Six primary steps for CO2 value chain
CCS value chain involves several critical stages, each playing a key role in reducing CO₂ emissions:
Capture
The process begins at large emission sources, such as cement factories, steel plants, or power stations, where CO₂ is produced as a byproduct. Instead of releasing this CO₂ into the atmosphere, it is captured using advanced technologies, preventing it from contributing to greenhouse gas emissions.
Compression and Temporary CO2 Storage
Once captured, the CO₂ is compressed into a liquid form for easier handling and transport. This temporary storage is a critical step to ensure the CO₂ is manageable and ready for its next phase.
Carbon Transport
Transporting CO₂ to a storage site is typically done through pipelines laid on the seabed or onshore. Alternatively, for offshore storage locations, CO₂ can be transported by specialised ships. The choice of transportation depends on the location of the storage site and logistical considerations.
CO2 Storage Site Selection
The storage phase involves identifying suitable geological reservoirs for long-term containment. These reservoirs can be depleted oil and gas fields or other geological formations deemed fit for CO₂ injection. A critical part of this stage is assessing the integrity and capacity of the storage site.
Well Preparation and Carbon Injection
Injection wells are drilled into the selected reservoir to deposit the CO₂ deep underground. For reservoirs that have previously been used for oil and gas production, existing wells need to be carefully examined and potentially repurposed. Ensuring these wells are properly plugged and secured is vital to prevent CO₂ from leaking back to the surface or seabed.
Monitoring and Maintenance
Post-injection, the site undergoes rigorous monitoring to ensure the CO₂ remains safely stored and that the storage system performs as intended. This long-term oversight is critical to the success and safety of CCS operations.
Why is CCS momentum building?
The growing momentum behind Carbon Capture and Storage (CCS) is driven by the urgent need to address global CO2 emissions, which continue to rise despite reductions in some regions.
Source: World Energy Outlook 2024 Free Dataset – Data product – IEA
We have yet to reach a peak in global emissions, making it clear that current efforts are not sufficient to meet climate targets. To close this gap, scalable and effective solutions like CCS are essential.
As countries and industries recognise the critical role of CCS in reducing emissions, momentum is building to implement this technology at scale. CCS is increasingly viewed as a necessary component of a comprehensive strategy to tackle climate change and meet the goals of the Paris Agreement. The focus is no longer just on reducing emissions but also on actively removing and managing CO2, ensuring a sustainable future.
There has been a notable increase in investments in energy transition and renewables over the past decade, reflecting a clear shift towards more sustainable energy sources beyond oil, gas, and coal for power production. An increasing trend is particularly evident within CCS, which saw its investments nearly double from 2022 to 2023, with even further growth anticipated this year. This surge in funding underscores the growing commitment to advancing technologies that support the global transition to a low-carbon future.
Looking at various financial and industrial reports, we conclude that:
- Annual global investment in energy transition technologies rose to USD 1.77 trillion in 2023 – 17% year-on-year gain
- Investments in new renewable energy projects – wind, solar, biofuels and other renewables – grew 8%
- Hydrogen tripled to USD 10.4 billion
- CCS nearly doubled to USD 11.1 billion.
The UN climate negotiations under the umbrella COP29 launched last week in Baku, Azerbaijan, spotlighting even further the urgent need to mobilise large amounts of investments to address the global climate bill. With a focus on supporting vulnerable nations in tackling climate challenges, COP29 has already in its second week earned the nickname “The Climate Finance COP.”
What’s the status of CCS globally?
Globally, numerous CCS projects are in various stages of feasibility, development, construction, and operation, with the current global advertised capacity to store approximately 400 million tonnes (Mt) of CO2 per year. However, to meet the net-zero ambitions, governments and organisations must significantly ramp up carbon storage injection capacity to 1,300 Mt of CO2 per year.
2024 has already proven to be a pivotal year, with 50 facilities now operational and 628 projects currently in the pipeline. By 2070, it is projected that 15% of the total CO2 reduction required to achieve climate goals will need to come from CCS technologies.
CCS in the US
The successful deployment of large-scale CCS hinges on robust policy frameworks, including carbon pricing, tax incentives, and emissions regulations. In the U.S., the enhanced 45Q tax credits for the CCS projects under the Inflation Reduction Act, increased the credit to $85 per ton of CO₂ captured and permanently stored (up from $50) and $60 per ton for utilisation (CO2-EOR) (up from $35).
Activity in the U.S. CCS sector has surged significantly, with around 20 projects approved and 240 more in the pipeline. This marks a notable increase, considering there are currently only eight active CCS projects in operation.
CCS in Australia
Australia has currently two large CCS projects in operation; Chevron Gorgon CCS and Santos Moomba CCS project. Another recent interesting example of development in CCS is the awarding of two Greenhouse Gas Assessment Permits in the Bonaparte and Browse Basins off Australia. These sites have the potential to permanently store up to 1 giga billion tonne of CO2. The project represents a full value chain solution, encompassing the receipt of liquefied CO2 (LCO2) from locations in Japan, Australia, and the surrounding region, its transportation by ship, and subsequent storage and injection via floating storage and injection (FSI) facilities in Australian waters. An appraisal well for this project is planned to be drilled in 2026.
CCS in Europe
In the EU and Europe, there are currently 62 CCS projects either existing or in the planning stages, with a combined annual storage ambition of 135 Mtpa for the larger countries. The UK, Denmark, and Norway are leading the development of CO2 storage sites, with the UK setting a target to store 30 Mtpa annually. The recent £22 billion investment announced by Downing Street for two CCS clusters in the northwest and northeast of England is set to significantly boost the CCS value chain, further driving progress in the North Sea region.
There is a strong political push towards Carbon Capture and Storage (CCS) in Europe. With the EU’s Net Zero Industry Act targeting 50 Mtpa by 2030, and with the year rapidly approaching, urgent action is needed. Cross-border cooperation for CCS is crucial in this context.
This year saw important declarations, including an agreement in April between Denmark, Norway, Belgium, the Netherlands, and Sweden to facilitate cross-border transport and geological CO2 storage. More recently, there has been a call from six EU countries for a robust regulatory framework to support cross-border CO2 transportation, which is becoming increasingly vital for Europe’s CCS efforts.
What’s next for CCS?
CCS is essential for reducing greenhouse gas emissions (GHG), with projections indicating that by 2070, we will need to manage 50% of global emissions through this technology.
Globally, CCS activity is ramping up, with investments doubling from 2022 to 2023 and continuing to rise in 2024. The U.S. has a long history of utilising CCUS, and technically, we have the capability to scale this solution.
In Europe, while there is significant storage potential, the challenge lies in capturing and transporting CO2 from major emission sources to suitable storage locations. Many capturing and storage projects are already underway or in the pipeline, with the UK, Norway, the Netherlands, and Denmark leading the way. Notably, Denmark is focusing on onshore storage as well, emerging as a key alternative to offshore storage solutions.
As the world works to meet its climate goals, CCS will play a central role in achieving net-zero emissions. The future of CCS looks increasingly promising, with growing investments and a global push for scaling this critical technology.
Working across the full Carbon Transport and Storage spectrum
At AGR, in collaboration with our sister company Longitude, we operate and maintain CCS projects over the entire value chain – from vessel evaluation, transportation, subsurface through to full drilling project management and third-party verification, asset repurposing and to ensure CO2 remains underground.
Our clients receive expertise in key stages:
- Feasibility studies – including petrophysics, reservoir modelling and simulation of CO2 plume movement, CO2 well costing
- Storage site screening and characterisation for potential CO2 storage
- Independent third-party project risk evaluation and storage evaluations
- Geological assessment and mitigation of the risks associated with CO2 leakage
- Subsurface evaluation in certification for CO2 storage sites according to ISO27914
- Evaluation of repurposing production wells to CO2 injection wells
- Well integrity assessments for depleted oil and gas fields to be converted to CO2 storage sites
- Well design and drilling management of CO2 storage wells
- Vessel design and engineering for CO2 transportation
