
CO2 offtake
CO2 transport and storage
as-a-service
Capture-as-a-service

Public-private partnership

Carbon pricing

Innovation gaps

Public procurement of lowemissions products
Public procurement of carbon
dioxide removal services

Co-ordination among
various steps and/or players

Private sources

Policy uncertainty

Direct use of CO2

Public awareness andacceptanceLow-emissions products

Availability of finance

Voluntary carbon markets

Risk management andinsurance

Cross-border transport

Private sector
Project investors and owners
Developers and operators
Supply chain contributors

Civil society and the public

IEA. CC BY 4.0.

How can a value proposition for CCUS technologies be established?

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The term ‘’business model’’ refers to a company’s plan for making a profit. It
identifies the products or services the company plans to sell, its target market, thegap in the market it is trying to fill, any anticipated expenses and a financial model
to operate in a profitable manner. While the primary objective of publicly tradedfirms is to maximise profits for their shareholders, social and environmental
sustainability have recently become a major driver for innovation in companies’
business models. Moreover, business models are not only used to provide revenue
certainty, but can also tackle specific risks and allocate them in a fair and balancedmanner (for instance, between governments and private sector actors for CCUS).

CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trends

A primary component of a business model is its value proposition, explicitly stating
the value and attractiveness of the product or service offered to the customer.
Establishing the value of CCUS is crucial in order to be able to establish afunctional business model for it. The value of CCUS centres on emissions
reduction and/or removals, economic revenues generated from selling thecaptured CO2, and/or the creation of low-emissions products (e.g. low-emissions
cement, low-emissions steel). *The value proposition of CCUS can change depending on the key drivers behind
CCUS business models. A CCUS model focusing on meeting ambitious climate
targets will rely on policy and regulation, while a model focusing on economic
return will aim to increase revenues and decrease costs. So far, most operating
CCUS plants have relied on a CCUS value proposition favouring economic
revenues from using or selling CO2 (e.g. for EOR), with a lack of policy andregulation giving meaningful value to emissions reduction.
Each government should assess the role of CCUS technologies within its longterm targets of growth and climate change mitigation in order to clearly establish a
CCUS value proposition, and act accordingly. The goal should be to support
private investments towards emerging technologies and approaches that provide
social goods, and to redirect private capital away from emission-intensive activities
towards low-emissions ones. In order for governments to be successful in reaching
this goal, they should iterate based on real-world experience with policies as wellas learning from other jurisdictions. This requires an understanding of corporate
incentives and the types of businesses that policies might successfully attract.
* Note: IEA analyses highlight the stronger need for CO2 storage (compared to the need for CO2 utilisation) but see arole for both routes and for a full portfolio of CCUS technologies in order to meet net zero emission targets globally.

From full-chain to part-chain modelMoving away from the full-chain model

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With a few exceptions, most commissioned CCUS projects to date have operated
on the same business model: they are “full-chain” projects where CO2 istransported from one capture facility to one injection site, typically involving asingle project framework. While the full-chain model was a natural model for firstof-a-kind (FOAK) CCUS projects, full-chain projects suffer from high investment,
cross-chain risks and liabilities born by a single developer. Breaking-up the CCUS
value chain can help mitigate these hurdles as CCUS scales up, while avoiding
monopolistic behaviour. We are now seeing this happening, with part-chain
projects focused on capture, transport and/or dedicated storage developing inconnection to emerging shared infrastructure within CCUS hubs.

CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trends

Both full-chain and part-chain projects can be developed through a joint venture
ownership model, where a new company (a joint venture company, owned by theparticipating stakeholders) is created for each new project. This is usually theownership model behind CCUS hubs and clusters, and applies to private as wellas public stakeholders. In a joint venture, financial risk is reduced because it isspread across the different partners (e.g. at least two organisations, dealing with
CO2 capture and CO2 transport and storage), but co-operation and agreement on
where and how other risks are best tackled is essential to guarantee alignment
among the various steps of the CCUS chain.
Part-chain projects also come with their own challenges, starting with coordination among the various steps of the chain. Emitters are reluctant to invest in
capture facilities if they do not have any certainty on where to store the captured
CO2 and how to get it there; transport and storage operators seldom advance with
their planning unless they manage to secure at least a couple of initial customers.
This uncertainty makes financing these projects hard. Moreover, with multiple
potential customers looking for a way to deal with their own emissions, there is aneed to co-ordinate the technical specifications for transporting and storing CO2
in shared networks.

New players for new business models
Historically, oil and gas companies have been leaders in CCUS development.
They have the experience, subsurface and facilities, project management andfinancing capabilities to successfully deliver fully integrated CCUS projects andparts of projects. They manage most of the existing CO2 pipelines and all of thededicated CO2 storage projects in operation. Moreover, they are involved in overhalf of current operational capture capacity, with ExxonMobil, Chevron, Shell andOccidental together accounting for around 80% of that capacity.

Chemical companies, leveraging their technical know-how to develop proprietarycapture technologies, both to reduce emissions from their own facilities and toprovide capture solutions to third parties.

Engineering companies and original equipment manufacturers (OEM) developing
proprietary capture solutions, with modular capture skids for third-party emitters,
and potentially offering capture-as-a-service (particularly to smaller emitters).

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While oil and gas companies remain heavily involved in CCUS projects, and the
CCUS portfolio can support the energy transition of producing economies,
breaking-up the CCUS value chain into its constituent components is allowing new
specialised players to emerge. Over time, a larger role may be possible for heavy
industries (steel, chemicals, cement) as well as original equipment manufacturers
and service companies. Emerging players who are already involved in recently
announced projects include:CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trendsInfrastructure companies expanding their portfolio to CO2 management, such as
gas infrastructure developers who are increasingly involved in building andoperating CO2 pipelines, sometimes retrofitting existing gas assets.



Liquefied natural gas carriers and shipping companies expanding into CO2
shipping.



New companies focusing exclusively on CCUS.

Selected examples of CCUS business models
Business model

Examples of operational plants andcommercially available technologies

Main features

Uthmaniyah CO2 EOR Demonstration project(Saudi Arabia, 2015)

Single project frameworkacross entire CCUS supply
chain: vertical integration
model within the sameorganisation.

Full-chain model

Advantages: Fewer
synchronisation efforts. Thisbusiness model allows for
greater integration for acompany that can invest andoperate the entire CCUS
industry chain.
Challenges: Complex andtherefore limited to companies
with the resources to invest
and manage; difficult to
expand.

Karamay Dunhua methanol plant (China,
2015)Core Energy CO2-EOR South Chester plant(United States, 2003)
Illinois Industrial Carbon Capture and Storage(United States, 2017)
MOL Szank field CO2 EOR (Hungary, 1992)
Sinopec Nanjing Chemical Industries CCUS
Cooperation Project (China, 2021)
CNOOC Enping offshore CCS (China, 2023)
Petrobras Santos Basin pre-salt oilfield CCS(Brazil, 2013)
Sleipner (Norway, 1996)
Snøhvit (Norway, 2008)
Quest (Canada, 2015)

Self-capture with thirdparty CO2 offtake

Advantages: simple approach.
The emitter decarbonises its
own business while generating
revenues at the same time(e.g. by selling low-emissions
electricity or products and thecaptured CO2).
Challenges: risky approach forboth parties if they each rely
on a single client or supplier.
The price for CO2 captured

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Gorgon (Australia, 2019)
Coffeyville fertiliser plant (United States, 2013)
Great Plains Synfuel Plant Weyburn-Midale(United States, 2000)
Enid fertiliser plant (United States, 1982)
Arkalon CO2 compression Facility (UnitedStates, 2009)
Bonanza Bioenergy CCUS (United States,
2012)
Boundary Dam CCS (Canada, 2014)
China Energy Taizhou power (China, 2023)
PCS Nitrogen-Geismar plant (United States,
2013)
I EA. CC BY 4.0.

In this model, the (potential)
emitter takes care of thecapture step, operating thecapture unit, and sells thecaptured CO2, or relies on athird party for CO2 transportand storage.

CCUS Policies and Business Models: building a commercial market

Business model

Chapter 3: Business model trends

Examples of operational plants andcommercially available technologies

Main features
through CCUS applications
may not be competitive on an
open market.

Lost Cabin Gas Plant (United States, 2013)
Valero Port Arthur Refinery (United States,
2013)
Mikawa Power Plant BECCS Fukuoka
Prefecture (Japan, 2020)
NWR CO2 Recovery Unit (Canada, 2020)
WCS Redwater CO2 Recovery Unit (Canada,
2019)
Global thermostat headquarters plant (UnitedStates, 2023)
Labarge Shute Creek Gas Processing Plant(United States, 1986)

Capture-as-a-service

Advantages: if the CO2 issufficiently priced and a longterm purchasing contract is inplace, the CO2 transport andstorage operator faces low
risks. With state ownership,
there is easier access tofinance, usually at lower rates
than those faced by privateorganisations when operating
alone.
Challenges: long lead time,need to startplanning/investing before
customers have committed toany purchasing agreement.
This business model refers to
private organisations
specialising in specific part of
the CCUS chain related to
CO2 capture. They may supply
the capture equipment, or justa specific component (e.g.

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China Energy Jinjie power (China, 2021)

Terrell Natural Gas Processing Plant (UnitedStates, 1972)
Abu Dhabi CCS Project (United Arab Emirates,
2016)
Changling Gas plant /Jilin Oil Field CO2-EOR
Full-scale (China, 2018)
Clive CO2-EOR (Canada, 2020)
Alberta Carbon Trunk Line (Canada, 2020)
Cortez Pipeline (United States, 1983)

Just Catch capture system (Aker Carbon
Capture)CANSOLV capture system (Shell)
CyclonCC capture system (Carbon Clean)
I EA. CC BY 4.0.

CO2 transport and/or
storage as-a-service

One company (or aconsortium of companies,
potentially including stateowned enterprises) deals with
CO2 captured from various
emitters to transport it andstore it safely underground.
Two companies could be
involved, if one deals with CO2transport and the other with
CO2 storage. Given transportand storage infrastructure is anatural monopoly, theownership model is likely torely substantially on thegovernment’s participation or
via a regulated asset basemodel.

CCUS Policies and Business Models: building a commercial market

Business model

Chapter 3: Business model trends

Examples of operational plants andcommercially available technologies

Main features
separation columns, CO2
compressors) or consumable(CO2 solvent). The companies
offering capture-as-a-service
to emitters can either act asproject developers (owningand operating the capture unit)
or rely on technology
licensing.
Advantages: availability ofcommercial standard solutions
as well as more customisable
solutions.
Challenges: stable demand for
non-CCUS related
applications, potential lack ofdemand for CCUS ones; lackof established supply chainsfor core components andconsumables.

Econoamine FG Plus capture system (Fluor)
KM CDR Process capture system (MHI)
Cryocap, Recticap and Rectisol capturesystems (Air Liquide)
VeloxoTherm capture system (Svante)
Modular carbon capture and storage (MCCS,
Entropy)
Leilac calciner for cement production (LEILAC
Group)
Ortloff CO2 fractionation system, CO2 Polybed
PSA system, AmineGuard FS Process,
Calidus Burners (Honeywell)
BrightLoop, SolveBright, and OxyBright(Babcock & Wilcox)
CapsolEoP and CAPSOLGT (Capsol
Technologies)
LCDesign, Delta Reclaimer, Deltasolv (Delta
Cleantech)
Belco and Dynawave wet scrubbing system(Elessent Clean Technologies)
HISORP CC, HISELECT, and Rectisol wash
unit (Linde)
Toshiba post-combustion capture technology(Toshiba)
Orca (Climeworks)

Sources: IEA (2023), CCUS Projects Database; Global CCS Institute (2023).

Selected CCUS hubs approaches
Various approaches for the hub and cluster model are possible:
Hub developers can provide CO2 transport and storage services. This is thecase for the Northern Lights transport and storage hub in Norway, a joint
venture between Equinor, Shell and Total Energies (with strong support fromthe Norwegian Government, around 80% of the initial capital investment). The
project is developing infrastructure to transport CO2 from capture sites by ship
to a receiving terminal in western Norway for intermediate storage, before
being transported by pipeline for permanent storage in an offshore reservoir.
Another example is the Alberta Carbon Trunk Line (ACTL), operational since2020 in Alberta (Canada). The ACTL includes participation from multiple

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

CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trendsSome hubs are built by companies intending to initially deal with their own
emissions, around an ‘anchor project’, but with the perspective of opening up
to other emitters. In Italy, the Ravenna Hub, developed by Eni and Snam,plans to initially capture and store offshore around 25 000 t CO2/yr by 2024
from Eni’s natural gas treatment plant. In its second phase, the project will
increase capacity to around 4 Mt CO2/yr by 2030, with most of the capacity
coming from industrial emitters in the north of Italy connected to the hub by apipeline network developed by Snam.

In China, the Junggar Basin Hub, led by China National Petroleum Corporation(CNPC), plans to store CO2 captured initially from CNPC operations, and laterfrom hydrogen, cement and steel, as well as power generation in the region.

The hub can be supported by a partnership aiming to deploy strategic
infrastructure. This is the case of the Porthos (Port of Rotterdam CO₂
Transport Hub and Offshore Storage) Hub in the Netherlands, aiming to store
CO2 emissions from the port in a depleted offshore gas field. Porthos is apartnership between the Port of Rotterdam Authority, Gasunie (one of themain Dutch Transmission System Operators [TSOs]) and Energie Beheer
Nederland (EBN) (a Dutch public energy company). The Port of Rotterdam
Authority will be focusing on the local situation and market, Gasunie can offer
extensive experience with gas infrastructure and transport, and EBN will be
sharing its expertise in subsurface reservoirs and offshore infrastructure.

The hub can also be initiated by a consortium of industrial companies. In
Belgium, the Antwerp@C CO2 export hub involves the Port of Antwerp
alongside seven industrial partners* from the energy and chemical sectors.
The hub aims to develop a world-scale open-access modular infrastructure forthe transport, liquefaction, and export of CO2 captured by industries in the
Antwerp port area, to support the goal of reducing its CO2 emissions by 50%
by 2030. The export terminal will have a capacity of around 2.5 Mt CO2, withplans to increase to 10 Mt CO2 by 2030. In Canada, industrial companies arealso partnering with indigenous communities to advance hub solutions. For
example, the proposed Open Access Wabamun Carbon Hub west of
Edmonton, Alberta, which will have the potential to sequester nearly 4 Mt CO2
annually, will be co-developed and co-owned with local indigenous partners.
In the United States, a number of industrial consortiums have applied forfunding for up to four regional direct air capture (DAC) hubs. The hubs will
facilitate the deployment of DAC projects, will demonstrate the capture,processing, delivery and sequestration or end-use of captured carbon, and

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partners (North West Redwater Partnership Sturgeon Refinery and Nutrien’s
Redwater Fertilizer Facility) to capture industrial emissions and deliver CO2
through a pipeline (owned by Wolf Midstream) to mature oil and gas reservoirs(owned by Enhance Energy) for use in EOR and permanent storage in Central
Alberta.

CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trends

could even be developed into a regional or inter-regional carbon network tofacilitate sequestration or carbon utilisation.


The hub can be supported by a specialised infrastructure company, such asa TSO. That is the case for a few European TSOs, including Snam in Italy(Ravenna Hub), Gasunie in the Netherlands (Porthos and Aramis) and Fluxys
in Belgium (Ghent Carbon Hub and Antwerp@C).

* Note: Air Liquide, BASF, Borealis, ExxonMobil, INEOS, Fluxys and Total Energies.

Possible revenue streams
Market-led revenue streams can supplement policy-related revenue streams.
Revenue stream options that are not strictly related to policy include using thecaptured CO2 on-site or selling it to a third party for utilisation (for CO2-based
products such as fuels, chemicals or building materials); selling low-emissions
products (low-emissions steel or low-emissions cement); and storing the captured
CO2, for instance to provide a CO2 removal service.

Direct use of CO2
Carbon capture and utilisation (CCU) refers to a range of applications throughwhich CO2 is captured and used either directly (i.e. not chemically altered) or
indirectly (i.e. transformed) in various products. Climate benefits associated with agiven CO2 use depend on the source of the CO2 (from natural source reservoirs,
fossil, biogenic or air-captured), the product or service the CO2-based product isdisplacing, the carbon intensity of the energy used for the conversion process, andhow long the CO2 is retained in the product. While some CO2 use could bring
substantial climate benefits, the relatively limited market size for these applications
means dedicated storage should remain the primary focus of CCUS deployment.
However, support for RD&D can play a key role in the deployment of promisingCO2-derived products and services that are scalable and have good prospects tobecome competitive over time. CCU also promotes the development of capture
technologies and infrastructure deployment. Finally, CCU has the potential tocontribute to a circular carbon economy (where the maximum value of resources
is used before disposing of them) and to help create a market for carbon capture
technologies and therefore bring their price down.

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The main direct use of CO2 today is for EOR. In addition, CO2 can be used as aworking fluid for other underground applications, including enhanced gas recovery(EGR) and enhanced water recovery (EWR). The primary objective of CO2
injection in these applications is to enhance extraction. While most of the CO2
injected for EOR is retained in the reservoir over the life of the project, additional

CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trends

monitoring and verification is required to confirm that the CO2 has beenpermanently stored. CO2 EOR has been the most effective incentive for CCUS sofar, with around three-quarters of current operating capture projects using or
selling the captured CO2 for EOR. Moreover, EOR subsurface know-how is well
suited to geological storage development. As an example, in Canada, EOR
operators like Enhance Energy and Whitecap Resources possess CO2 injection
and storage expertise that can be applied to the development of dedicatedgeological storage hubs. Enhance Energy is using its EOR experience from the
ACTL to develop a storage hub in Central Alberta, while Whitecap is leveraging
its EOR experience at Weyburn to develop a storage hub in south-east
Saskatchewan.
However, in the Net Zero Emissions by 2050 Scenario (NZE Scenario), relianceon fossil fuels such as oil and gas decreases over time towards mid-century, withdedicated CO2 storage becoming the long-term solution for captured CO2. While
EOR helped spark the industry, experience has shown that it may not be a reliable
revenue stream for CCUS projects, and in the long run it may not align with policy
goals. In fact, based on the CCUS projects announced in the past few years,
companies are increasingly shifting away from EOR.

Is EOR a good revenue stream for CCUS?

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There is no official public record of CO2 prices paid by oil and gas companies for
EOR operations, but a rough benchmark is around USD 30/t CO2 when the oil priceis around USD 70 per barrel, with the two prices closely correlated. Such a priceis high enough to cover CCUS costs only for limited applications producing very
concentrated streams of CO2, such as natural gas processing, ammonia, andsome fuels such as bioethanol (see Chapter 4). However, oil prices are subject tosubstantial market volatility, with CCUS projects suspending operation because
selling CO2 was no longer profitable. As an example, operation of the Petra Nova
CCUS plant was suspended in 2020 when CO2 capture ceased to be profitable
due to low oil prices. Another example is the Shute Creek CCUS plant: over its
operational lifetime to date, the plant (commissioned in 1986 to capture CO2 during
natural gas refining) captured only around 34% of its operational capture capacity(around 120 Mt CO2 cumulatively). The captured CO2 was then mostly vented(50%) or sold for EOR injection (47%). EOR-related revenues alone are notenough for maximising capture and storage as a public policy goal. CCUS projects
should therefore be able to rely on more stable revenue streams that arecompatible with net zero goals (supported and/or enabled by policies), rather thanon revenues from selling oil, which has proven to be a risky revenue stream in thepast.

CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trends

Low-emissions products
Emitters have the option to sell premium, low-emissions products for a premium
price. Low-emissions products include those that have been produced with very
low emission intensities, such as low-emissions steel and cement (see Chapter
4). They can also include indirect use of CO2 in products, 15 such as synthetic fuels,chemicals or building aggregates, if produced under the right conditions (e.g. using
low-emissions energy for CO2 conversion).
Some of these applications are already in regulated markets, such as under the
Low Carbon Fuel Standard regulations, and efforts are underway to protect thesepremium products against emission-intensive and cheaper imported goods (seeChapter 5).
The First Movers Coalition (launched at COP 26 in November 2021 and led by theWorld Economic Forum) is an example of a privately-led initiative aiming at
aggregating demand for low-emissions products such as aluminium, cement andsteel. Another example is the Industrial Deep Decarbonisation Initiative (coordinated by UNIDO and designed to stimulate global demand for low-emissions
industrial materials).

Carbon markets
CO2 storage can shift from a cost to a source of revenue in those regions andcountries where there is a carbon pricing system in place. If the carbon price stays
as high as recently seen in some markets such as the European ETS (around
USD 85/t CO2), the full cost of capturing, transporting and storing CO2 can becompensated by the carbon price only for selected applications such as natural
gas processing, bioethanol production and hydrogen production (see Chapter 4).
In the absence of a compliance market, emitters can sell carbon credits in thevoluntary carbon markets based on certified emissions reduced or removed
through CCUS. Voluntary carbon markets (VCMs) are expanding substantially,
stimulated by the demand generated by growing corporate net zero commitments.
The carbon credit price on those markets can be particularly advantageous forCO2 removals or CDR (on average, around USD 300 per tonne of CO2 captured
and stored via bioenergy with carbon capture and storage [BECCS], and around
USD 720/t CO2 via DAC). Removals are currently supported almost exclusively
through voluntary carbon markets, and initiatives such as CCS+ (underdevelopment) or the Australian Carbon Credit Units (ACCU, now in place) aredeveloping the first methodologies, but public initiatives are also getting underway,

Emissions accounting needs to rely on life cycle assessment methodologies for CO2 use not resulting in permanent storage.

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15

CCUS Policies and Business Models: building a commercial market

Chapter 3: Business model trends

such as in the United Kingdom, and the European Union, with its Carbon Removal
Certification Framework (see Chapter 5).

Revenue streams by Technology Readiness Level (TRL)Prototype stage (TRL 4-6): at this stage, there is a strong need for thegovernment to intervene due to the lack of an established market. In thismodel, the government takes on much of the investment risks and operating
costs, contracting planning, development and operations to state-owned or
private entities. This was the case for the first phase of the Northern Lights
project. The private sector may also provide some support, in the form ofphilanthropic funding or equity investment.



Demonstration stage (TRL 7-8): at this level, risks are shared between the
public and private sectors, and a hybrid model comprising government
intervention as well as market competition can be applied. While important,
the government’s role is narrowed, and limited mostly to supporting CO2
infrastructure. For example, a regulated entity could be responsible for taking
the captured CO2 from emitters and developing the supporting transport andstorage infrastructure. Some examples of this approach include the East
Coast Cluster in the United Kingdom (with CO2 infrastructure operated by theNorthern Endurance Partnership) and the Porthos project in the Netherlands.
For both projects, the CO2 transport and storage operator is supported by thegovernment and is able to charge a fee to take on the captured CO2.



Mature technologies (TRL 9-11): the private sector takes on most of the risk
in a mature industry, without direct government intervention applied to themarket itself. This model applies mostly to liberalised economies (it may
struggle to take off in centrally controlled economies) and is economicallysuitable where both market incentives and policy regulations are sufficient tomake a profit out of the business itself. The private sector is free to decide how
its businesses will be structured, whether to invest in oversized transport andstorage capacity, and how to allocate risk and return. Currently this model
does not apply to CCUS applications beyond natural gas processing, EOR
and ammonia. It is important to note that even in a mature market model, there
is still a need for a strong regulatory environment to ensure the safe andsecure storage of CO2.

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Different business models are needed for different stages of technology andcommercial development. This is true now for CCUS, but was also true in the past
for other network industries such as natural gas and water. In addition, different
types of CCUS (especially CCU for chemicals) have different revenue expectations
at varying TRLs as the size of the test facility at each stage determines how muchcapital is put at risk. Depending on the model, the government’s level ofintervention and risk will vary.

CCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

Chapter 4: Challenges for future
deployment
While many clean energy technologies face deployment hurdles, carbon capture,utilisation, and storage (CCUS) projects face specific challenges related to theinherently site-tailored nature of the technology – technologies are usuallyindividually designed and manufactured to fit specific processes – and the needto deploy large-scale infrastructure. In addition, the value proposition for CCUS issolely based on its CO2 reductions, in contrast to other clean energy technologies,
such as solar PV and wind, whose value proposition also comes from electricity
generated.
Economic viability remains a significant hurdle, as costs associated with CCUS
technologies can be prohibitively high compared to unabated technologies. Long
lead times for project development and implementation further impede progress,
particularly with regards to CO2 storage development. As new business models
develop, project complexities also change, requiring greater co-ordination acrossthe value chain, mitigation of counter-party risks and allocation of long-term
liability, as well as the access to and management of shared, cross-border CO2transport and storage infrastructure. Finally, while some of the CCUS technologies
have been in use for decades, there is a need for continuous innovation to reduce
the energy penalty and costs for CCUS applications that are critical to net zero.
An understanding of these challenges will be necessary in order to best design
policies to support the timely roll-out of CCUS in different sectors of the economy.

Economic viability
Levelling the playing-field with unabated facilities

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Facilities equipped with CCUS are more costly to build and operate than theirunabated counterparts. This is because they require additional equipment tocapture CO2 and more energy, material (e.g. solvent) and water per unit of final
product (e.g. electricity or materials such as cement or steel). Carbon pricing,whether through carbon taxes or emission trading systems, can help make CCUS
more economically attractive by imposing a cost or a cap on emitting CO2 into theatmosphere. However, if the carbon price is too low or the cap is too high, thesemeasures can be ineffective or even counterproductive.

CCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

The level of carbon pricing required for facilities equipped with CCUS to breakevenwith their unabated counterparts depends on the levelised cost of carbon
avoided 16 by CCUS in a particular sector. Our analysis shows that carbon prices
between USD 40-60/t CO2 are required for CCUS-based routes to breakeven withunabated routes for high-concentration applications, and between USD 80-170/t
CO2 for diluted applications. CO2 prices around USD 85/t CO2, as observed in
2022 in the European Union (annual average), while promising, would only be
sufficient to incentivise concentrated applications and dilute applications in
optimistic cases. The variability and unpredictability of carbon pricing also creates
uncertainty for investors and project developers, making it challenging to secure
funding and plan for the long term.
Additionally, most CCUS applications which are particularly important for the net
zero transition (including cement, steel, power, hydrogen, CO2 removal) are atfirst- or second-of-a-kind level of deployment. While a carbon price could support
nth-of-a-kind plants, additional policy measures for targeted support are neededin the short to medium term to help these early plants get off the ground.
In the United States, the recent update of the 45Q tax credit, which provides USD
85/t CO2 captured for dedicated storage and USD 60/t CO2 used in industrial
applications and enhanced oil recovery (EOR), is improving the attractiveness of
CCUS, but remains insufficient for most applications.

See Annex B for more information on CCUS cost metrics definitions. Here the levelised cost of CO2 avoided includes a
CO2 transport and storage cost of USD 30 per tonne of CO2.

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CCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

USD/t CO₂

Levelised cost of CO2 avoided between CCUS and unabated route across sectors
200

150

100

EU ETS 2022 average
50

Concentrated

Refinery FCC

CementSteel BF

Gas CCGT

Coal PC

Ammonia

HydrogenHydrogen (partial)

Ammonia (partial)

NGP

0

Diluted
IEA. CC BY 4.0.

Notes: BF = blast furnace; CCGT = combined cycle gas turbine; FCC = fluid catalytic cracker; NGP = natural gas
processing; PC = pulverised combustion. Cost of electricity: USD 32-116/MWh; cost of fuel (USD/GJ): 4-14 (natural gas),
2-7 (coal), 7-9 (biomass); plant financial lifetime (years): 40 (coal and biomass thermal plants), 35 (gas CCGT), 25 (all otherplants); discount rate: 8%; capacity factor: 85% (power plants), 95% (all other plants); capture rates: 60% (partial hydrogen,ammonia), 90% (all), 93% (hydrogen, ammonia); CO2 transport and storage: USD 30/t CO2. No carbon price. Capture rates
are for the overall plant (power, hydrogen, cement), or for the flue gas when a specific unit is specified (steel blast furnace,refinery fluid catalytic cracker). For hydrogen, DAC, fuel transformation and industry applications, heat is assumed to beprovided by a natural gas-fuelled auxiliary boiler, and electricity from the grid.

High up-front investment
One of the most significant economic challenges of CCUS is the high upfront
capital costs associated with building carbon capture facilities and transport, andstorage infrastructure. CCUS can increase capital costs by 40-75% relative tounabated facilities in coal-based power generation, 95-110% for gas CCGTs and75-100% for biomass-based power generation. In cement production, capitalcosts can increase by 110-125% with CCUS, and by 30-45% in steel production.
High up-front project costs mean that companies potentially need to take on large
amounts of debt, which poses significant hurdles. Potential solutions include
grants, which can help lower the initial amount of debt a project takes on, andoperational subsidies that can help companies secure investment through loans,since the subsidies provide a reliable revenue stream to pay down the debt.

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CCUS projects also have a different risk profile to unabated facilities, owing tohigher uncertainties around costs and techno-economic performance of first-of-akind facilities, and long-term liabilities tied to dedicated CO2 storage. A higher risk
profile can increase the cost of capital for project developers. Given the large

CCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

contribution of capital costs to the overall levelised costs of capture, increasing thecost of capital from around 5% to 15% can increase levelised costs of capture by
30-65% in hydrogen, cement, and power generation. This can be particularly
challenging and act as a deterrent to investments for emerging economies, which
are characterised by higher costs of capital than advanced economies for largescale energy projects in general.

USD/t CO₂

Impact of cost of capital on levelised cost of capture for selected sectors
200
180
160
140
120
100
80
60
40
20
0

5%

8%
Hydrogen

15%

5%

8%

15%

Cement

5%

8%

15%

Power (coal)

5%

8%

15%

Power (gas)Weighed average cost of capital (%)
IEA. CC BY 4.0.
Notes: CCGT = combined cycle gas turbine; PC = pulverised combustion. Cost of electricity: USD 32-116/MWh; cost of
fuel: USD 4-14/GJ (natural gas), USD 2-7/GJ (coal), plant lifetime (years): 40 (power plant), 25 (hydrogen, cement);
discount rate: 8%; capacity factor: 85% (power), 95% (cement, hydrogen); plant level capture rates: 90 (all) – 93%(hydrogen).

Competitiveness with alternative low-emissions
technologies

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The ability of CCUS to capture demand for high-cost but low-emissions energy
and products hinges on its competitiveness with alternative low-emissions
technologies in a given sector and region. For certain applications such as power
generation, steel manufacturing and hydrogen production, multiple
decarbonisation technologies exist. The role of CCUS is therefore likely to belimited to regional contexts where the deployment of alternative solutions isconstrained, for example due to low availability of low-emissions electricity orhydrogen. However, for other applications such as cement production and carbon
dioxide removal, CCUS is one of very few – if not the only – technology solutionthat can deliver emissions reduction and permanent removal at scale.

CCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

Policy initiatives to increase the demand for high-cost but low-emissions energy
and products can help bridge the economic gap between low-emissions
technologies and their unabated counterparts. High capture (90% and beyond)(see Box ‘‘Can high plant capture rates be achieved?’’) and low upstream
emissions associated with fossil fuel production, are particularly essential for
CCUS routes to be considered low-emissions and be comparable with alternative
low-emissions technologies.

In recent years there have been numerous discussions at the international
level about reducing the share of fossil fuels in the global energy mix in orderto mitigate climate change. During COP 26 in 2021, participating countries
agreed to a provision calling for a phase-down of unabated coal power and aphase-out of “inefficient” fossil fuel subsidies. The same language wasmaintained in the COP 27 cover decision the following year. Central in this
discussion is the terminology around abated versus unabated fossil fuels.
While the general understanding is that unabated fossil fuel use refers to‘’consumption of fossil fuels in facilities without CCUS’’, not all CCUS facilities
are designed to capture the same amount of emissions. Ahead of COP 28(taking place in the United Arab Emirates in late 2023), it is important tohighlight that high capture rates (i.e. above 90%) are essential in order tominimise residual emissions to the atmosphere, and for CCUS to play a rolein the transition to a net zero energy system.



Plant capture rates depend on the share of plant emissions which areequipped with capture (particularly when plant emissions originate frommultiple sources, for example in a steel plant, which can require several
capture units), and on the capture rate of the capture system(s) used on eachsingle stream (i.e. stream capture rate).



For the latter, CCUS-equipped power and industrial plants operating today areusually designed to operate with a 90% capture rate on each flue gas stream.
While there are no technical barriers to increasing stream capture rates
beyond 90% for the most mature capture technologies (e.g. chemical
absorption), stream capture rates of 98% or higher require larger equipment,
more process steps and higher energy consumption. Modelling results basedon chemical absorption systems applied to power generation show that thelevelised cost of capture does not necessarily increase when increasing
capture rates from 90% to 95%, and only marginally increases at 99% capture
rates (as the greater amount of CO2 captured can compensate increases incapital and operating costs). In addition, advanced capture technologies
including chemical absorption with advanced solvents, oxy-combustion,

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Can high plant capture rates be achieved?

CCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

membranes and chemical looping, and supercritical CO2 cycles could reachhigher stream capture rates and lower energy penalties.
For facilities with multiple emissions sources, such as steel mills, biorefineries,
or hydrogen plants, plant capture rates and associated costs depend on which
stream(s) CO2 is captured from and/or the number of capture units. For
example, most operating steam methane reforming (SMR) facilities today
operate at partial plant capture: only the CO2 in the concentrated shiftedsyngas is captured, and not the diluted CO2 resulting from fuel combustion
from the reformer furnace. This typically results in plant capture rates between
40% and 60%, while plant capture rates of 90% and beyond could be achieved
with a capture system that combines both concentrated and diluted streams,
but with a significant increase in capture costs. To date, no operational plant
has achieved these levels of capture, but two hydrogen plants targeting 9095% capture are currently under construction in North America. Similar effects
can also be observed in biodiesel and bioethanol plants.



USD/t CO₂

Levelised cost of capture for different stream capture rates in coal and gas
power generation (left) and plant capture rates in biodiesel, bioethanol andgas SMR (right)
100

Sensitivity to stream capture rate

60

Sensitivity to plant capture rate

50

80

40

60

30
40

20

20
0

10
0
90%

95%
Coal PC

99%

90%

95%

99%

78%

96%

Biodiesel

Gas CCGT

12%91%

Bioethanol

56%

90%

Gas SMR
IEA. CC BY 4.0.

Notes: CCGT = combined cycle gas turbine; SMR = steam methane reforming for hydrogen production, PC =pulverised combustion.

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Sources: IEA analysis based on NETL (2022), NETL (2022), IEAGHG (2019), IEAGHG (2021), IEAGHG (2017).

CCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

Industry
The industry sector was directly responsible for emitting 9 Gt of CO2 in 2022,
accounting for a quarter of global energy system CO2 emissions. The mostemission-intensive industrial sectors are the so-called “heavy industries”, andinclude iron and steel, cement, chemicals, aluminium and pulp and paper. CCUS
can be integrated into most industrial applications, to capture both combustion
emissions (from fuel combustion for heat and electricity needs) and process
emissions (from chemical reactions producing CO2 as a by-product).
In iron and steel, the main routes to decarbonise production are hydrogen use asa reducing agent and CCUS. Other solutions such as electrification and bioenergy
fuel switching can also provide cost-effective carbon reductions, but face technical(for example, electrification of high-temperature heat) or sustainability (sustainablebioenergy supply) constraints. Overall, CCUS can provide cost-effective
decarbonisation when the hydrogen route is constrained or more costly due to low
availability of renewable electricity, or in regions with secure and low-cost gas
supply and access to CO2 storage. Depending on the steel production process,commodity prices and hydrogen production costs, CCUS can increase steel
production costs by 10-20%, while the hydrogen route increases costs by 20-25%.
CCUS is also a key technology for the decarbonisation of primary chemicals suchas ammonia, methanol and high value chemicals (HVC). 17 By 2050, more thanhalf of production of primary chemicals is equipped with CCUS in the Net Zero
Emissions by 2050 Scenario (NZE Scenario). In ammonia production, the main
decarbonisation alternatives to unabated gas-based production are CCUS andelectrolysis. CCUS can be a cost-competitive solution in the nearer term, as wellas in regions with low availability of renewable electricity: ammonia production
costs increase by 10-20% with CCUS, while they increase by 40-50% withelectrolysis, with decreasing costs of electrolysers. As electrolyser costs comedown and renewable electricity prices decrease, electrolysis is expected to
become the dominant route globally for ammonia production, while CCUS is
expected to play a role in regions with secure and low-cost supply of natural gas
and access to CO2 storage.
In cement, even though integrating CCUS to cement kilns can increase levelised
cement production costs by 60-130%, CCUS is currently the only technicallyavailable solution to address process emissions and achieve near zero emissions
in the sector. Other solutions such as the use of alternative raw materials may
enable reaching near zero emissions, but are currently at considerably earlier
stages of development. In the NZE Scenario, around half of cumulative emissions
reductions to 2050 in the cement sector are achieved through CCUS.

High-value chemicals typically include ethylene, propylene, benzene, toluene and mixed xylenes.

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17

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Chapter 4: Challenges for future deployment

Levelised cost of products for different industries and production routes

Steel

USD/t product

Cement200

Ammonia

1 200

160

1 800
1 500

900

1 200

120

900

600
80
40
0

600

300

Kiln

Fossil unabated

0

300

BF

CCUS-based

Gas-DRI
Renewable

H₂-DRI
2021

0

Gas
2022

Elec
2030 (NZE)
IEA. CC BY 4.0.

Notes: CCUS = carbon capture, utilisation and storage; BF-BOF = blast furnace basic oxygen furnace; Gas-DRI = natural
gas-based direct reduced iron/electric arc furnace (EAF) route; H2-DRI = 100% electrolytic hydrogen-based; Gas = steam
methane reforming to hydrogen combined with ammonia synthesis; Elec = renewable-based electrolysis combined withammonia synthesis; NZE = IEA Net Zero Emissions by 2050 Scenario. Cost of electricity: USD 32-116/MWh; cost of fuel:USD 4-14/GJ (natural gas), USD 3-7/GJ (coal), USD 7-9/GJ (biomass); plant financial lifetime: 25 years; discount rate: 8%;
capacity factor: 95%; capture rates: 90% for cement (plant level), 90% for steel (stream capture rate), 93% for ammonia(plant level). CO2 transport and storage: USD 30 per tonne of CO2. 2030 values as projected in the NZE Scenario.

Hydrogen production
In hydrogen production, the competitiveness of CCUS-based routes with waterelectrolysis is highly dependent on fuel prices, the price and availability of lowemissions electricity, and potential improvements in electrolyser capital costs andefficiency over time.
Production costs of electrolytic hydrogen based on renewable electricity can be
currently assessed between USD 3.6 and 5.4/kg H2 in favourable regions with highavailability of renewable electricity, depending on the source of electricity. At
natural gas prices below USD 14/GJ (average gas price in Europe in the 2018-23
period), gas-based hydrogen production equipped with CCUS is more
economically attractive than renewable electrolytic hydrogen for the best available
technologies, with a strike price around USD 26/GJ for electrolytic hydrogen to becompetitive in Europe. At prices of USD 40/GJ (average gas price in Europe in2022), the costs of producing hydrogen with natural gas can be twice as high as
the cost of electrolytic hydrogen in favourable regions.

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With the cost of renewable electricity and electrolysers expected to fall, electrolytichydrogen is expected to be increasingly competitive with gas-CCUS production,with gas-CCUS playing a major role only in regions with lower availability ofCCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

renewable electricity, secure low-cost natural gas supply, and access to CO2
storage. In the NZE Scenario, fossil-based hydrogen production with CCUS
makes up around 20% of total hydrogen production in 2050, while electrolysis
makes up the remainder.

USD/kg H₂

Levelised cost of hydrogen production for different regions and gas prices, 2022
Europe2022 average

87
6
Europe2018-23
average

5
4
3
2

US
2018-23
average

1
0

USD 3/GJ USD 9/GJ USD 14/GJ USD 24/GJ USD 39/GJ Offshore Solar PV - Solar PV wind - Middle East China
EuropeGas with CCUS
CAPEX

OPEX

EnergyWater electrolysis
CO₂ price
IEA. CC BY 4.0.

Notes: US = United States; PV = photovoltaics; Gas with CCUS = steam methane reforming with carbon capture, andstorage. Main assumptions: CAPEX: USD 1 440/kW (gas-CCUS), USD 1 650-2 530/kW (electrolyser); fixed OPEX: 4%(gas-CCUS), 3% (electrolyser); efficiency (% LHV): 69% (gas-CCUS), electricity price: USD 60/MWh (offshore wind
Europe), USD 36/MWh (solar PV Middle East), USD 23/MWh (solar PV China); capacity factor: 95% (gas-CCUS); 42%(offshore wind Europe), 33% (solar PV Middle East); 29% (solar PV China); discount rate/cost of capital: 8%; lifetime: 25
years; overall plant capture rate: 93%; CO2 transport and storage: USD 30 per tonne of CO2. Detailed assumptions will bemade available in a forthcoming Annex of IEA (2023).
Sources: IEA analysis based on data from McKinsey & Company and The Hydrogen Council; NETL (2022); IEAGHG(2017).

Power generation

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In power, the value proposition of CCUS for emissions reduction is generally
weaker than in other sectors, given the availability of low-cost and low-emissions
alternatives such as renewable-based routes. In the NZE Scenario, only around
2% of total electricity generation is supplied by fossil power plants equipped with
CCUS in 2050. Depending on coal prices and availability of renewable resources,
the levelised cost of electricity (LCOE) of coal plants equipped with CCUS can be
3-3.5 times higher than that of electricity generated by utility-scale solar PV, and3-4.5 times higher than onshore wind. Depending on gas prices, that of gas plants
equipped with CCUS can be 1.5-3.5 higher than solar PV, and 1.5-4 times that ofwind.

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Chapter 4: Challenges for future deployment

USD/MWh

Levelised cost of electricity of selected technologies, 2022
300
250

2022
2022

200

2021

150

2021

100
50

FossilBiomass 90%

Coal PC 90%

Gas CCGT 90%

Gas CCGT 90%

Biomass

Wind (offshore)

Nuclear

Solar PV

Wind (onshore)

Coal PC

Gas CCGT

Gas CCGT0

Low-emissions
IEA. CC BY 4.0.

Notes: CCGT = combined cycle gas turbine; PC = pulverised combustion; PV = photovoltaic. Coal includes both ultrasupercritical steam cycle and integrated combined cycles. Main assumptions: CAPEX (USD/kW): 2 630-5 320 (coal),
4 330-7 600 (coal 90%), 1 160 (gas CCGT), 2 280 (gas CCGT 90%), 3 730 (biomass), 6 580 (biomass 90%), 1 100-1 750(wind onshore), 2 820-4 060 (wind offshore), 640-1 120 (solar PV), 2 800-6 600 (nuclear); efficiency (% LHV): 42-43%(coal), 60% (gas CCGT), 43% (biomass), 33-34% (coal 90%), 52% (gas CCGT 90%), 34% (biomass 90%); load factors:
85% (thermal power plants), 26-42% (wind onshore), 32-50% (wind offshore), 13-21% (solar PV); fuel prices (USD/GJ): 2-7(coal), 4-14 (gas 2021), 7-32 (gas 2022), 7-9 (biomass); capture rates: 90%; CO2 transport and storage (USD/t CO2): 30;
CO2 price (USD/t CO2): 0-65; plant lifetime (years): 40 (coal, biomass, nuclear), 35 (gas CCGT), 25 (renewables); discountrate/cost of capital: 8%.
Sources: IEA (2023); IEAGHG (2019); NETL (2022).

However, CCUS still has potential use cases in the power sector for two main
reasons. First, CCUS can avoid the early retirement of young fossil assets andthereby help project developers to recoup investment, which is important for
ensuring a smooth transition, particularly in emerging economies characterised bya young industrial and power fleet. In Asia, for instance, the average age of coalplants is 14 years, and more continue to be built.

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Secondly, the LCOE metric only provides part of the picture, since it compares therelative cost-effectiveness of technologies operating independently, but does not
capture the value of individual power generation technologies operating
dynamically as part of a power system, particularly with regards to ensuring gridstability and flexibility. Power plants equipped with CCUS can provide firm lowemissions dispatchable generation, which can reduce the risk of a system’s failure,
and potentially increase the amount of renewable electricity which can be
integrated in the system overall. Power decarbonisation policies which account forthis flexibility and capacity value of power generation assets can support CCUS
deployment in this sector.

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Chapter 4: Challenges for future deployment

CO2-based fuel production
CO2 utilisation can represent a revenue stream for capture facilities. New
conversion routes use CO2 as a feedstock for industrial processes producing
various commodities such as synthetic fuels, chemicals, and building materials.
The economic viability of these conversion pathways depends on a number offactors, including availability and performance of best available technologies,
energy prices, market demand and supporting policies.
The current demand for synthetic fuels represents only a small fraction of thedemand for fuels, but could increase over time in response to policies incentivising
their use, such as low-emissions fuel mandates (e.g. for aviation in theEuropean Union) or standards (e.g. the Low Carbon Fuel Standard in California).
Robust, transparent and mutually agreed emissions accounting methods need to
be in place to quantify emissions reduction and avoid double counting. This isparticularly relevant for internationally traded synthetic fuels.

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CO2-based synthetic fuels require large amounts of energy to convert CO2 – avery stable molecule – into something else. For their production to be lowemissions, the energy required for the process and to produce hydrogen also
needs to be low-emissions, which can greatly influence costs. Another important
cost factor is that CO2 will need to increasingly be sourced from biogenic sources
or from the air to achieve emissions reduction in a decarbonised energy system.
In the short to medium term, CO2 can be captured from existing bioenergy facilities
at a cost ranging from USD 30/t CO2 (biofuels) to USD 100/t CO2 (biomass power
plant). As these applications can be limited in scale by the availability ofsustainable bioenergy supply, CO2 feedstock can also be obtained from direct air
capture (DAC) as the market scales up. While DAC does not face the same
constraints, this can however result in a much higher CO2 feedstock cost. In order
to be competitive with their fossil counterparts, CO2-based synthetic fuels would
require very low-cost electricity or high prices on fossil emissions, or targeted
incentives/mandates for low-emissions synthetic fuels.

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Chapter 4: Challenges for future deployment

USD/MWh

Levelised cost of CO2-based fuel production, 2022
600
500
400
300
200
100
0

2022

Potential

Synthetic methanol
CAPEX

OPEX

Electricity

2022

Potential

Synthetic methane
Biogenic CO₂ (low)DAC CO₂ (high)2022

Potential

Synthetic kerosene
Current fossil prices
IEA. CC BY 4.0.

Notes: CAPEX = capital expenditure; OPEX= operational expenditure. CO2 feedstock cost 2022: lower bound:
USD 30/t CO2 (assumed cost of capture for a biofuel plant); upper bound: USD 720/t CO2 (cost of capture for a DAC plant).
CO2 feedstock cost potential: lower bound: USD 30/t CO2 (assumed cost of capture on a biofuel plant); upper bound:
USD 430/t CO2 (assumed cost of capture for a DAC plant in 2030).
Sources: Based on data from McKinsey & Company and The Hydrogen Council; NETL (2022); IEAGHG (2017).

CO2 removal
The carbon dioxide removal (CDR) portfolio includes various approaches tocapture CO2 from the air and permanently store it so that it is effectively removed.
CDR approaches include nature-based solutions (such as afforestation andreforestation), technology-based solutions such as direct air capture and storage(DACS) and bioenergy with carbon capture and storage (BECCS), as well as
enhanced natural processes (such as enhanced weathering). BECCS indirectly
removes CO2 from the atmosphere through capturing the emissions generated
during biomass refining or combustion, while DACS captures it directly from theatmosphere through liquid solvents or solid sorbents.

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The cost of removal through DACS is typically higher than for point-source capture
methods such as BECCS, due to both higher capital cost (DAC is a relatively newtechnology – with the first pilot plant commissioned in 2010 and the first kilotonnescale plant commissioned in 2021) and higher energy requirements (due to themuch lower CO2 concentration in the air compared to its concentration in a stream
from bioenergy refining or combustion). The cost of removal (see definition in
Annex C) using DACS technologies depends on technology archetype and energy
source, and can range between USD 300-730/t CO2. That of BECCS depends on
the application and overall life-cycle emissions from the BECCS value chain, withlevelised cost of removal ranging between USD 40-50/t CO2 for concentrated

CCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

streams such as bioethanol and biodiesel, and between USD 60-85/t CO2 forbiomass-fired boilers (employed in both power and industrial production
processes). The use of one technology or the other will depend on regional factors
including availability of low-emissions electricity and waste heat, and ofsustainable biomass supply.
While technology-based removal methods are generally more costly per tonne of
CO2 removed than nature-based CDR and enhanced natural processes, they arealso characterised by higher storage timescales, with a high probability that mostof the CO2 will remain trapped for at least 1 000 to 10 000 years, while storage
timescales for nature-based CDR are typically decades to centuries.
Cost of removal and storage permanence for different removal methods
10 000
1 000

100

100
10

10

DACS

BECCS

Afforestation

BiocharEnhancedweathering

Industry

Power

Liquid DAC

Biofuels1
Solid DAC

1

Storage timescales

USD/t CO₂ removed

1 000

Other CDR methods
IEA. CC BY 4.0.

Notes: DACS = direct air capture and storage; BECCS = bioenergy with carbon capture and storage; CDR = carbon dioxide
removal. Biofuels include bioethanol and biodiesel. DACS cost of removal includes the cost of capturing and storing CO2,
including for indirect CO2 emissions associated with DAC energy use. BECCS costs only include costs of capturing,
compressing, transporting and storing CO2 (and exclude costs associated with bioenergy production), and accounts forbiomass life cycle emissions. CO2 transport and storage: USD 30/t CO2.
Sources: Alcalde (2018), IPCC (2021), EASAC (2018), Fuss et al. (2018), Haszeldine et al. (2018), Beerling (2020).

Long lead times
CCUS project structure and timelines

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Developing a CCUS project from announcement to commissioning goes throughdifferent stages, including feasibility studies, design and development, andconstruction.

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Chapter 4: Challenges for future deployment

The objective of the feasibility stage is to assess the practicality and viability ofthe proposed project. For the capture and transport part of the chain, this stage
aims to deliver the preliminary technical, economic, regulatory and environmental
assessments of the facilities to determine whether the project can proceed; thisstage can typically be completed within 1-2 years. For projects including geologicalstorage, this step is particularly critical since it includes the assessment of CO2
storage resources, which determine where, in what quantity, at what rate, andfor how long CO2 can be safely injected and stored. This requires numerous andextensive studies, modelling of the subsurface, drilling of test wells and seismic
assessment, among other assessments. As a result, timelines for storage
assessment can be years longer than for capture and transport feasibility, andtherefore this step should commence well in advance.
The development stage aims to translate the outputs of the feasibility studies into
detailed project specifications and planning, and to secure permits ahead of the
final investment decision (FID). For capture and transport, this stage includes
Front-end Engineering and Design (FEED) studies for capture and transportfacilities, which can take around 2 years. Securing regulatory approvals, such asenvironmental, exploration and injection approvals, can be the most timeconsuming step, and can take years, depending on jurisdictions, assuming thatlegal and regulatory frameworks are already in place.

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The final investment decision (FID) on the project takes place sometime between
design, and development and construction. At any point before the FID a project
can be cancelled following an unfavourable assessment. Once a final positive
investment decision is made, projects can proceed to detailed engineering,procurement, construction (EPC) and commissioning. This step can be more timeconsuming for capture and transport facilities, which require procurement of a wide
range of processing equipment and the construction of facilities, than for storage,
for which less infrastructure is required. Overall this phase can take 2-4 years.

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Chapter 4: Challenges for future deployment

High-level planning and indicative timelines of a CCUS project(years)Feasibility andresource assessment

0 1 2 3 4 5 6 7 8 9Storage resource assessment
Feasibility studies
FEED studies

Regulatory approvals
Project development:
design, permitting and Geologic and reservoir approvals
financing
Well approvals
FID

Financing
Procurement,
construction andcommissioning

Engineering, procurement and construction
Start-up

Ramp-up

IEA. CC BY 4.0.
Note: FEED = Front-end Engineering and Design; FID = Final investment decision. Storage resource assessment may
include site appraisal, subsurface modelling, seismic assessment, Monitoring, measurement and verification definition andplanning.
Sources: IEA analysis adapted from Alberta Department of Energy, (2017), Alberta Carbon Trunk Line, (2020).

How long have past projects taken?

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CCUS projects already in operation have taken from less than 2 years to over 10
years from announcement to commissioning, with a median around 6 years. Thiswide range can be explained by the diversity of projects, in terms of application forCO2 capture, fate of the CO2 (dedicated storage or utilisation), and infrastructure
requirements. In addition, most operating projects are first- or second-of-a-kinddemonstration projects, often reliant on public funding, and subject to unique
circumstances related to the lack of operational experience for certain CCUS
technologies or applications.

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Chapter 4: Challenges for future deployment

Lead times of selected operating and planned CCUS projects
Alco Biofuel (Belgium, 2018)
Mikawa BECCS (Japan, 2020)
Bonanza CCUS (USA, 2012)
Boundary Dam (Canada, 2014)
EOR full-chain
Petra Nova (USA, 2016)
Abu Dhabi CCS (UAE, 2016)
ACTL (Canada, 2020)
EOR hub
Sleipner (Norway, 1996)
Quest (Canada, 2015)
Dedicated
Snøvit (Norway, 2008)
storage
Red Trail BECCS (USA, 2022)
full-chain
ADM Decatur (USA, 2017)
Gorgon CCS (Australia, 2019)
Northern
Lights (Norway, planned)
Dedicated
Used or vented

storage hub

Diluted source0Concentrated source

3

6

FID

9

12
years

IEA. CC BY 4.0.
Notes: BECCS = bioenergy with carbon capture and storage; CCS = carbon capture and storage; CCUS = carbon capture,utilisation and storage; EOR = enhanced oil recovery; FID = Final Investment Decision, UAE = United Arab Emirates; US =United States. Lead time is defined as time between first project announcement and commissioning. Mikawa BECCS
projects ultimately aims to store the CO2 but CO2 is currently used or vented.
Source: IEA analysis based on IEA (2023), CCUS Projects Database.

The source of the CO2 can also have an important impact on lead times. Projects
which involve CO2 capture on concentrated CO2 streams, such as in natural gas
processing and bioethanol production, only require CO2 drying and compression,
whereas diluted streams, for example in electricity generation and industrial
production, require the installation of a capture unit. It took less than 2 years todesign and deploy CO2 separation at the Bonanza bioethanol plant in the UnitedStates, while it took more than 6 years to design and deploy capture at the
Boundary Dam coal-fired power plant.

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The fate of the CO2, and whether CO2 storage resources need to be assessed,
or CO2 transport infrastructure constructed, is the first factor affecting project leadtimes. Projects which involve utilisation tend to have shorter lead times thanprojects involving dedicated storage. Developing a new CO2 storage site can take3-10 years: most of this is driven by the time it takes to develop resources. As an
example, it took almost 4 years to complete subsurface modelling for the Quest
project in Canada. EOR projects can typically be developed faster than dedicated
CO2 storage sites, given that the subsurface is already known and characterised
thanks to ongoing oil and gas operations. This is also true for storage in depleted
oil and gas fields, whose geology is already known. These projects still require
extensive injection tests and risk assessments to ensure the permanence andsafety of CO2 storage.

CCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

Securing regulatory approvals can be a time-consuming step for all projects,
but storage development requires specific exploration and injection drilling permits
that can take years to obtain. This is likely to vary significantly across jurisdictions
as permitting procedures are established and improved.
The structure and complexity of the CCUS project, whether it is a full-chain
project connecting one capture source with one dedicated storage site, or partchain project connected as part of a CCUS hub, and resulting infrastructure
requirement, are other potential drivers of lead times. The Alberta Carbon
Trunkline commissioned in Canada in 2020 is the first infrastructure project
connecting two capture units to one injection site (for EOR). While developmentof the capture units took less than 6 years, the overall project took close to 10
years to reach commissioning, delayed by the difficulty of synchronising thevarious elements of the value chains.
Securing financing can also represent a source of delay. For operating projects,
reaching the FID has taken on average the same amount of time as project
construction. Most large-scale CCUS projects cannot operate without investment
support and operational subsidies. This is particularly burdensome for thoseprojects which cannot benefit from revenue streams related to CO2 utilisation.
Moreover, first- or second-of-a-kind projects suffer from high uncertainty in costestimates, which tend to be revised upward between feasibility, FEED and EPC,
with a risk of running over the allocated budget.

Perspectives for future lead times
Accelerating project lead times is vital to bring the global deployment pathway intoline with the requirements of the NZE Scenario. There is potential for lead time
reductions. The next generation of projects can benefit from learnings from past
projects, both in terms of technical specifications and streamlining regulatory
approvals. For example, the Red Trail BECCS Energy project, the second-of-akind bioethanol capture project injecting CO2 for dedicated storage, took 1 year
less to complete than the Decatur ADM project. Governments are also
implementing measures to reduce permitting and licensing lead times, such as in
the United States and European Union (see Chapter 5).
Modularisation can also help reduce project lead times. While retrofitting capture
units from feasibility to commissioning took around 6 years at the Quest plant,some companies are offering modular end-of-pipe capture units which could be
deployed over a period ranging from 24 to 30 months.

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Projects that connect to existing CO2 management infrastructure could also
benefit from reduced lead times, with the potential to be completed in 4 years or
less. However, as projects move towards a hub structure, with complex networks
connecting multiple facilities and CO2 storage sites, there is also a risk that theCCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

first hubs take longer to develop than full-chain projects. Construction is underway
for the Northern Lights project in Norway, which could be the first operatingtransport and storage hub in Europe, with a targeted commissioning date in 2024.
If the project is completed on time, the project would have taken around 8 years
to reach commissioning. Brevik Norcem, the first large-scale CCUS unit applied
to a cement plant, which would connect to the Northern Lights storage hub, would
also have a lead time of just over 8 years, if completed on time. Government coordination between CO2 storage developers and emitters, and a phased approachto hub capacity, can help reduce these lead times.
Large networks spanning over extended areas also present the risk of facing moresocial opposition, causing further delays. This is, for example, the case for plansby company Navigator to develop a pipeline network spanning five states, whichwere just cancelled amidst permitting hurdles. Another 3 000 km pipeline planned
to connect more than thirty bioethanol facilities in the United States across a fivestate region is currently facing opposition from local land-owners that has caused
delays in securing permitting. Engaging with local stakeholders early in theprocess and emphasising the social benefits of planned projects is important to
reduce potential delays (see Box on “Enabling social acceptance of CCUS byshowing community benefits” in Chapter 5).

Project complexity
The shift toward the CCUS hub model provides many benefits (see Chapter 3),
but also means that project structure is increasingly complex, with implications forrisk, timing, co-ordination and social acceptance.

Project risks
CCUS projects present a range of risks which need to be carefully managed.
These include technical, market, cross-chain, social, regulatory, environmental
and legal risks.

Types of risks

Description

Technical

Relates to technical failure of all or part of the CCUS value chain, which
could impact the overall network.

Cross-chain risks

The risk that failure or unavailability of part of the chain impacts otheractors in the chain.

Market & financial

Fluctuations in carbon prices, energy prices and other market factors
can impact the viability of a CCUS project.

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Overview of potential risks for CCUS projects

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Chapter 4: Challenges for future deployment

Types of risks

Description

Legal

Determining liability in case of leaks, accidents or negativeenvironmental impacts can be complex and could result in legal
disputes between parties involved in CCUS projects. Attributing longterm liabilities associated with CO2 storage can be particularly
challenging.

Regulatory

As regulatory frameworks for CCUS are being implemented or updated
around the world, changes in regulation and policies could impact thefeasibility or economics of CCUS projects.

ClimateFailure to contain CO2 in storage sites could result in CO2 re-releaseand therefore the reversal of CCUS mitigation effects.
Capture: Solvent degradation in air, if unmanaged, could present toxic
risks to the exposed population.

Health, safety, andenvironment

Transport: CO2 leaks in a high-pressure transport system could pose
health and safety risks for operators and local populations.
Storage: Injected fluids can activate either known or unknown faults
and cause seismic events, or interact with other subsurface resources.

Social acceptability

Communities near storage sites or along transportation routes might
oppose CCUS projects due to fears of leaks, accidents, or othernegative impacts on their surroundings. The wider population could also
oppose funding for CCUS projects owing to lack of trust in thetechnology.

Moving from full-chain projects to complex CCUS hubs can impact the projectrisks, particularly with regards to the following aspects:
Counter-party risks: greater co-ordination is required between stakeholders
within a CCUS hub to ensure syncing of emissions sources and sinks on the value
chain. A diverse group of emitters and sinks can make the network more resilient,but the design of CCUS networks must take into account when different sources
and sinks become available and at which capacity.
Legal: allocating liabilities across stakeholders can be more complex. However,in a CCUS hub, risk provision can be shared among a greater number of actors.
Market and financial: Large CCUS hubs enable cost-sharing among emitters but
require greater up-front investment than full-chain projects.
Social acceptability: CCUS hubs require infrastructure which may span large
areas, increasing the potential for social opposition.

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These risks need to be addressed through proper project planning, thorough risk
assessments, transparent communication with stakeholders, adherence toregulatory guidelines, and ongoing monitoring and maintenance.

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Chapter 4: Challenges for future deployment

Cross-chain co-ordination
As the CCUS value chain is broken into smaller projects, it is essential that captureand storage developments track each other. CO2 emitters require CO2 transportand storage infrastructure to be available to start planning their project, whiledevelopers of CO2 management services need to secure demand through offtakeagreements with CO2 emitters if they are to invest in costly CO2 infrastructure.
Matching emissions sources to potential sinks can be used to design optimal CO2
networks at the regional level. Governments have a key role to play in planningthe development of CCUS hubs, for example through funding these source-sink
matching studies.
Until 2021, global CO2 storage plans were lagging behind capture plans, but
increased focus on developing storage resources has helped to boost thedevelopment of the entire sector. For example around the North Sea, initiatives
from Denmark, Norway, the Netherlands and the United Kingdom to accelerate
CO2 storage explorations in the area led to a rapid increase in both capture andstorage plans.

Mt CO₂ per year

Capture and storage capacity in planning around the North Sea, 2019-2023
160

Full chain

CaptureStorage

140
120
100
80
60
40
20
0

Capture Storage Capture Storage Capture Storage Capture Storage Capture Storage
2019

2020

2021

2022

2023
IEA. CC BY 4.0

Notes: Assessment includes the following countries: Denmark, Iceland, Norway, Sweden, the Netherlands, and the United
Kingdom. 2023 data refer to estimated data as of June 2023.
Sources: IEA (2023), CCUS Projects Database.

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Co-ordination becomes particularly critical in a hub model, as hubs typicallyinvolve oversized infrastructure with higher CO2 management capacity in order tocater for future demand. The average size of CO2 storage hubs in planning acrossCCUS Policies and Business Models: building a commercial market

Chapter 4: Challenges for future deployment

the world is over 5 Mt CO2 per year, around four times greater than the average
size of capture projects.
A phased approach to developing transport and CO2 storage projects is required
to minimise the risks of over- or under-sizing the system. For example, theNorthern Lights transport and storage project in Norway is considering a third
expansion phase to meet demand from emitters who have expressed interest inconnecting. This third expansion would be more than six times greater than theplanned capacity of the first two phases combined. A phased approach can also
allow for changes in financial support, with the first phase of Northern Lights being
supported by government, and the second and third aiming to be commercial.

Access to CO2 management infrastructure: sectoral andregional considerations
Some emission-intensive applications are more suited to being part of an industrial
cluster and therefore being an ideal target for a CCUS hub than others. For
example, oil and gas, chemical and petrochemical production plants are frequently
located in close proximity to each other due to their feedstock interdependency,
and while power plants are fairly evenly distributed, they are usually large-scale
and therefore emission-intensive. In contrast, cement production plants tend to besmaller and more dispersed. BECCS facilities, including biofuel, power, waste-toenergy, and pulp and paper plants, also tend to be smaller scale and moredispersed, often close to sustainable bioenergy feedstock, the production of which
is widely spread, or close to urban centres if relying on municipal solid wastes.

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Moreover, CO2 management infrastructure needs will not be the same acrosseach region, depending on numerous factors including geography, storage
potential (whether onshore or offshore), industrial economy and population
density. The structure of CCUS hubs and infrastructure networks – either througha linear trunkline spanning a large area, or local collecting pipelines connected toterminals for CO2 shipping over longer distances – needs to be adapted to different
regional contexts.

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Chapter 4: Challenges for future deployment

CO2 emissions clusters and storage hubs in planning in selected regions, 2023

IEA. CC BY 4.0.
Notes: Point sources and CO2 emissions clusters include steel, cement, chemical, power generation and refining in facilities with total emissions larger than 0.1 Mt CO2 per year. Sedimentary
thickness (km) is used to indicate theoretical potential of CO2 storage sites. Sources: Analysis based on US EPA Office of Atmospheric Protection (2021); European Commission (2021); Kearns
et al., (2017); S&P Global (2022); Global Energy Monitor, (2022); Global Cement, (2022).
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Globally, our analysis shows that around 60% of global cement plant emissions
are within 30 km of industrial clusters, 18 compared with 80-90% for steel, power,
and chemicals emissions.
In North America, around 70% of emissions from steel, chemicals, cement, power,
and refining plants are within 30 km of emissions clusters, many of which are in
the close vicinity of the many onshore CO2 storage hubs currently underdevelopment. The picture is different in Europe, where most CO2 storage hubs arebeing developed in the North Sea, even though only around 15% of emissions arewithin 100 km of ports on the North Sea coast. Cement plants are particularly
dispersed, with only 25% of the sector’s emissions close to industrial clusters.
Developing infrastructure to reach dispersed and smaller emitters, particularly inlandlocked countries, will be crucial.
In China, around 90% of emissions could be within industrial clusters but only afew storage hubs are currently under planning. In the Middle East, this share goes
down to around 70%, and only one storage hub is currently in planning.

Multimodal and cross-border CO2 management
infrastructure
Depending on geography and on the location of emitters and geologicalresources, large CCUS hubs may require more complex multi-modal transportsystems. These can involve ships, pipelines and trains, but also CO2 terminals,liquefaction facilities and storage tanks. This more complex, potentially crossborder infrastructure can pose several challenges.
Legal and regulatory: Transporting CO2 across borders involves navigatinginternational regulations and agreements related to environmental protection,transportation and trade. Different countries might have varying rules andstandards for transporting hazardous materials. The London Protocol allows forstorage of imported CO2, as long as bilateral agreements have been signed
between the two countries. Determining liability and jurisdiction in the case of
accidents, leaks or other incidents during transport can be complicated whencrossing international boundaries.
Permitting: Obtaining the necessary permits and approvals from multiple
jurisdictions can be time-consuming and may require compliance with a variety of
regulatory frameworks. Delays in permitting can impact project timelines andcosts.

Here defined as clusters of emissions greater than 5 Mt CO2 per year.

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18

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Technical compatibility and CO2 properties: CO2 can be transported in different
phases (e.g. gaseous, liquid, dense) under different pressures and temperatures.
Maintaining the appropriate phase during transport is essential for safety andefficiency, particularly when switching from one mode to another (e.g. frompipeline to ship). Ensuring compatibility across various systems in terms of CO2
properties and impurities is also required.
Carbon accounting: The potential for varying standards and requirements
between nations can complicate the certification process, leading to ambiguities
in the validation of carbon credits.
Addressing these issues requires effective international collaboration,
harmonisation of regulations, transparency, robust risk assessment andmanagement, investment in infrastructure, and ongoing communication withstakeholders. As the development of cross-border and multi-modal CO2 transport
projects increases, it is important to consider and manage these challenges toensure safe and efficient transportation of CO2.

The innovation gap
The successful scale-up of CCUS depends on the timely development of a rangeof capture, transport, storage and utilisation technologies. The CCUS applications
that are mature today are not necessarily the ones consistent with the NZE
Scenario. For instance, capture on natural gas processing plants (one of the few
mature CCUS technologies to date) makes up just around 1% of cumulative
capture needs by 2050 in the NZE Scenario, owing to a phase-down in oil and gas
demand. Around three-quarters of planned capture capacity by 2050 in the NZE
Scenario relies on technologies that are still at demonstration or prototype scale.
While this is significant, this gap in technology maturity can be quickly reducedwith a handful of technologies being demonstrated (e.g. capture in a large-scale
cement plant). Around 40% of planned capacity which relies on technology atdemonstration stage or below is in industrial applications, which makes up a thirdof cumulative captured CO2 to 2050.

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CO2 removal is another area with a strong need for demonstration. DAC has madeprogress in the past two years, moving to the demonstration stage with the firstkilotonne scale plant entering operation in 2021. Capture on utility-scale biomass
gasification plants and advanced biofuels facilities, however, is still at the
prototype scale.

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Chapter 4: Challenges for future deployment

Gt CO₂

Cumulative CO2 captured by Technology Readiness Level (2022-2050) in the Net Zeroby 2050 Scenario, by sector
30
25Prototype20

Demonstration

15

Early adoption

10

Mature5

Power

Fuel supply

Industry

Biofuels

Biomass power

DAC

Aluminium

CementChemicals

Iron and steel

Other

Hydrogen

Gas

Coal

0

CDR
IEA. CC.BY.4.0

Note: CDR = Carbon dioxide removal. Technology Readiness Level (TRL) between 4 (early prototype) and 6 (full prototype
at scale); demonstration: TRL between 7 (pre-commercial demonstration) and 8 (first-of-a-kind commercial); early adoption:
TRL between 9 (commercial operation in relevant environment) and 10 (integration needed at scale); mature: TRL 11(proof of stability reached).
Source: IEA (2023), Clean Energy Technology Guide.

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With regards to the regional distribution of innovation needs in the NZE Scenario,
emerging economies have a lower share of planned capacity relying ontechnologies at a lower TRL than advanced economies. This is mostly driven bya relatively larger demand for capture retrofits on existing power facilities, which
rely on state-of-the-art post-combustion chemical absorption, while more CDR is
deployed in advanced economies. However emerging economies account for alarge part of cumulative CO2 capture by 2050 in the NZE Scenario, which means
the innovation gap is greater in absolute terms. Additionally, some technologies
that have been demonstrated in advanced economies have not yet been
demonstrated in emerging markets, where only around 30% of operating capacity
is concentrated today. International technology and knowledge transfer will be
required to bridge the innovation gap in emerging markets.

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Chapter 5: A policy toolkit

Chapter 5: A policy toolkit toaccelerate deployment and build acommercial market for CCUS
As Chapter 2 outlines, policy makers have at their disposal a suite of instruments,
or tools, to facilitate and promote the deployment of carbon capture, utilisation andstorage (CCUS) projects. Experience has shown that layering or stacking various
policies across different categories can help address different risks that a CCUS
project may face.
Yet, the current policy landscape for CCUS – while promising – is insufficient tobuild a viable and sustainable business case in many regions around the world.
Enabling legislation and rules and cost reduction measures, primarily, havecontributed to the successful deployment of projects today. But beyond these “lowhanging fruit” approaches, other categories of policies that regulate industrial
activities, send strategic signals and allow for the creation of revenue streams areneeded to scale up CCUS.
Governments do not need to reinvent the wheel: policy makers can look to othersectors or policies for clean energy technologies to address these gaps andchallenges. In fact, many governments are already using the regulatory learnings
from other parts of the energy sector and applying aspects of successful policies
in the context of CCUS.

Overview on types of approaches to build acommercial market

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Each government may take a slightly different approach to establish a viable andsustainable market for CCUS. One point is clear: there is no one-size-fits-all way
to approach building a commercial market. Instead, various approaches should bethought of as existing on a spectrum – on the one end, governments can use
incentive- or penalty-based policies (a “carrot-and-stick” approach) to drive private
sector decision-making; on the other end, governments fully control what themarket will look like and its design; and in the middle, governments are more
involved in some aspects of market design, but not all. This is not unlike thespectrum of economic regulation, with laissez-faire capitalism at one end andcentralised economic planning at the other.

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Chapter 5: A policy toolkit

A number of institutional, economic and political factors will influence what part of
the CCUS policy spectrum a country may end up on. And it is important to notethat countries may move along the spectrum as these factors change and as thedomestic market for CCUS evolves. For example, Norway and the United
Kingdom are taking very active roles in establishing a market for CCUS, bothfocusing on providing large amounts of support for first-of-a-kind projects (withNorway covering around two-thirds of the costs of the Longship project, and theUnited Kingdom taking on CO2 leakage risks in the absence of commercial
insurance solutions). Later, these countries plan to transition to a lowerintervention phase as the commercial market develops. Likewise, countries can
exist across parts of the spectrum as policies also change, and where a country
sits on the spectrum may dictate the types of policy tools used to promote CCUS
deployment.
Of course, there are trade-offs between different approaches: a low intervention
approach may result in faster outcomes, but those outcomes may not necessarilybe aligned with government goals, whereas as a high intervention approach mayprioritise policy goals over speed.
Spectrum of existing approaches to building a commercial market for CCUS

IEA. CC BY 4.0.

Incentives- or penalty-based systems

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In an incentives- or penalty-based system, often referred to as a “carrot-and-stick”
approach, countries use policies to influence how a private company will make its
investment decisions. This is either done with incentives, whereby thegovernment offers subsidies such as grants, loans or tax credits to privatecompanies to deploy a certain technology or adopt a certain practice, or withpenalties, whereby private companies are penalised via taxes or fees for notcomplying with regulations, or are bound to deployment or product mandates. The
incentive-based system has the advantage of providing the private sector with
substantial funding, however, there is no guarantee these incentives will be pickedCCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

up, if poorly designed. That is often the case for incentives that focus on capital
expenses but leave out operational costs, or for funding that is too prescriptive interms of supported applications/technologies, or too strict on the timelines of the
major project milestones (Front-End Engineering and Design [FEED],
commissioning, etc.). While this approach may involve a lower level of government
intervention, it may still benefit from some level of government co-ordination ofactivities.
The United States and European Union tend to follow this approach for
deploying CCUS projects, relying on incentives (i.e. tax credits and grants) andpenalties (i.e. carbon pricing) to drive investment in CCUS.

Shared cost allocation approach
In a shared cost allocation approach, governments do not solely rely on the market
to incentivise private sector decision-making. For some capital-intensive activities
with unclear revenue streams (such as the development of electric grid
infrastructure), governments have stepped in to ensure a viable business case forthese markets, offering to share the allocation of costs between the public andprivate sector. Under this approach, if the activity is provided by a privatecompany, economic parameters govern the revenue and profit structures of the
project, such as under a regulated asset base model. The shared cost allocation
approach may be a good fit for large infrastructure endeavours, such as thedevelopment of a CO2 transportation and storage network, but it also requires
more continued government support over a longer timeframe than grants or tax
credits, for instance. This is why it is crucial to design it as part of a long-term
decarbonisation strategy, going beyond the single election cycle and annual
government budget.
The United Kingdom is one example of this with its Transport and Storage
Regulatory Investment (TRI) model to build out CO2 transport and storage
infrastructure. The United Kingdom is also an example of a country that has
moved along the spectrum for CCUS policy approaches: before the TRI proposal,
the United Kingdom relied more on the incentive- or penalty-based approach, andnow it is also employing a shared cost allocation approach. The United States isalso starting to use this approach, though to a much lesser extent, under its sharedaccess requirements in the USD 2.1 billion CIFIA loan programme for CO2transport projects.

Full control approach

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Instead of relying on the private sector to develop a market, the full control
approach leans on a country’s state-owned enterprise (SOE) system. In thecase of CCUS, this means that SOEs are not only investing in CCUS projects, but

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Chapter 5: A policy toolkit

could also develop and operate them. The advantages of this approach are thatthe government is better able to control the number of CCUS projects that are
deployed and to overcome potential investment and financing challenges thatprivate firms may face. However, this approach relies heavily on internal expertiseat state-owned companies, which may act as a barrier to initial deployment. Thisapproach still relies on some level of private sector involvement, whether throughjointly developing projects, or as a customer or investor.
China, Saudi Arabia, Qatar and the United Arab Emirates are examples of thisapproach, where the vast majority of CCUS projects in operation and underdevelopment are through an SOE. Despite this, there is still some level ofinvolvement from private companies, depending on the country.

How can policy effectively and efficiently
tackle existing gaps and challenges?
Governments have several policy tools at their disposal and can take a number ofapproaches with varying levels of government intervention to address challenges
to CCUS deployment.
Chapter 2 shows that existing policies also leave gaps that fail to address key
challenges for CCUS, such as a lack of diverse revenue streams, low demand for
low-emissions products, and a lack of standards and certifications for carbon
dioxide removal (CDR) solutions. Chapter 4 further expands on the gaps where
policy is lacking and outlines four main challenges for future CCUS deployment:
economic viability, lead times, innovation and project complexity.
Governments are also testing new policy tools to address these gaps andchallenges, and in some cases are drawing on lessons learned from other partsof the energy sector. Policy makers do not need to use every tool, and in fact sometools on their own will not be enough, but should instead evaluate which tool (ormore likely, which combination of tools) will work best in their jurisdictions.
It is important that any tool or approach is both effective and efficient, setting up a
viable and sustainable commercial market for CCUS that attracts investment andretains it over the long term.

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Effective policies for CCUS work to address the variety of challenges facing
projects. They allow private sector investment to flow into projects without creatinga restrictive regulatory environment or allowing for excessive private profits from
taxpayer-funded programmes. A balance must be struck between stimulating
investment and achieving policy goals, while being mindful of not over-regulatinga new commercial market. Ultimately, governments need to assess the level ofrisk they are willing to take on. This applies both in the sense of traditional projectCCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

and financing risks, but also the risks associated with ineffective policies. A
balance needs to be struck to ensure publicly funded efforts deliver value fortaxpayers: too stringent and prescriptive a policy may result in lock-in of specifictechnologies or approaches; yet too unclear a policy may result in confusion andlack of adoption.
Efficient policies have a two-way flow of benefits that not only help CCUS, but also
other clean energy technologies. For example, policies that target challenges to
CCUS deployment – such as reforming permitting to reduce lead times or the coordination of hub infrastructure – can have knock-on benefits for other clean
energy technologies. Likewise, policies that target other clean energy
technologies – such as renewable energy deployment and transmission
infrastructure build-out – can have knock-on benefits for CCUS, particularly fordirect air capture (DAC) projects that may rely on low-emissions sources ofelectricity.

Conclusions
Enabling legislation and rules (such as the establishment of legal and regulatory
frameworks) and cost reduction measures (such as grants, tax credits, loan
support and SOEs) have helped projects in operation today. This has had an
impact on deployment, specifically in the types of applications. For example, lowcost applications such as natural gas processing currently make up the majorityof CCUS deployment. But in order to decarbonise other sectors and scale up
CCUS at the pace needed in the NZE Scenario, we need a portfolio of options toaddress the challenges we are seeing today.
Policy support is needed across all categories. Further support in enabling
legislation and rules can help to address lead times and project complexity
challenges. Expanded regulation of industrial activities and revenue support
policies can address economic viability challenges. And international collaboration
can cover cross-cutting issues that cannot be addressed by one single country.

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As mentioned earlier, governments may shift their approach (incentive- or penaltybased, shared cost allocation, full control) as the CCUS market develops. This
follows through for some of the tools that governments choose to use. For
instance, policy tools for cost reduction measures (such as grants, tax credits andloans) may help bring down the cost of large-scale projects and help addresssome of the initial cost challenges to get projects off the ground. But these tools
alone cannot create an economically sustainable commercial market for CCUS.
Governments should turn to other policy tools to address all the challenges
associated with CCUS deployment and ensure that investment continues to flow
into CCUS projects, and these projects are completed on time.

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Chapter 5: A policy toolkit

While governments may choose to use certain policy tools at different stages ofmarket maturity, the simultaneous use of several tools to address the array ofchallenges is the most effective way to drive investment. Governments should finda balance – this is the best way to ensure sustained investment and the timely rollout of CCUS projects.
Policy tools to address challenges to CCUS deployment
Challenge

Policy categories toaddress challenge
Cost reduction measures

Economic
viability

Regulation of industrial
activities
Revenue support
International collaboration

Lead times

The innovation
gap

Project
complexity

Enabling legislation andrules

Cost reduction measures
International collaboration
Enabling legislation and
rules
Strategic signalling
International collaboration

Specific policy tools
GrantsTax credits
Loan support
State-owned enterprises
Carbon pricing and leakage policy
Public procurement
Low-emissions mandates(Carbon) contracts-for-difference
Regulated asset base
Emerging market and developing economy
considerations: concessional finance, sustainable debt,
and multilateral funding instruments
One-stop shop for permitting
Clear permit approval timelines
Internal regulatory capacity
Precompetitive resource assessments
Data sharing and transparency requirements
Community engagement requirements
RD&D
Platforms for international co-operation
Foreign direct investment for technology codevelopment
Long-term storage liability
Competitive solicitations for CCUS hubs
One-off backstop agreements for first movers
London Protocol specifications
Definition of high-quality removals
Robust measurement, reporting and verification
mechanisms

Enabling legislation is necessary to establish a legal
foundation for CCUS…
As Chapter 2 outlines, enabling legislation and rules facilitate CCUS deployment,
rather than promote. This often involves the establishment of legal and regulatory
frameworks for CCUS, which set a legal basis for CCUS activities, such asallowing for the geological storage of CO2 and putting in place measuring,monitoring and verifying requirements for the CO2 once it is stored. Legal andregulatory frameworks exist in over 20 jurisdictions around the world and havehelped contribute to a number of CCUS projects in operation today.

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In the IEA CCUS Handbook on Legal and Regulatory Frameworks, we identify 25priority legal and regulatory issues for CCUS deployment that are broadly grouped
into eight categories (defining the regulatory scope, environmental reviews andCCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

permitting, enabling first-mover projects, ensuring safe and secure storage,
addressing long-term storage liabilities, international and transboundary issues,
facilitating CCUS hubs, and other emerging issues).
Establishing a legal foundation for CCUS activities can help set the stage forgreater CCUS deployment and should therefore be considered as a priority forfacilitating deployment.

…yet more efforts on this front are needed to facilitate
projects
While legal and regulatory frameworks provide an initial baseline level of support,
more enabling legislation and rules are needed to facilitate CCUS projects. For
example, clarifications on long-term liability within existing frameworks canprovide more certainty to project developers, and permitting support, data
sharing and community engagement can help ensure projects are completed
on time and with the public’s support. In addition, strategic signalling, such as
through competitive solicitations, can increase co-ordination across industries.
These efforts do not necessarily require public subsidies, but rather changes inprocesses and increased co-ordination to address key challenges to CCUS
deployment. When combined, these policies can work to reduce long lead times
and project complexity challenges.

Long-term liability of stored CO2



A provision is made for the transfer of liability to the relevant authority. In this case,the operator is generally required to meet a number of stringent conditions toensure that there are negligible risks of future leakage before transferring liabilityof the storage site to the relevant authority.

Long-term liability explicitly rests with the operator. Monitoring and reporting
requirements remain in order to ensure safe and secure storage, though thefrequency of reporting requirements may vary.

Long-term liability is not explicitly addressed, with the implication that the operator
would retain responsibility for the storage site in perpetuity (in some cases, theoperator may be state-owned; therefore, the issue of transferring liability may notarise).

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To address project risks associated with the long-term storage of CO2 and reduce
project complexity challenges, it is important that governments have theprocesses and mechanisms in place to address long-term liability. Long-term
liability of stored CO2 can generally be addressed in one of three ways:

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Permitting support
Complicated planning and permitting regimes may put upward pressure on leadtimes. CCUS projects can span multiple regulatory jurisdictions, requiring project
developers to secure permits across different parts of national and sub-national
governments. In addition, approval timelines may not always be clear.
To address planning permitting shortfalls, governments can establish a one-stop
shop, whereby a single regulatory body or a cross-government co-ordinatinggroup is responsible for co-ordinating the planning and permitting process when it
involves different government agencies. This body could also offer guidance andsupport on how to navigate planning and permitting frameworks if a proposed
project involves multiple jurisdictions. Governments can also establish clear
permit approval timelines, requirements and guidance, with flexibility built into
regulations to give projects the opportunity to apply for application extensions. Thiscan enable developers to better plan project timelines and reduce regulatory
bottlenecks, though governments must find a balance between cutting regulatory
red tape while also maintaining proper environmental and societal considerations.
It is important that governments build regulatory capacity and provide regulatory
bodies with the necessary resources and capacity to oversee and undertake
permit approvals. This includes ensuring adequate funding, technical expertiseand staffing to review and process permit applications, as well as establishingchannels of communication across government agencies to ensure smooth coordination.
Governments are already taking steps to reduce permitting and licensing leadtimes. In the United States, injection well approvals could be reduced to around 2
years, and in the United Kingdom CO2 storage sites could be commissioned 4 to
6 years after the exploration license is awarded. In the European Union, reducing
permitting lead time for decarbonisation projects, including CO2 storage, is one ofthe objectives of the EU Net Zero Industry Act.

Data sharing and transparency
Part of the challenge of developing CCUS projects is the lack of adequate data forCO2 storage sites. Storage resources themselves can take between 2-6 years todevelop due to the resource assessment process and related study requirements.
As a result, resource assessment needs to begin well in advance of capture
project development.

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To address data shortfalls, governments can accelerate a region’s level of storage
readiness by conducting precompetitive resource assessments. As part of this,dedicated data acquisition programmes can include drilling, geochemical andhydrogeological studies, seismic campaigns and regional mapping. Country or
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Chapter 5: A policy toolkit

atlas, or a portfolio of resources earmarked for further assessment. Site-specificassessments can aim to develop one or more CO2 storage sites. Data sharing
and transparency efforts, such as working with the existing oil and gas industry,
can help. Governments will need to work with industry on the type and amount ofdata that should be made available, as some information may be considered
proprietary and confidential for competitiveness reasons.

Data sharing and transparency efforts for CO2 storage in the United
Kingdom and European Union
Data access and availability for CO2 storage resources are an importantcomponent for companies seeking to develop storage sites, not to mention that
increased data transparency can also help build public trust. The United Kingdom
and European Union are both making efforts on this front.
In the United Kingdom, the North Sea Transition Authority (NSTA), the country’s
CO2 storage regulator, requires storage license holders to retain and report
information and samples gathered as part of activities associated with thegeological storage of CO2. As part of this effort, the NSTA is allowed to publicly
disclose this information after a suitable confidentiality period. The goal of thispublic information campaign is to help maximise the United Kingdom’s CO2 storage
potential by enhancing the collective knowledge of the CCUS industry, allowing forbest practices to be shared in order to support the quick development of theindustry as a whole.
In the European Union, the proposed Net Zero Industry Act puts dual pressure
on member states and oil and gas companies to disclose data related to CO2
storage. The Act would require member states to publish “areas where CO2
storage sites can be permitted on their territory”, an important step to creating alarger, regional CO2 storage atlas. For oil and gas companies, the Act would
require the licensees of oil and gas production sites in the European Union to“make publicly available all geological data relating to production sites that havebeen decommissioned or whose decommissioning has been notified to thecompetent authority.”

Community engagement
It is vital that CCUS projects not only provide benefits in terms of emissions
reduction or removal, but also that they positively impact local communities. Public
opposition to CCUS projects can cause unforeseen delays, increasing costs andeven potentially resulting in the cancellation of a project.

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To increase stakeholder engagement, governments can encourage companies toengage project stakeholders early on in the project planning process. Engagement

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should not only involve a public consultation process, but also show how the local
project can benefit the community. Governments can do this through acommunity engagement requirement in the issuance of public funds for a
project. It is vital to receive public buy-in for projects and show community benefits
for CCUS projects.

Enabling social acceptance of CCUS by showing community benefits
CCUS projects are complex and often involve large infrastructure requirements,
passing through several communities and affecting a variety of stakeholders. For
onshore projects, this can include the installation of long-distance CO2 pipelines orstorage sites that cut across multiple residential, commercial and publiclandowners. Offshore projects tend to concern a smaller number of property
owners, but CO2 shipping lanes and offshore pipelines may have interactions withexisting maritime industries and activities.
Securing public buy-in to CCUS projects is not only vital to successful long-term
deployment, but it is also sensible business practice. Early engagement of thecommunities affected by a CCUS project can help mitigate potential opposition,
which has been shown to lead to the cancellation of large projects in extreme
cases.
For example, in the Netherlands, public opposition to Shell’s proposed CCUS
demonstration project in Barendrecht delayed the project’s implementation andcontributed to its eventual cancellation in 2010. Public opposition to the projectgrew over the course of several years, as unanswered initial concerns had a“snowball effect”, leading to an eventual distrust of the project.
More recently, in October 2023 the Heartland Greenway CO2 pipeline project in
the United States was cancelled due to “unpredictable” regulatory proceedings in
multiple states, fuelled in part by landowner opposition to the nearly 2 100 km
pipeline. The project, which was designed to transport up to 15 Mt CO2 per year
from dozens of ethanol plants for eventual storage in Illinois, faced permit approval
denials and delays in two states. In February 2023, the project restarted its permit
process in Illinois after its first attempt failed due to a lack of agreement withlandholders. In September, regulators in South Dakota denied the project’s permit
application, citing concerns about the pipeline’s safety and the company’stransparency, and a lack of support from landowners.

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Involving project stakeholders early on in the development process is a criticalcomponent of building social acceptance. Lessons can be drawn from Shell’s
Quest CCS project in Canada, which created a Community Advisory Panel madeup of local residents, members of the academic community and representatives
from local government and regulatory authorities. The panel continues to provide
a forum for stakeholders to provide input on the design and implementation of theCCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

project’s measuring, monitoring and verification plan. Elsewhere, the Tomakomai
demonstration project in Japan employed a sustained public engagement
campaign which contributed to the project’s success. The project developer,
JCCS, designed and conducted public outreach with the objective of ensuring that
local stakeholders in the city of Tomakomai (population 170 000) and surrounding
areas understood the project, the safety and security of CO2 storage, and the
purpose of CCUS.
In the United States, the Department of Energy (DoE) is requiring all projects tosubmit Community Benefits Plans in their applications for public funding under the
Infrastructure Investment and Jobs Act and the Inflation Reduction Act. The plans
are based on four policy priorities: workforce investment; community and labour
engagement; diversity, equity, inclusion and accessibility; and implementing a DoE
initiative to drive investment to disadvantaged communities. In most cases, theseplans are scored at 20% of the technical merit review of proposals for grants. Whenan applicant is selected, their Community Benefits Plan will be part of thecontractual obligation of the funding recipient.
In the European Union, the CCUS Forum Working Group on public perception
issued a paper in September 2023 that offers recommendations to the European
Commission as it finalises its Industrial Carbon Management Strategy. A core pillarof the recommendations is the role that governments have in promoting andfacilitating dialogue with the public on CCUS. This includes embracing acomprehensive approach to public engagement, integrating and involving
stakeholders proactively and early on in the process.

Competitive solicitations
CCUS projects are complex endeavours that need to be carefully managed andsupported by an equally thoughtful policy environment that addresses multi-level,
multi-sectoral challenges.
As outlined in Chapter 3, new business models for CCUS are introducing a partchain model where separate entities deal with CO2 capture and with CO2 transportand storage, leading to a greater need for co-ordination among the various stepsof the chain. The development of CCUS hubs across sectors also increases a
project’s complexity, impacting the risk structure of projects as it relates to crosschain, legal, market and social acceptability risks.

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Governments have a central role to play in the co-ordination and planning of hubs
– this will be a key part of reducing a project’s complexity. One way to co-ordinate
hub development is through competitive solicitations that encourage
collaboration across multiple sectors. These solicitations can be tied to publicfunding (as is the case in the United States and United Kingdom) or can be part

CCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkitof the government’s leasing process for CO2 storage resources (such as in theprovince of Alberta in Canada).
Governments can also reduce counterparty risks by providing assurances toprojects either through one-off backstop agreements with specific projects or
through structural designs within policies. For example, the Norwegian
government has agreed to bear the risk in the Longship project in the event thatpart of the value chain does not perform its contractual obligations. However, thisbackstop is currently only intended for the Longship project. In contrast, the United
Kingdom has designed its regulatory asset base model to ensure that the CO2transport and storage provider can still receive revenue in the event that a CO2
capture project cannot perform. Likewise, the United Kingdom’s dispatchable
power agreement model proposes an availability payment to the power generator
even if the transport and storage network is not available.

Cost reduction measures can incentivise large-scale
projects…
Existing policies and measures to reduce costs have contributed to operational
CCUS projects to date. For example, grants have provided funding to cover someof the upfront costs associated with early CCUS projects, which tend to carry ahigher risk than subsequent projects. The European Union’s Innovation Fund andthe United States’ large-scale demonstration project funding under the
Infrastructure Investment and Jobs Act are such examples. Grant support can beused to fund FEED studies, or even costs realised in the early years of the project(e.g. engineering, procurement and construction, commissioning, etc.). This binds
the government for a shorter period of time and allows the private sector todevelop more entrepreneurial opportunities.
In addition, governments have allowed CCUS projects access to certain tax
credits and loan support to spur CCUS activity. Finally, depending on the
country, governments have also leaned on their state-owned enterprise (SOE)system to shift some risk away from the private sector, indirectly reducing
investment costs.

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These cost reduction policies have, in part, proven effective at the start infunnelling investment to the early-mover, large-scale projects. In practice,
however, the deployment of operational projects has trended toward the lowestcost applications, such as natural gas processing. Experience has shown thatthese policies alone are insufficient to incentivise CCUS deployment in higher-cost
applications, such as iron and steel, biofuels, synthetic hydrocarbon fuels, andaluminium.

CCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit…but regulation of industrial activities and revenue
support are needed for projects to scale up
In addition to cost reduction measures, governments can turn to other policy
categories to build out support for CCUS. The regulation of industrial activities,
through carbon leakage policies, public procurement and mandates for lowemissions products can drive demand and incentivise long-term investment. In
addition, newer regulatory approaches to support revenue streams, such as
contracts-for-difference (CfDs) and regulated asset base (RAB) models, canincrease the business case for some projects.
Coupled together, these policies can work to address the economic viability
challenges faced by CCUS projects and incentivise the diversification of CCUS
deployment across applications at a pace and scale that is consistent withreaching net zero emissions by mid-century.

Demand for low-emissions products
The market demand for low-emissions products (such as low-emissions steel,cement or fuels) and services is currently not strong enough to drive investment.
Governments can step in and spark demand through public procurement
policies and low-emissions mandates, which can increase the economic viabilityof low-emissions products.
We are already seeing some governments look at using public procurement
policies to enable an initial uptick in demand for low-emissions products, including
embodied carbon targets for new buildings in France, the Buy Clean Initiative in
Canada, the Buy Clean Executive Order and Taskforce in the United States andaccompanying procurement of low embodied carbon materials for construction,
and Japan’s GX League. In 2021 the Industrial Deep Decarbonisation Initiative
launched the Green Public Procurement Pledge to encourage the public
procurement of low-emissions steel and concrete. In addition to low-emissions
products, the United States is also examining how to use public procurement toincrease the CDR market. The US DoE announced USD 35 million in September
2023 to purchase offtake agreements for a portfolio of CDR pathways consistent
with the objectives set out in its Carbon Negative Shot initiative.

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Low-emissions fuel standards or mandates can achieve a similar effect. The
Low Carbon Fuel Standard regulations introduced by California, Oregon andBritish Columbia (and under consideration in many other states and provinces)
attracts a significant premium for fuels that meet lower carbon intensity standards.
The same idea can be applied outside of low-emissions fuels and to low-emissions
materials and products.

CCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

Carbon pricing and leakage policies
A carbon tax or emissions trading scheme (ETS) can increase the economic
viability of a CCUS project by either avoiding a fee (as in the case of a carbon tax)
or through the selling of credits (as in the case of an ETS). As shown in Chapter
4, carbon prices between USD 40-60/t CO2 are required for CCUS-based routes
to breakeven with unabated routes for high-concentration applications, andbetween USD 80-170/t CO2 for diluted applications.
As shown in Chapter 2, carbon pricing programmes have been in place for years,
but have played a relatively minor role in incentivising the CCUS projects inoperation today. Low and often volatile CO2 prices are not enough to incentivise
long-term investment in CCUS projects. Coupled with policies to reduce the highcapital costs of projects, sustained high and predictable carbon prices send asignal to investors that can channel funding into projects in the long-term. For
example, Canada’s federal carbon pricing benchmark is set to gradually increase
from CAD 65 Canadian dollars (USD 50) per tonne of CO2-equivalent in 2023 to
CAD 170 (USD 130) per tonne in 2030.
The story is slightly different in voluntary carbon markets, where high prices are
incentivising investment in CDR technologies such as direct air capture andstorage (DACS). As highlighted in Chapter 3, in the absence of clarity on CDR
options in compliance markets, companies and emitters have been turning tovoluntary carbon markets to purchase CDR credits. Companies are using thesevoluntary markets to meet their growing net zero commitments, and voluntary
markets are fuelling most DACS projects today. As CDR technologies gainincreased attention from both the public and private sectors, specificconsiderations will be needed to incorporate them into government-led
compliance markets (see more in International Collaboration).

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For jurisdictions with a carbon pricing system, low-emissions products can beprotected against emission-intensive and cheaper imported goods by regulations
such as a carbon leakage policy. One such example of a carbon leakage policy
is a carbon border tax, also referred to as a carbon border adjustment mechanism(CBAM). Under this policy, an import tariff based on the carbon price is placed oncarbon-intensive goods. By assigning an import tariff to these goods, this policy
aims to level the playing-field with imports from other jurisdictions with lessstringent emissions regulations and reduce the risk of companies leaving thecarbon pricing jurisdiction (otherwise known as carbon leakage). It is crucial thatthe policy is designed in such a way that it promotes a just energy transition andcontinues to facilitate international trade. Negotiations with other countries will bea key aspect in this regard in order to align reporting requirements and prevent
potential high compliance costs. The European Union applied the transitional
phase of its CBAM in October 2023, and other countries (such as the United

CCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

States, Canada, the United Kingdom and Japan) have considered or are currently
considering a similar policy.

Structured revenue streams
A lack of revenue streams for CCUS projects directly impacts their economic
viability. Based on successful policies in other sectors, two approaches are being
used today to fill this revenue stream gap: a regulated asset base (RAB) model,
and a contract-for-difference (CfD) or carbon contract-for-difference (CCfD)
model. The United Kingdom is testing both approaches for different parts of thevalue chain.
The RAB model has been useful in supporting the build-out of network
infrastructure in the energy sector, such as for electricity grids and oil and natural
gas pipelines, and could now work for CO2 transport and storage infrastructure.
Under the RAB, a company acts as a manager for public infrastructure: it owns,
invests in and operates infrastructure assets. In return, the government provides
an opportunity for the company to recover its investments by establishing a set
rate of return.
The contracts-for-difference model has been used as a means to increase thedeployment of large-scale renewable energy projects, and could be applied to CO2
capture projects as a way to provide revenue certainty. Under a CfD or CCfD,
payments are made to CCUS projects based on the difference between the“reference price” (e.g. the price of electricity for a CfD or the carbon price for a
CCfD) and a “strike price” (an amount previously agreed upon by the government
and the project). Projects receive payments when the reference price is below the
strike price, and inversely, when the reference price exceeds the strike price, theproject must pay the government the prevailing difference.

International collaboration can address cross-cuttingareas
It is clear that no one country can accomplish large-scale CCUS deployment
across multiple applications on their own. In order to reach global net zero
emissions by 2050, a truly global effort on CCUS deployment needs to be on theagenda. International collaboration on CCUS can cut across several areas,
including innovation, cross-border storage of CO2, CDR considerations anddeploying CCUS in emerging markets and developing economies (EMDEs).

Innovation

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The technology maturity of CCUS varies considerably by sector and application.
Several technologies in CO2 capture, transport, utilisation and storage are alreadyCCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

deployed at large scale, but in other applications – including those that hold thepromise of better performance and lower unit costs – further development isrequired.
As shown in Chapter 4, applications which are mature today are also notnecessarily the ones consistent with a net zero energy system (e.g. capture on
natural gas processing plants). Indeed, around three-quarters of capture capacity
by 2050 in the NZE Scenario relies on technologies and applications that are stillat demonstration or prototype scale. As such, governments should focus
innovation efforts on applications that are still at demonstration or prototype scale.
These innovation gaps need to be addressed with urgency to ensure that thetechnologies and applications are in place for large-scale roll-out after 2030.
Of course, cost reduction efforts such as research, development anddemonstration (RD&D) funding are a core part of a government’s toolkit foradvancing CCUS innovation. Efforts should focus on technologies with a low
technology readiness level (TRL) that are relevant to reach net zero emissions by
2050, such as CDR technologies and applications in heavy industry. Governments
can encourage diversity and competition within RD&D funding as to not lock in
certain solutions.
Governments are in a unique position to advance innovation, and maintaining
open collaboration on the international level is necessary in order to ensurethat the gains are shared equally. Countries with smaller RD&D budgets canbenefit from increased international collaboration and knowledge-sharing. Existing
platforms and initiatives, such as Mission Innovation, the Clean Energy Ministerial
CCUS Initiative, and the Accelerating CCUS Technologies (ACT) programme canprovide an important foundation for RD&D collaboration.
In addition to these initiatives, individual governments can facilitate technology codevelopment opportunities to funnel innovation to EMDEs. Existing foreign direct
investment programmes can provide an avenue to facilitate technology codevelopment in EMDEs.

Cross-border storage of CO2
As shown in Chapters 1 and 3, CCUS projects in development now increasingly
follow a ‘’many-to-many’’ deployment model, where capture projects aredeveloped as part of CCUS hubs that consist of shared transport and storage
infrastructure connecting multiple emitters. When CO2 is captured in one country
and stored in another, this can trigger international obligations under the London
Protocol.

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According to the International Maritime Organization (IMO), contracting and noncontracting parties to the Protocol are required to co-operate to ensure

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Chapter 5: A policy toolkit

information-sharing on the characterisation of the geological formation, storage
integrity and potential migration and leakage pathways, among other areas.
Obligations under the London Protocol

London Protocol status of country
capturing CO2 for export

London Protocol status of country receiving CO2 for offshore storage
Contracting party

Non-contracting party

Contracting
party (CP)CPs must deposit a declaration ofprovisional application of the 2009amendment with the IMO. CPs must
establish an agreement or arrangementthat includes “confirmation and allocationof permitting responsibilities, consistent
with the provisions of the protocol andother applicable international law”. This
includes reference to the CO2 specificguidelines’ conditions related to thecomposition of CO2 streams and CO2
storage permitting. The IMO must be
notified of these agreements or
arrangements.

Noncontracting
party (nonCP)

CPs must establish an agreement or
arrangement with the non-CP and notify
the IMO of this. CPs must ensure that theCO2 received is “overwhelmingly”
comprised of CO2 and that the exporting
country demonstrates appropriate
consideration of incidental associatedsubstances in the CO2 stream, withtreatment if needed.

The exporting CP is accountable forcompliance with the provisions of the
protocol. The CP must establish an
agreement or arrangement with the
non-CP that, at a minimum, provides
the same environmental protections
as if the CO2 were being stored by aCP. This includes the issuing of
permits and permit conditions.
In the case of a breach of theagreement or arrangement by the
non-CP, the CP should “engage in
consultations to rectify”. In the caseof a “significant ongoing breach”, theCP is required to “terminate theexport”.

Not governed by the protocol; may
be subject to United Nations
Convention on the Law of the Sea.

Source: IEA (2022), Legal and Regulatory Frameworks for CCUS

Carbon dioxide removal considerations
To date, regulations tend to focus on emission reduction and not removal. As
noted earlier, strong demand in voluntary carbon markets (VCMs) for CDR options
is driving much of the interest seen today. Likewise, governments are considering
how to incorporate CDR technologies in existing regulations, such as carbon
pricing programmes.

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One of the main challenges for governments is to define what a high-quality CDR
option looks like, and initial attempts are emerging. This is based on several
criteria: quantification (what is a reasonable deployment level), additionality (isthe CDR approach additional to already ongoing efforts), permanence (how long
will the CO2 be sequestered), sustainability (what are the associated land andwater requirements) and negativity (is the CDR approach carbon negative).
Robust measurement, reporting and verification (MRV) mechanisms are needed
to make sure CDR approaches are indeed providing climate benefits. MRV
mechanisms for CDR will be key to incorporating high-quality CDR options into
carbon pricing programmes, also called compliance markets.

CCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

The first methodologies for claiming carbon credits through VCMs are emerging
through initiatives such as Puro.earth and CCS+. Puro.earth’s Puro Standard was
the first carbon removal standard for CDR technologies in the VCM. Climeworks
and Carbfix, who are jointly developing the Orca DACS project, announced theirintention to work with Puro.earth in certifying removal credits. The CCS+ Initiative
aims to develop methodologies for issuing credits from CCUS activities (including
CDR) and make them publicly available under Verra’s Verified Carbon Standard.
Although these methodologies apply only to issuance of credits in VCM, theSupervisory Body of the Article 6.4 mechanism of the Paris Agreement may
consider them for approval or as a basis for further methodology development.
Public initiatives are also starting. The United Kingdom’s Greenhouse Gas
Removal business model proposal is defining criteria for a “negative emission”
and principles that will guide the government’s approach to MRV of removal
technologies. In addition, the Carbon Removal Certification Framework in theEuropean Union proposes to establish a regulation to facilitate high-quality
removals based on four overarching criteria for which detailed methodologies will
be developed: quantification, additionality and baselines, long-term storage, andsustainability.
As more countries and regions start to develop their own definitions, there is astrong need for international alignment, in both voluntary and compliance markets.
International initiatives, such as the Mission Innovation (MI) CDR Mission, areworking to develop certification and accounting standards. In 2022, the initiative
released an action plan that identified MRV of removals as a top-priority area andcalled for the creation of a new “CDR MRV working group” within the MI CDR submission.

Emerging markets and developing economies
As shown in Chapter 1, the relatively low number of CCUS projects indevelopment in EMDEs represents a major hurdle to achieve net zero emissions,
given that EMDEs have large stocks of young emissions-intensive power plants
and industrial facilities. While around one-third of CO2 capture capacity currently
in operation is located in EMDEs, this increases to approximately 50% by 2030
under the NZE Scenario. Increasing CCUS deployment in EMDEs can not only
help some address their climate mitigation goals, but also work to achieve energy
security and economic growth outcomes.

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In the IEA CCUS Handbook on CO2 Storage Resources and Their Development,
we put forward a checklist for governments, particularly in EMDEs, that areinterested in getting started on developing their CO2 storage resources. This list iscentred around six key points (national CCUS focal point, international support,

CCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

CO2 storage assessment project team, national human capacity, data, and CO2
storage assessment) and offers recommendations on the next steps.
In practice, most EMDEs will not be able to complete these tasks on their own,
pointing to a vital need for international support. Mobilising capital andknowledge-sharing on a large scale will require a dramatic increase in the role ofthe private sector, and an enhanced role for international and development financeinstitutions will be critical to catalyse this investment.
For example, concessional or climate finance can be used strategically tomobilise private capital in support of CCUS. Concessional funds can include
guarantees, senior or subordinated debt or equity, performance-based incentives,interest rate or swap cost buydowns, viability gap funding or other investment
grants. Sustainable debt could also help to fund CCUS investment. While green
bonds based on use of proceeds may not be available to all projects, performancebased instruments could facilitate CCUS investments, based on their emissions
reduction potential. China updated its green bond standards to include CCUS in
2020.
Multilateral development banks have played an important role in supporting thedevelopment of enabling environments for CCUS in EMDEs through trust funds.
For example, the World Bank CCS Trust Fund, funded by the United Kingdom and
Norway, was established in 2009 and has allocated over USD 55 million to CCUS
programmes in a dozen countries and regions. In addition, the Asian Development
Bank’s CCS Fund, which has since closed, was established in 2009 to support
storage resource assessments, CCUS piloting and demonstration in Southeast
Asia and China.
Unless a new instrument is established – with the World Bank’s fund set to closein 2024 – there will no longer be any dedicated multilateral development bankfunding instrument to support the development of CCUS-enabling environmentsor piloting. This represents a major gap in international funding support for CCUS
in EMDEs, as most typically rely on some level of multilateral development funding
to perform technical assistance studies that underpin the development of legal andregulatory frameworks and CCUS policies. Given that in the NZE Scenario
approximately one-half of all CO2 capture capacity is located in EMDEs by 2030,
up from one-third today, further and immediate support is needed. Grants andloans from development and climate finance institutions, emissions credit
mechanisms and climate-related debt financing could all be applied to CCUS
projects.

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Some other existing multilateral funding instruments for EMDEs could apply to
CCUS, such as the Green Climate Fund; however, no CCUS activities have been
funded to date.

CCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

A policy toolkit
Building a commercial market for CCUS is no easy task: it requires addressing
multiple economic, lead time, innovation and complexity challenges. However,these challenges are not unsurmountable, and overcoming them is entirely
possible with the right policy environment and investment from industry.
Governments are uniquely positioned to create this policy environment, and how
they approach building it will depend on several institutional, economic andpolitical factors. Whether the approach is through incentives or penalties that try
to guide company investment, sharing cost allocation to provide greater revenue
certainty, or fully controlling aspects of deployment through state-owned
enterprises, governments can employ different approaches that fit their specificneeds.
To fine-tune their approach, governments have at their disposal a set of policy
tools to tackle the overarching challenges to CCUS deployment. These tools forma broader toolkit that comprises enabling legislation and rules, cost reduction
measures, regulation of industrial activities, strategic signalling and revenue
support.

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Governments can use these policy tools to create the conditions necessary forsustained investment, but at the end of the day it is the responsibility of industry
to take the next step forward and push forward CCUS into a viable and sustainable
commercial market.

CCUS Policies and Business Models: building a commercial market

Chapter 5: A policy toolkit

A policy toolkit for CCUS

Policy approaches for CCUS deployment
There is no one single approach to building a commercial market for CCUS. Various approaches should be thought of as existing on aspectrum: incentive- or penalty-based, shared cost allocation and full control approach.

Incentive- or penalty-based approach

Shared cost allocation approach

Full control approach

Policies to influence how a privatecompany will make its investment
decisions. This is either done withincentives (e.g. grants, loans or tax
credits) to private companies to deploy acertain technology or adopt a certain
practice, or with penalties (e.g. taxes orfees) for not complying with regulations.

Economic parameters govern the costand revenue structures of a company,
which is shared between the public
and private sectors. This approach
may be well suited for large
infrastructure endeavours, such as thedevelopment of a CO2 transportationand storage network.

Instead of solely relying on the private
sector to develop a market, this approachleans on state-owned enterprises tofinance, build, own and operate projects.
It may still rely on some level of private
sector involvement, whether it is throughjointly developing projects, as a customer
or as an investor.

Level ofgovernment
intervention

Approaches

Institutional, economic and political factors will influence what part of the CCUS policy spectrum a country may end up on, and countries
may move along the spectrum as these factors change and as the domestic market for CCUS matures. Where a country sits on the
spectrum may impact the types of policy tools that it chooses to use.

Low intervention

High intervention

Policy toolkit to address CCUS challenges
Governments have several policy tools to address challenges to CCUS deployment. It is important that these tools work together totackle economic viability, lead time, innovation and complexity challenges.

Challenges

Whatever tools a government chooses to employ will be unique to that country, but it is vital that the tools are effective and efficient, setting up
a viable and sustainable commercial market for CCUS that attracts investment and retains it over the long term.

Economic viability

Lead times

Innovation gaps

Project complexity

Absent any policy support, theeconomic viability of a CCUS projectis a major barrier to wide-scale
deployment. High costs and a lack ofrevenue streams for projects directly
impact a project’s economic viability.

Lead times (i.e. the total
time required between a
project’s conception andcommissioning) currently
average around six years.
Reaching net zero goals
hinges on cutting theselead times.

The technology maturity of
CCUS varies considerably bytechnology
typeand
application. Technologies which
are mature today are also notnecessarily the ones consistent
with a net zero energy system.

The shift to a hub modelmeans a complex project
structure, with implications forrisk, timing and co-ordination.
Special considerations arealso needed for carbon
dioxide removal technologies.

 Grants, tax credits, loans One-stop shop for
permitting Research,development anddemonstration

 Long-term liability
legislation

 State-owned enterprises

Policy tools

 Carbon pricing and leakage
policy Public procurement
 Low-emissions mandates (Carbon) contracts-fordifference Regulated asset base Emerging market anddeveloping economy
considerations: concessional
finance, sustainable debt,
multilateral funding instruments

 Clear approval
timelines Internal regulatory
capacity Precompetitive
resource assessments
 Data sharing andtransparency
 Community
engagement
requirements

 Platforms forinternational cooperation
 Foreign direct
investment fortechnology codevelopment

 Competitive
solicitations for hubs One-off backstop
agreements for firstmovers London Protocol
specifications
 Definition of highquality removals
 Monitoring, reportingand verification
mechanisms
IEA. CC BY 4.0.

CCUS Policies and Business Models: building a commercial market

General annex

General annex
Annex A: Large-scale CCUS operating
projects, 2023
Project
type

Construction
Sectortype

Abu Dhabi CCS Phase 1: United ArabEmirates Steel Industries Emirates

Full-chain

Retrofit

Estimated
Operation
capacityyear(Mt/yr)Iron and steel 2016
0.8

Alberta Carbon TrunkLine (ACTL) (ALB)

Transport

New

CO2 transport 2020

14.6

Arcelor LanzaTech
Belgium
Carbalyst (Steelanol)
Ghent
Arkalon CO2 Compression United States
Facility (KS)CCU

Retrofit

Iron and steel 2022

0.1

Full-chain

Retrofit

Bioethanol

2009

0.3

Bonanza BioEnergy
CCUS (KS)United States

Full-chain

Retrofit

Bioethanol

2012

0.2

Boundary Dam CCS(SASK)

CanadaFull chain

Retrofit

Power (coal)

2014

1.0

Century plant (TX)

United States

Full-chain

New

Natural gas
processing

2010

4.3

Changling Gas plant /Jilin China
Oil Field CO2-EOR Fullscale (Jilin)
China Energy Taizhou
Chinapower (Jiangsu)

Full-chain

New

Natural gas
processing

2018

0.6

CaptureRetrofit

Power (coal)

2023

0.5

China Energy Guohua
Jinjie Power (Shaanxi)

China

Full-chain

Retrofit

Power (coal)

2021

0.2

Climeworks Orca

IcelandFull-chain

New

Direct Air
Capture

2021

0.004

Clive CO2-EOR (ACTL)(ALB)

CanadaStorage

New

CO2 EOR

2020

1.1

CNOOC Enping offshore China
CCS (Hong Kong)

Full-chainNew

Oil and gas
extraction

2023

0.3

Coffeyville fertiliser Plant United States(KS)

Full-chain

Retrofit

Fertiliser

2013

0.9

Core Energy CO2-EOR
United States
South Chester plant (MI)Full-chain

Retrofit

Natural gas
processing

2003

0.4

Enid fertiliser (OK)Full-chain

New

Fertiliser

1982

0.7

Project nameCountry

CanadaUnited States

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Large-scale CCUS operating projects, 2023

CCUS Policies and Business Models: building a commercial market

General annex

Country

Project
type

Construction
Sectortype

Global thermostat
headquarters plant (CO)United States

CaptureNew

Direct Air
CaptureGorgon CCS

Australia

Full-chain

New

Natural gas
processing

2019

4.0

Great Plains Synfuel Plant United States(ND) Weyburn-Midale(SK)
Horizon H2 capture
Canadatailings CCS (ALB)

Full-chain

Retrofit

Coal-to-gas

2000

3.0

CCU

Retrofit

Refining

2009

0.4

Illinois Industrial Carbon United States
Capture and Storage (IL)Full-chain

Retrofit

Bioethanol

2017

0.5

Jiling Petrochemical
China
CCUS (Nanjing refinery)(Jiangsu)
Karamay Dunhua
China
methanol plant (Xinjiang)

Full-chain

Retrofit

Coal-to-liquids 2023

0.1

Full-chain

Retrofit

Chemicals(methanol)

2015

0.1

Labarge Shute Creek Gas United States
Processing Plant 2010
expansion (WY)Labarge Shute Creek Gas United States
Processing Plant original(WY)
Lost Cabin Gas Plant
United States
extension (WY)

Full-chain

Extension

Natural gas
processing

2010

3.5

Full-chain

New

Natural gas
processing

1986

3.5

Full-chain

Retrofit

Natural gas
processing

2013

0.9

Mikawa Power Plant
BECCS Fukuoka
Prefecture
MOL Szank field CO2
EOR

Japan

CaptureRetrofitPower(bioenergy)

2020

0.2

Hungary

Full-chain

Retrofit

Natural gas
processing

1992

0.2

NWR CO2 Recovery Unit Canada(Sturgeon Refinery)(ACTL) (ALB)PCS Nitrogen-Geismar
United Statesplant (LA)CaptureNew

Refining

2020

1.3

Full-chain

Retrofit

Fertiliser

2013

0.3

Petra Nova Carbon
Capture (TX)

United States

Full-chain

Retrofit

Power (coal)

2016-2020, 1.4
2023

Petrobras Santos Basinpre-salt oilfield CCS

BrazilFull-chain

New

Natural gas
processing

2013

8.7

Qatar LNG

Qatar

Full-chain

New

Natural gas
processing

2019

2.1

Quest (ALB)

CanadaFull-chain

Retrofit

Refining

2015

1.1

Red Trail Energy BECCS United States
Project (ND)

Full-chain

Retrofit

Bioethanol

2022

0.2

Shell heavy residue
Netherlands
gasification CCU - Pernis
refinerySinopec Nanjing
China
Chemical Industries
CCUS Cooperation
Project (Jiangsu)

CCU

Retrofit

Refining

1997

0.4

Full-chain

Retrofit

Chemicals(other)2021

0.2

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Estimated
Operation
capacityyear(Mt/yr)2023
0.001

Project name

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Estimated
Operation
capacityyear(Mt/yr)2022
1.0

Project nameCountry

Project
type

Construction
Sectortype

Sinopec Qilu
Petrochemical Shengli(Shandong)
Sleipner

China

Full-chain

Retrofit

Fertiliser

NorwayFull-chain

New

Natural gas
processing

1996

1.0

Snøhvit CO2 capture and Norway
storage

Full-chain

New

Natural gas
processing

2008

0.7

Terrell Natural Gas
United States
Processing Plant (former
Val Verde) (TX)
Uthmaniyah CO2-EOR
Saudi Arabia
demonstration

Full-chain

New

Natural gas
processing

1972

0.5

Full-chain

Retrofit

Natural gas
processing

2015

0.8

Valero Port Arthur
Refinery (TX)

United States

Full-chain

Retrofit

Refining

2013

0.9

WCS Redwater CO2
Recovery Unit (formerly
Nutrien) (ACTL) (ALB)
phase 1

CanadaCaptureRetrofit

Fertiliser

2019

0.3

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Note: Large-scale refers to a capture capacity equal to or above 100 000 t CO2/yr (or 1 000 for direct air capture
applications).
Source: IEA (2023), CCUS Projects Database.

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Annex B: Principal capture technologies
Chemical absorption of CO2 is a common process operation based on thereaction between CO2 and a chemical solvent (such as compounds ofethanolamine). This operation is usually performed using two columns, one for theabsorption and the other operating at a higher temperature, releasing pure CO2
and regenerating the chemical solvent for further operation. Chemical absorption
using amine-based solvents is the most advanced CO2 separation technique (TRL
7-11). 19 It has been widely used for decades and is currently applied in a numberof small- and large-scale projects worldwide in power generation, fueltransformation and industrial production.
Physical separation of CO2 is based on either adsorption, absorption, cryogenic
separation, or dehydration and compression. Physical adsorption makes use of asolid surface (e.g. activated carbon, alumina, metallic oxides or zeolites), while
physical absorption makes use of a liquid solvent (e.g. Selexol or Rectisol). After
capture by means of an adsorbent, CO2 is released by increasing temperature(temperature swing adsorption [TSA]) or reducing pressure (pressure swing
adsorption [PSA] or vacuum swing adsorption [VSA]). Physical separation iscurrently used mainly in ammonia, methanol, and high value chemical production,and coal with CCUS processing, with numerous large plants in operation (TRL 79). They typically employ proprietary solvents, VSA or cryogenic separation
techniques.
Oxy-fuel separation involves the combustion of a fuel using nearly pure oxygen
and the subsequent capture of the CO2 emitted. Because the flue gas is composedalmost exclusively of CO2 and water vapour, the latter can be removed easily bymeans of dehydration to obtain a high-purity CO2 stream. Typically, oxygen is
produced commercially via low-temperature air separation, which is energyintensive. Lowering the energy consumption of this step and of the overall oxyfuel process are, therefore, key factors in reducing capture costs. Advanced
concepts with potential for cost reduction include oxy-fuel gas turbines (usedwithin supercritical CO2 power cycles) and pressurised oxy-fuel CO2 capture, bothof which make more efficient use of materials and are thus potentially cheaper tobuild and operate. The technology is currently at the large prototype or predemonstration stage (TRL 5 to 7). A number of projects have been completed incoal-based power generation and in cement production. While in conventional
thermal power plants, flue gas or steam is used to drive one or multiple turbines,

For further information on the IEA Technology Readiness Level (TRL) scale, please refer to the ETP Clean Energy
Technology Guide.

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in supercritical CO2 power cycles, supercritical CO2 (i.e. CO2 above its criticaltemperature and pressure) is used instead. Supercritical CO2 turbines typicallyuse nearly pure oxygen to combust the fuel, in order to obtain a flue gas composedof CO2 and water vapour only (TRL 5-6).
Membrane separation is based on polymeric or inorganic devices (membranes)
with high CO2 selectivity, which let CO2 pass through but act as barriers to retain
the other gases in the gas stream. Their TRLs vary according to the fuel andapplication. In natural gas processing, they are mainly at the demonstration stage(TRL 5-7). Membranes for CO2 removal from syngas and biogas are alreadycommercially available, while membranes for flue gas treatment are currently
under development.
Calcium looping is a technology that involves CO2 capture at a high temperatureusing two main reactors. In the first reactor, lime (CaO) is used as a sorbent tocapture CO2 from a gas stream to form calcium carbonate (CaCO3). The CaCO3
is subsequently transported to the second reactor where it is regenerated,
resulting in lime and a pure stream of CO2. The lime is then looped back to thefirst reactor. Calcium looping technologies, currently at TRL 7, have been tested,mostly at the pilot plant scale, for coal-fired fluidised bed combustors and cement
manufacture.
Chemical looping is a similar two-reactor technology. In the first reactor, small
particles of metal (e.g. iron or manganese) are used to bind oxygen from the air toform a metal oxide, which is then transported to the second reactor where it reacts
with fuel, producing energy and a concentrated stream of CO2, regenerating the
reduced form of the metal. The metal is then looped back to the first reactor.
Chemical looping technologies have been developed by academia, researchorganisations and several companies, including manufacturers operating in the
power sector. This has led to the development and operation of numerous pilot
projects (TRL 4-5).

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Direct separation involves the capture of CO2 process emissions from cement
production by indirectly heating the limestone using a special calciner (TRL 6-7).
This technology strips CO2 directly from the limestone, without mixing it with othercombustion gases, thus considerably reducing energy costs related to gas
separation.

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Annex C: CCUS cost metrics
The levelised cost of capture (LCC) calculates the average cost incurred perunit of CO2 captured over the lifetime of a capture project. It includes capital andoperational expenses associated with capturing CO2 from a point source, and canbe used to compare different CCUS approaches within and across sectors. This
metric can be added to the levelised cost of transporting and storing (or utilising)
CO2 to calculate the economic impacts of implementing CCUS in a given sector(levelised cost of capture, transport and storage (T&S), or capture, transport
and utilisation).
𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 (𝑈𝑈𝑈𝑈𝑈𝑈 𝑝𝑝𝑝𝑝𝑝𝑝 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝐶𝐶𝑂𝑂₂ 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐) = 𝐿𝐿𝐿𝐿𝐿𝐿 + 𝐶𝐶𝑂𝑂₂ 𝑇𝑇&𝑆𝑆 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐

The levelised cost of CO2 removal (LCR) refers to the economic expenditureneeded to deliver net CO2 removal from the atmosphere. This metric differs fromthe levelised cost of capture in the way it includes all lifecycle CO2 emissions to
calculate the technology’s net removal potential. Evaluating the cost of CO2
removal is essential in assessing the economic feasibility of different carbon
removal strategies.
𝐿𝐿𝐿𝐿𝐿𝐿 (𝑈𝑈𝑈𝑈𝑈𝑈 𝑝𝑝𝑝𝑝𝑝𝑝 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝐶𝐶𝐶𝐶₂ 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟) = 𝐿𝐿𝐿𝐿𝐿𝐿 𝑥𝑥

𝐶𝐶𝐶𝐶₂ 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐
𝐶𝐶𝐶𝐶₂ 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 − 𝐶𝐶𝐶𝐶₂ 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒

Metrics such as the levelised cost of electricity (LCOE), hydrogen (LCOH) or
materials (LCOM), calculate the lifetime costs of producing a certain end-productwith a given technology, with or without CCUS. They calculate the investment andoperation costs associated with the entire production process, in addition tocapturing, transport and storing the CO2.
The levelised cost of CO2 avoided (LCCA) quantifies the investment andoperational costs required to deliver a certain amount of net CO2 emissions
reduction. This metric differs from the LCC by considering any additional CO2
emissions incurred by the implementation of a decarbonisation solution. In thecase of CCUS this can be emissions associated with capturing, transporting or
storing CO2. With this metric the competitiveness of CCUS projects relative toother emission reduction strategies can be assessed. However, this metric isheavily affected by the baseline, which needs to be carefully selected and defined.

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𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿
𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 (𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑤𝑤𝑤𝑤𝑤𝑤ℎ 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐) − 𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿𝐿 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 (𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑤𝑤𝑤𝑤𝑤𝑤ℎ𝑜𝑜𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐)=
𝐶𝐶𝐶𝐶₂ 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 (𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑤𝑤𝑤𝑤𝑤𝑤ℎ𝑜𝑜𝑜𝑜𝑜𝑜 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐) − 𝐶𝐶𝐶𝐶₂ 𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 (𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑤𝑤𝑤𝑤𝑤𝑤ℎ 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑟𝑟𝑟𝑟)

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Annex D: Dashboard notes
CaptureProject pipeline
Data is sourced from the IEA CCUS Projects Database. The database available
for download contains projects updates as of February 2023. This report relies on
an internal version of the database with project updates as of Q2 2023, with the
exception of major project updates which include projects (re)entering operationor construction, which are included up to October 2023.

CaptureIncludes commercial-scale projects with a capture capacity over 100 000 t per
year (or 1 000 for direct air capture applications) with an announced operating
year by 2030. Capture projects for CO2 use are included as long as CO2 is usedin fuels, chemicals, polymers, building materials, or for yield boosting. Withinplanned industrial clusters, only identified CO2 capture projects are included (notthe full potential capture capacity of industrial clusters for which capture sources
are not specified). ‘’Under construction’’ also includes projects which havereached a final investment decision (FID) and for which construction is imminent.
Hydrogen only includes merchant hydrogen and ammonia plants.

Storage
Storage includes both dedicated CO2 storage and CO2-enhanced oil recovery(EOR). While most of the CO2 injected for EOR is retained in the reservoir overthe life of the project, additional monitoring and verification is required to confirm
that the CO2 has been permanently stored.

Transport
Current estimate of pipeline proposed in km is based on announced projects withdisclosed distances only.

Technology readiness
Data from the IEA Clean Energy Technology Guide, 2023.

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FCC = fluid catalytic cracker; FT = Fischer-Tropsch; L-DAC = liquid direct air
capture; PC = pulverised combustion; Pre-C = pre-combustion; SMR = steam
methane reforming; S-DAC = solid direct air capture.

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Costs
CaptureLevelised cost of capture for sectors that have not been demonstrated at scale yet(particularly diluted and air capture) reflect nth-of-a-kind costs, excluding theunique cost premiums typically associated with first- or second-of-a-kind projects.
Main assumptions include: cost of electricity: USD 32-116/MWh; cost of fuel:USD 4-14/GJ (natural gas), USD 2-7/GJ (coal), USD 7-9/GJ (biomass); plant
lifetime (years): 40 (coal, biomass), 35 (gas), industrial facilities and hydrogen(25), DAC facility (10-25); capacity factor: 85% (power), 95% (hydrogen, industry,
fuel transformation, DAC); capture rates: partial (60%), all (90%), hydrogen andammonia (93%); discount rate: 8%. Capture rates are for the overall plant for
power, hydrogen and cement, and for a specific stream for the steel blast furnace,refinery fluid catalytic cracker, natural gas processing plant and biofuel plant. For
hydrogen, DAC, fuel transformation and industry applications, heat is assumed to
be provided by a natural gas-fuelled auxiliary boiler, and electricity from the grid.
Costs expressed in year-2022 dollars.
Sources: Power: IEA (2023), NETL (2022), IEAGHG (2019); Cement: NETL
(2022), IEAGHG (2013), CEMCAP (2015); Steel: NETL (2022), IEAGHG (2013);
Hydrogen: NETL (2022), IEAGHG (2019), IEAGHG (2017), data from The
Hydrogen Council (2021); Ammonia: EFI (2023), NETL (2022), IEA (2021);
Biofuels: data from IEA Bioenergy (2019), IEAGHG (2021), DEA (2017) ; Natural
gas processing: EFI (2023), NETL (2022); Refinery: EFI (2023), NETL (2022),
IEAGHG (2017); DAC: Bloomberg (2021), IEAGHG (2021), IEA (2023), Oxy(2022).

Storage
Assumptions for storage costs: costs expressed in year-2022 dollars.
Sources: US onshore and offshore storage cost curve: EPA (2021), Sleipner
capital cost (Torp & Brown, 2005), Snøhvit capital cost (IEEFA, 2023), Quest
capital cost (Alberta Department of Energy, 2021), Gorgon capital cost (Chevron,2021).
Notes for project costs:

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Snøhvit: A series of challenges resulted in the capital cost at the time of projectcommencement in 2008 being twice the original budget. During operation, salt
precipitation, which is a common issue, impacted early injection rates. Snøhvit
mitigated this by injecting a chemical solution. However, the pressure build-up in
the Tubåen formation was mainly attributed to a limited reservoir volume andheterogeneities. As a result, it appeared unlikely that the Tubåen formation would

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be able to support the rate and volume of CO2 injection required by the Snøhvit
project over its lifetime. The new injection zone for Snøhvit incurred further
mitigation costs in the capital expenditure.
Gorgon: around a quarter of the budget is attributed to drilling related costs (drillingof 19 new wells and remediation of 3 existing wells) and indirect costs including
project management, FEED, commissioning, and additional logistics.

Transport
Assumptions for transport costs: costs expressed in year-2022 dollars.

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Sources: techno-economic costs for pipeline and shipping: Rubin et al. (2015), US
DOE (2023), IEAGHG (2020), Quest transport unit cost (Alberta Department ofEnergy, 2021), Alberta Carbon Trunk Line unit cost (Alberta Carbon Trunk Line,2022).

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Annex E: Regional and country groupings
Advanced economies: OECD regional grouping and Bulgaria, Croatia, Cyprus 20,
Malta and Romania.
Africa: North Africa and sub-Saharan Africa regional groupings.
Asia Pacific: Southeast Asia regional grouping and Australia, Bangladesh,
Democratic People’s Republic of Korea (North Korea), India, Japan, Korea,
Mongolia, Nepal, New Zealand, Pakistan, The People’s Republic of China (China),
Sri Lanka, Chinese Taipei, and other Asia Pacific countries and territories. 21
Caspian: Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan,
Turkmenistan and Uzbekistan.
Central and South America: Argentina, Plurinational State of Bolivia (Bolivia),
Bolivarian Republic of Venezuela (Venezuela), Brazil, Chile, Colombia, Costa
Rica, Cuba, Curaçao, Dominican Republic, Ecuador, El Salvador, Guatemala,
Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama, Paraguay, Peru,
Suriname, Trinidad and Tobago, Uruguay and other Central and South Americancountries and territories. 22
China: Includes (The People's Republic of) China and Hong Kong, China.
Developing Asia: Asia Pacific regional grouping excluding Australia, Japan,
Korea and New Zealand.
Emerging market and developing economies: All other countries not includedin the advanced economies regional grouping.
Eurasia: Caspian regional grouping and the Russian Federation (Russia).

The information in this document with reference to “Cyprus” relates to the southern part of the island. There is no single
authority representing both Turkish and Greek Cypriot people on the island. Türkiye recognises the Turkish Republic ofNorthern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Türkiye shallpreserve its position concerning the “Cyprus issue”. The Republic of Cyprus is recognised by all members of the United
Nations with the exception of Türkiye. The information in this document relates to the area under the effective control of theGovernment of the Republic of Cyprus.
21
Individual data are not available and are estimated in aggregate for: Afghanistan, Bhutan, Cook Islands, Fiji, French
Polynesia, Kiribati, Macau (China), Maldives, New Caledonia, Palau, Papua New Guinea, Samoa, Solomon Islands, TimorLeste, Tonga and Vanuatu.
22
Individual data are not available and are estimated in aggregate for: Anguilla, Antigua and Barbuda, Aruba, Bahamas,
Barbados, Belize, Bermuda, Bonaire, Sint Eustatius and Saba, British Virgin Islands, Cayman Islands, Dominica, Falkland
Islands (Malvinas), Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Pierre and Miquelon, Saint Vincent andGrenadines, Saint Maarten (Dutch part), Turks and Caicos Islands.

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Europe: European Union regional grouping and Albania, Belarus, Bosnia andHerzegovina, Gibraltar, Iceland, Israel 23, Kosovo, Montenegro, North Macedonia,
Norway, Republic of Moldova, Serbia, Switzerland, Türkiye, Ukraine and United
Kingdom.
European Union: Austria, Belgium, Bulgaria, Croatia, Cyprus, 24 Czech Republic(Czechia), Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland,
Portugal, Romania, Slovak Republic, Slovenia, Spain and Sweden.
IEA (International Energy Agency): OECD regional grouping excluding Chile,
Colombia, Costa Rica, Iceland, Israel, Latvia and Slovenia.
Latin America and the Caribbean (LAC): Central and South America regionalgrouping and Mexico.
Middle East: Bahrain, Islamic Republic of Iran (Iran), Iraq, Jordan, Kuwait,
Lebanon, Oman, Qatar, Saudi Arabia, Syrian Arab Republic (Syria), United ArabEmirates and Yemen.
Non-OECD: All other countries not included in the OECD regional grouping.
Non-OPEC: All other countries not included in the OPEC regional grouping.
North Africa: Algeria, Egypt, Libya, Morocco and Tunisia.
North America: Canada, Mexico and United States.
OECD (Organisation for Economic Co-operation and Development):
Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, Czechia,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland,Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, Netherlands,
New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain,
Sweden, Switzerland, Türkiye, United Kingdom and United States.
OPEC (Organization of the Petroleum Exporting Countries): Algeria, Angola,
Bolivarian Republic of Venezuela (Venezuela), Equatorial Guinea, Gabon, Iraq,
Islamic Republic of Iran (Iran), Kuwait, Libya, Nigeria, Republic of the Congo(Congo), Saudi Arabia and United Arab Emirates.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of suchdata by the OECD and/or the IEA is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli
settlements in the West Bank under the terms of international law.
24
The information in this document with reference to “Cyprus” relates to the southern part of the island. There is no single
authority representing both Turkish and Greek Cypriot people on the island. Türkiye recognises the Turkish Republic ofNorthern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Türkiye shallpreserve its position concerning the “Cyprus issue”. The Republic of Cyprus is recognised by all members of the United
Nations with the exception of Türkiye. The information in this document relates to the area under the effective control of theGovernment of the Republic of Cyprus.

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OPEC+: OPEC grouping plus Azerbaijan, Bahrain, Brunei Darussalam,
Kazakhstan, Malaysia, Mexico, Oman, Russian Federation (Russia), South Sudan
and Sudan.
Southeast Asia: Brunei Darussalam, Cambodia, Indonesia, Lao People’s
Democratic Republic (Lao PDR), Malaysia, Myanmar, Philippines, Singapore,
Thailand and Viet Nam. These countries are all members of the Association ofSoutheast Asian Nations (ASEAN).
Sub-Saharan Africa: Angola, Benin, Botswana, Cameroon, Côte d’Ivoire,
Democratic Republic of the Congo, Equatorial Guinea, Eritrea, Ethiopia, Gabon,
Ghana, Kenya, Kingdom of Eswatini, Madagascar, Mauritius, Mozambique,
Namibia, Niger, Nigeria, Republic of the Congo (Congo), Rwanda, Senegal, South
Africa, South Sudan, Sudan, United Republic of Tanzania (Tanzania), Togo,
Uganda, Zambia, Zimbabwe and other African countries and territories. 25

Individual data are not available and are estimated in aggregate for: Burkina Faso, Burundi, Cabo Verde, Central African
Republic, Chad, Comoros, Djibouti, Gambia, Guinea, Guinea-Bissau, Lesotho, Liberia, Malawi, Mali, Mauritania, Sao Tomeand Principe, Seychelles, Sierra Leone and Somalia.

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General annexAbbreviations and acronyms
Australian Carbon Credit Units
Accelerating CCUS Technologies
Alberta Carbon Trunk Line
Australian dollars
Bioenergy with carbon capture and storage
Blast furnace basic oxygen furnace
Canadian dollars
Calcium oxide (lime)
Calcium carbonate
Capital expenditure
Carbon Border Adjustment Mechanism
Carbon contract-for-difference
Combined cycle gas turbine
Carbon capture and storage
Carbon capture and utilisation
Carbon capture, utilisation and storage
Carbon dioxide removal
Connecting Europe Facility
Contract-for-difference
CO2 Transportation Infrastructure Finance and Innovation Act
China National Petroleum Corporation
Conference of the Parties
Carbon dioxide
Contracting party
Direct air capture
Direct air capture and storage
Department of Energy (United States)
Direct reduced iron
Energie Beheer Nederland
Enhanced gas recovery
Emerging markets and developing economies
Enhanced oil recovery
Engineering, procurement, construction
Emission trading system
Energy Technology Development and Demonstration Programme
Enhanced water recovery
Fluid catalytic cracker
Front-end engineering and design
Final investment decisionFirst-of-a-kind
Fischer-Tropsch
Greenhouse gas
Hydrogen

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ACCU
ACT
ACTL
AUD
BECCS
BF-BOF
CAD
CaO
CaCO3
CAPEX
CBAM
CCfD
CCGT
CCS
CCU
CCUS
CDR
CEF
CfD
CIFIA
CNPC
COP
CO2
CP
DAC
DACS
DoE
DRI
EBN
EGR
EMDEs
EOR
EPC
ETS
EUDP
EWR
FCC
FEED
FID
FOAK
FT
GHG
H2

CCUS Policies and Business Models: building a commercial market

HVC
IIJA
IMO
ITC
JOGMEC
JV
LCC
LCOE
LCOH
LCOM
LCR
LPO
MI
MMV
MRV
NDC
Non-CP
NSTA
OEM
OPEX
PC
PSA
PV
R&D
RAB
RD&D
SMR
SOE
TRI
TRL
TSO
UN
UNIDO
VCM
VCS
VSA
WACC

General annex

High value chemical
Infrastructure Investment and Jobs Act
International Maritime Organization
Investment Tax Credit
Japan Organization For Metals and Energy Security
Joint venture
Levelised cost of capture
Levelised cost of electricity
Levelised cost of hydrogen
Levelised cost of material
Levelised cost of CO2 removal
Loan Programs Office
Mission Innovation
Monitoring, measurement and verification
Measurement, reporting and verification
Nationally determined contribution
Non-contracting party
North Sea Transition Authority
Original equipment manufacturer
Operational expenditure
Pulverised combustion
Pressure swing adsorption
Photovoltaic
Research and development
Regulated asset baseResearch, development and demonstration
Steam methane reforming
State-owned enterpriseTransport and Storage Regulatory Investment
Technology Readiness Level
Transmission System Operators
United Nations
United Nations Industrial Development Organization
Voluntary carbon market
Verified Carbon Standard
Vacuum swing adsorption
Weighted average cost of capital

Units of measure
Gigajoule
Gigatonne of carbon dioxide
Gigawatt
Gigawatt hour
Kilowatt

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GJ
Gt CO2GW
GWh
kWCCUS Policies and Business Models: building a commercial market

Kilowatt hour
Megawatt
Megawatt hour
year

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kWh
MW
MWh
yr

General annex

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