7 March 2020

The Value of Carbon Capture, Utilization, and Sequestration

Cuicui Chen, Henry Lee

Carbon capture, utilization, and sequestration (CCUS) represents a class of technologies that directly capture carbon dioxide, either before or after combustion, and then either permanently store it in underground deposits or recycle it for further use.

As of now, CCUS has been deployed only in isolated pilot projects; most of which sell the resultant stream of carbon dioxide to oil producers as a tool to increase production in older wells. This market is both geographically and economically limited, particularly if oil prices remain low.

However, growing concern around climate change has ignited recent interest in CCUS technologies and a series of studies on its global market potential. A 2017 International Energy Agency report suggests that to meet the 2-degree-Celsius target, CCUS must account for at least 20% of the reduction in annual global emissions by 2060. In the United States, Congress has approved generous tax credits for CCUS investments, generating new interest from investors. The number of CCUS projects is increasing in many countries, from the U.S. and Canada to China and Norway.


This policy brief poses the following questions. First, what is the value of CCUS technologies from the public perspective, and how might that change over time? Second, how can governments most effectively pursue that value?

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