Major Developments And Challenges In Carbon Capture & Storage (CCS): 2023-2025

Posted on by Brian Colwell

The carbon capture and storage (CCS) sector has undergone unprecedented transformation during 2023-2025, marked by record investment levels, technological breakthroughs, and sobering operational realities. With 628 projects now in the global pipeline—a 60% increase since 2023—the industry stands at a critical juncture between ambitious climate targets and persistent technical challenges.

Explosive Growth Meets Operational Reality

The global CCS landscape has expanded dramatically, with operational capacity reaching just over 50 million tonnes of CO2 annually by early 2025. This represents significant growth, yet remains far below the 1,300 million tonnes required for net-zero pathways. The number of operational facilities has grown to 79 across nine industries, while 247 projects have entered Front End Engineering and Design (FEED) stage—more than doubling since 2023. Investment has tripled since 2022 to reach $6.4 billion in 2024, signaling strong market confidence despite technical setbacks.

The most striking development has been the emergence of large-scale commercial projects. Northern Lights in Norway, operational since 2024, represents the world’s first commercial cross-border CO2 transport and storage project. With Phase 1 capacity of 1.5 million tonnes annually and Phase 2 expansion to 5 million tonnes by 2028, backed by €131 million in EU funding, it demonstrates the viability of shared infrastructure models. Similarly, Australia’s Moomba CCS became operational in October 2024, capturing 1.7 million tonnes annually and achieving full injection rates with 340,000 tonnes stored in its first operational year.

Performance Reveals Persistent Challenges

Analysis of existing major CCS facilities reveals a troubling performance gap between promises and reality. The stark contrast between high-performing and struggling projects illuminates critical technical and operational challenges facing the industry.

Canada’s Boundary Dam emerged as a relative success story, achieving 85% availability in 2024 and capturing 848,388 tonnes of CO2—its strongest calendar year to date. The facility has now stored over 6.6 million tonnes cumulatively, demonstrating that consistent performance is achievable with proper operational management. Shell’s Quest project has similarly maintained steady performance, consistently capturing around 79% of emissions and storing 9 million tonnes by May 2024, with plans for a 75% capacity expansion.

However, these successes are overshadowed by severe underperformance at other flagship facilities. Australia’s Gorgon project, the world’s largest CCS initiative, recorded its worst performance in 2024 with only a 30% capture rate—far below its 80% target. The project’s costs have ballooned to $222 per tonne captured, with Chevron investing an additional $3.2 billion in technical fixes and carbon offsets. Technical issues including reservoir pressure problems, sand clogging, and water management challenges have plagued operations since 2019.

Perhaps most concerning are revelations about Norway’s pioneering Sleipner project. Long considered a CCS success story, investigations revealed the facility had been over-reporting captured CO2 by 28% due to defective monitoring equipment. The project captured only 106,000 tonnes in 2023 versus claimed amounts of 1 million tonnes, and has not achieved its target capture rate since 2001. With the Sleipner gas field expected to be depleted by 2024, this former flagship faces closure amid questions about monitoring integrity across the industry.

Technological Innovation Accelerates

Despite operational challenges, 2023-2025 witnessed significant technological advances across capture, transport, and storage systems. Novel capture technologies have shown particular promise, with solid sorbents and advanced materials offering potential cost reductions and efficiency improvements.

Solid sorbent technologies have emerged as a game-changer, with Metal-Organic Frameworks (MOFs) and Temperature Swing Adsorption processes achieving over 90% CO2 capture efficiency with greater than 95% purity. Companies like Nuada secured $10 million in Series A funding for MOF-based systems, while Dotz Nano developed proprietary solid sorbents from plastic waste, demonstrating circular economy principles in carbon capture.

Traditional amine-based capture systems have also seen substantial improvements. Research from Imperial College London demonstrated that next-generation amine systems can achieve 99% CO2 capture with minimal cost increases. Advanced solvents like KS-1™ show reduced energy requirements compared to traditional monoethanolamine (MEA), while automated monitoring systems developed by the International CCS Knowledge Centre are reducing operational costs.

Direct Air Capture (DAC) technology has experienced particularly rapid development. Climeworks’ Generation 3 technology doubled CO2 capacity per module while cutting energy consumption and costs by 50%, targeting $250-350 per tonne by 2030. The company’s Mammoth facility in Iceland, with 36,000 tonnes annual capacity, represents a tenfold scale-up from its predecessor. However, current DAC costs remain prohibitively high at $1,000-1,300 per tonne, though projections suggest potential reduction to $230-580 per tonne by 2030.

Economic Landscape Transforms With Policy Support

The economic viability of CCS has been fundamentally altered by enhanced government support, particularly in the United States through the Inflation Reduction Act. The increase in 45Q tax credits to $85 per tonne for geological storage and $180 per tonne for DAC with storage has made previously uneconomic projects viable. The Congressional Budget Office projects these incentives will cost $5 billion in revenue reduction through 2027, while potentially enabling hundreds of new projects.

Current capture costs vary dramatically by source and technology. High-purity streams from ethanol production or natural gas processing can be captured for $15-25 per tonne, while dilute streams from cement plants or power generation cost $40-120 per tonne. The industry average for most sectors has settled around $50-100 per tonne, though comprehensive system costs including transport and storage often push total expenses to $400 per tonne of capacity.

Break-even carbon prices reveal regional variations in project economics. European facilities require €70-250 per tonne CO2 at current storage sites, potentially dropping to €60-150 per tonne with expanded infrastructure. In contrast, U.S. projects become viable at $85 per tonne thanks to generous tax credits. These economics have driven a surge in project announcements, though only 20% of announced 2030 capacity has reached final investment decision, highlighting persistent uncertainty about long-term viability.

Regional Hubs Emerge As Dominant Model

The 2023-2025 period has seen a decisive shift toward regional hub development, with governments recognizing the efficiency of shared infrastructure over standalone projects. The UK’s commitment of £21.7 billion over 25 years for Track-1 clusters exemplifies this approach, targeting 20-30 million tonnes annual capture by 2030 and creating an estimated 50,000 jobs.

The East Coast Cluster, anchored by BP, Equinor, and TotalEnergies, aims to capture up to 27 million tonnes annually by the mid-2030s. Net Zero Teesside Power’s 840MW gas-fired plant with CCS and H2 Teesside’s 1GW blue hydrogen facility represent integrated industrial decarbonization at scale. Similarly, the HyNet North West cluster will capture 10 million tonnes annually by 2030, serving cement, oil refining, and chemical industries across North West England and North Wales.

Asian development has accelerated dramatically, with China adding four new facilities in 2023 and targeting 50 million tonnes capture capacity by 2030. The Qilu-Shengli CCUS project’s 1 million tonne annual capacity and the world’s first commercial cement CCS plant demonstrate China’s commitment to deployment across sectors. Malaysia has announced plans for three CCS hubs by 2030 with 15 million tonnes annual capacity, positioning itself as a regional storage provider for Japanese and Korean emissions.

Cross-Border Cooperation Reaches New Heights

International collaboration has emerged as a critical enabler for CCS deployment, with the Northern Lights project pioneering commercial cross-border CO2 transport. The facility now receives emissions from facilities in the Netherlands, Belgium, Germany, Ireland, France, and Sweden, proving the viability of international carbon management infrastructure.

The European Union selected 14 Projects of Common Interest (PCIs) for CCS, creating an integrated network spanning nine countries. Projects like EU2NSEA connect Belgium, Germany, Norway, Denmark, France, Latvia, Netherlands, Poland, and Sweden in a massive CO2 transport and storage network. The Aramis project in the Netherlands, backed by €7.3 billion in government funding, will create infrastructure capable of handling emissions from across Northwestern Europe.

Asia-Pacific cooperation has crystallized around Japanese leadership and Southeast Asian storage capacity. The September 2023 Japan-Malaysia memorandum of understanding established frameworks for transboundary CO2 transport, while eight Japanese companies partnered with PETRONAS for the Sarawak CCS project. Indonesia’s massive 600 gigatonne storage capacity positions it as the regional leader, with ExxonMobil committing $2.6 billion to develop 3 billion tonnes of storage potential.

Sobering Failures Provide Crucial Lessons

Despite progress, the industry has faced significant setbacks that illuminate persistent challenges. Historical analysis reveals an 88% failure rate for planned CCS projects, with only 3 of 13 flagship projects reviewed achieving their targets. These failures stem from technical challenges, economic constraints, and competition for resources.

The cancellation of CarbonCapture Inc.’s Project Bison in Wyoming exemplifies emerging challenges for DAC deployment. Originally planned for 5 million tonnes annual capacity by 2030, the project was abandoned due to competition from data centers for renewable energy access. This highlights a critical constraint: as artificial intelligence drives explosive growth in clean energy demand, DAC projects may struggle to secure the massive power requirements for atmospheric CO2 removal.

Storage complexities have proven particularly challenging. Norway’s Snøhvit project experienced rapid pressure rise in its initial formation, reducing predicted lifetime from 18 years to 6 months and requiring emergency interventions. Similar geological surprises at Sleipner saw CO2 migrate 220 meters upward into previously unknown strata, raising questions about long-term storage security and monitoring adequacy.

Final Thoughts: Path Forward Requires Honest Assessment

The 2023-2025 period has demonstrated both the potential and limitations of CCS technology. While policy support has reached unprecedented levels and technological innovation continues, operational realities reveal persistent challenges in achieving promised performance levels. The industry must accelerate deployment by 67% annually to meet net-zero targets—a pace that seems increasingly unlikely given current project failure rates and technical challenges.

Success will require acknowledging uncomfortable truths about CCS limitations while building on genuine achievements. The hub model shows promise for reducing costs through shared infrastructure, while enhanced monitoring systems can prevent the over-reporting that plagued projects like Sleipner. Most critically, the industry must move beyond pilot projects to demonstrate reliable, cost-effective operation at climate-relevant scales.

As 2025 draws to a close, the CCS sector stands at an inflection point. With $50 billion in government commitments, breakthrough technologies in development, and growing international cooperation, the foundation exists for meaningful deployment. However, bridging the gap between current capacity of 50 million tonnes and the 1,300 million tonnes needed for climate targets will require not just investment and innovation, but a fundamental commitment to transparency about what CCS can realistically achieve in the race against climate change. The next five years will determine whether carbon capture can fulfill its promise as a critical climate solution or remain a costly technological aspiration.

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