Carbon Capture, Utilization, and Storage (CCUS): A Key Driver of Industrial Decarbonization and Net-Zero

As the energy transition accelerates, Carbon Capture, Utilization, and Storage (CCUS) is becoming an essential solution to reducing CO2 emissions, particularly in hard-to-abate industries such as cement, steel, and chemicals. The International Energy Agency (IEA) estimates that CCUS could cut industrial sector emissions by up to 45% by 2030. 

• Essential for Industrial Decarbonization: Hard-to-abate sectors like cement, steel, and chemicals have limited alternatives. 

• Cost-Effective in Key Applications: In green hydrogen and ammonia production, CCUS offers one of the most viable low-carbon pathways. 

• Enables CO2 Utilization & Storage: Captured CO2 can be repurposed for synthetic fuel production and heavy mobility applications. 

• Supports Carbon Balance: Capturing biogenic CO2 can help achieve net-negative emissions by leveraging biomass within the short carbon cycle. 

Sia recognizes the strategic importance of CCUS and its role in the global energy transition. However, CCUS deployment faces a range of challenges, including financial and regulatory uncertainties, public perception concerns, and technological barriers. Lessons from past projects—such as the Kemper Project (US), Gorgon Project (Australia), and Schwarze Pumpe Project (Germany)—highlight the importance of robust planning, financial viability, and stakeholder engagement to avoid costly setbacks. 

Scaling CCUS projects remains uncertain due to persistent economic, regulatory, and technological challenges. For these projects to be viable, value chains must be integrated to maximize economies of scale. 

Projects are increasingly developed within CCUS hubs, where infrastructure and industrial players are co-located to optimize cost efficiency and logistics. CCUS hubs are essential as they transport carbon dioxide from various emitters to be stored using common infrastructure, which reduces costs and risks for companies and governments, enabling implementation at scale.  

There are a number of recent examples including: 

• Northern Lights (Norway): Offshore CO2 storage project. 

• Atlas Hub (Canada): Collaboration among industries to store 5 Mt CO2/year. 

• HyNet (UK): Industry cluster for carbon capture and hydrogen production. 

Successful CCUS projects employ diverse business models, including fully integrated models where a single entity manages the entire process, exemplified by the Gorgon CCS project in Australia. Another approach is the transport and storage as a service, like in the Northern Lights project in Norway. 

The success of these models depends on long-term financial support, carbon pricing mechanisms, and industry demand for CO2 utilization, underscoring the need for a stable regulatory framework 

• Financial Risks: CCUS remains cost-intensive in many regions and is highly dependent on financial incentives and carbon pricing mechanisms. 

• Regulatory Risks: Inconsistent policies and unclear regulatory frameworks create uncertainty, delaying investment decisions and project approvals. 

• Technical Risks: Developing, operating, and maintaining CCUS infrastructure requires close coordination between emitters, transporters, and storage operators. 

• Social Acceptability: Public concerns over environmental and safety risks can slow project deployment, making community engagement essential. 

CCUS adoption varies significantly across regions due to differing policy frameworks, financial incentives, and industrial needs. The United States has emerged as a leader in CCUS adoption, largely due to tax incentives such as the 45Q tax credit and an extensive CO2 pipeline network. Europe has integrated CCUS within its Emissions Trading System (ETS), supporting the establishment of major hubs like Porthos in the Netherlands and Longship in Norway. In China, significant investments are being made in industrial decarbonization, while countries in the Middle East, including Saudi Arabia and the UAE, are leveraging CCUS for enhanced oil recovery (EOR) and large-scale carbon storage. 

Utilising our industry expertise and market knowledge, Sia conducted a benchmarking analysis to evaluate the most preferrable sites for future CCUS hubs. Our analysis considered multiple factors, including current local CO2 emissions, the proportion of hard-to-abate emissions, the political and regulatory landscape, social acceptance of CCUS, and the publicly known pipeline of CCUS projects. 

A number of the expected key players were prominent including the US, Canada, China, UK and Brazil.

Sia strongly advocates for the following strategic actions to accelerate CCUS deployment in all markets: 

• Develop national and regional CCUS roadmaps with clear milestones and priority sectors. 

• Expand financial incentives, including subsidies, Contracts for Difference (CCfDs), and tax credits, to drive investment. 

• Promote cross-industry collaboration to create economies of scale through CCUS hubs and shared infrastructure. 

• Address public concerns by implementing robust monitoring systems and transparent communication strategies. 

• Encourage research and development to improve capture efficiency and cost-effectiveness. 

Sia believes that CCUS can play a pivotal role in the global energy transition, provided there is sustained commitment from both the public and private sectors. 

CCUS is a cornerstone of industrial decarbonization, particularly for sectors where electrification or alternative energy sources are impractical. However, scaling CCUS requires strong financial incentives, technological improvements, and widespread public and industry support. To ensure its success, governments and businesses must work together to create a stable regulatory framework and invest in scalable infrastructure. 

Sia provides strategic guidance to organizations and governments, helping them navigate CCUS complexities from policy design to project execution.