With billions of tons of carbon dioxide still clogging our atmosphere, the race to preventing climate change isn't just urgent—it’s a fight for the planet’s survival.
Despite this alarming news, the pace of progress in adapting to the necessary changes is alarmingly insufficient. To limit global warming to below 2°C, the International Energy Agency (IEA) warns that the immediate adoption of carbon capture and storage (CCS) technologies is non-negotiable (Zhao et al., 2018). The Intergovernmental Panel on Climate Change (IPCC) has reinforced this urgency, projecting that by 2050 the world will need to remove 10 billion tonnes of carbon dioxide (CO₂) from the atmosphere, necessitating a diverse portfolio of carbon removal approaches (Ozkan et al., 2022; IPCC, 2005).
As of 2021, less than 10,000 tons of CO₂ had been permanently removed by emerging technologies - falling a staggering one million times short of the scale required annually to meet global climate targets (Frontier, n.d.).
Here it is also important to introduce a key component of the carbon removal industry, namely the ‘utilisation factor’ in Carbon Capture, Utilisation, and Storage (CCUS).
This process repurposes captured carbon into materials, chemicals, or fuels, helping reduce emissions in hard-to-abate sectors (IEA, n.d.). While widely used, it is also controversial since CO2 is often not permanently stored and eventually re-enters the atmosphere. Despite this, experts say that CC(U)S is capable of reducing up to 20% of global CO₂ emissions, with a unique position to address emissions from industries like cement and steel, where alternative solutions fall short (Olajire, 2010; CCS Explained: Capture - Global CCS Institute, 2022). Therefore, CC(U)S is not just a technological breakthrough—it is a game-changer for global climate mitigation strategies. (NationalGrid, 2024; Bains, 2017).
A short description of the nitty gritty of CCS & CCUS
Carbon Capture technologies are designed to capture CO₂ emissions from major industrial sources, power plants, or directly from the air, transporting and then storing it underground or repurposing it as a valuable resource (NationalGrid, 2024; Global CCS Institute, 2022).
This process comprises three essential steps: Capture, Transport, and Storage or Utilisation, each playing a crucial role in effective CO₂ removal.
Capture Methods
There are multiple methods of capturing CO₂, depending on the technology and source of emissions. One method of capture involves “point-capture,” where CO₂ emissions are intercepted at large sources like power plants before reaching the atmosphere (British Geological Survey, 2022).
Three major capture techniques are used: pre-combustion, post-combustion, and oxyfuel combustion, each employing methods such as chemical solvents or membrane separation (IPCC, 2005). Beyond point-capture, methods like Direct Air Capture (DAC) and Bioenergy with Carbon Capture and Storage (BECCS) capture CO₂ from the atmosphere and biomass processes, respectively, expanding the potential for CO₂ removal to go beyond net-zero and reach negative emission targets (Ozkan et al., 2022; Shahbaz et al., 2021).
For the purpose of consistency and clarity, the following report will coin the term of “CC(U)S” to imply the entire range of above-mentioned technologies (point capture, DACCS, BECCS and nature-based capture) unless otherwise specified.
CO₂ Transport
Transporting captured CO₂ bridges capture facilities and storage sites, utilising pipelines, trucks, and ships, with pipelines being the most common method for moving large volumes of CO₂ over long distances (IPCC 2005).
Road transport, suitable for smaller volumes over shorter distances, uses trucks to move CO₂ as a cryogenic liquid (Haua et al., 2023). Ships offer flexibility for longer distances, especially where pipelines are impractical, storing CO₂ in semi-refrigerated tanks for transit across oceans (Hong, 2022).
Storage/Sequestration/Utilisation
In the final step, CO₂ is either permanently/non-permanently stored or repurposed for utilisation. Storing CO₂ is most commonly done underground, either in geological formations or potentially in the deep ocean. Geological sequestration injects CO₂ into depleted oil and gas fields or saline aquifers, where CO₂ can remain stable for thousands of years (Cao et al., 2020). Ocean sequestration, still experimental, involves injecting CO₂ into deep ocean depths where it forms stable hydrates, though it faces environmental and regulatory concerns (IPCC, 2005; Pham et al., 2016). In the case of CO₂ being utilised, this varies based on the type of capture technology and the industry in which it is employed, with utilisation ranging from turning CO₂ into fuels, chemicals and other materials such as biochar or concrete, as well as utilising the pure CO₂ for specific industrial purposes.
Together, these steps offer a comprehensive means of reducing CO₂ in the atmosphere, supporting emissions reduction goals and contributing to global climate mitigation efforts. The importance and impact of the CC(U)S industry on removing CO₂ emissions from the atmosphere has been very well visualised by the World Resources Institute in the graph below.
Regulatory Pathways Driving CC(U)S Deployment in Europe
By 2050, it is estimated that up to 10 billion tons of CO₂ (GtCO₂) will need to be removed from the atmosphere annually to meet the median targets of the various net-zero scenarios examined by the Intergovernmental Panel on Climate Change (IPCC, 2005).
In alignment with this, recent years have seen significant developments of regulatory frameworks within the European Union (EU) in order to advance carbon removal and industrial carbon management.
The Net Zero Industry Act (NZIA), effective since June 29, 2024, designates carbon capture as essential to net-zero goals, setting a target for 50 million tonnes of annual CO₂ storage capacity by 2030 and mandating oil and gas producers to invest in this infrastructure based on their market shares (Freshfields Bruckhaus Deringer, 2023; Molyneux et al., 2024). Complementing this, the EU's Industrial Carbon Management (ICM) Strategy, published on February 6, 2024, promotes CCUS with new policy measures, such as emission accounting rules and CO₂ stream quality standards within the EU Emissions Trading System (EU ETS) (Legislative Framework, n.d.; COM(2024)62). Despite lacking in novelty, the EU ETS will play a decisive factor in facilitating the trade of both mandatory and voluntary carbon credits. Currently this has established a mandatory market of around €270 billion and a voluntary market of €1 billion in 2021, with an estimated increase in demand by a factor of 15 or more by 2030 and by a factor of up to 100 by 2050 (Adams et al., 2021).
In support of the development of the carbon market, additional mechanisms, including the Carbon Border Adjustment Mechanism (CBAM), and a new voluntary certification framework for carbon removals will promote the decrease of carbon removal pricing, trade alignment, and standardised certification, thereby fostering CC(U)S integration and reducing greenwashing risks in the EU (Freshfields Bruckhaus Deringer, 2023; European Council, 2024; Taxation and Customs Union, 2024).
This supportive regulatory framework has a clear message; the time to scale up and deploy this transformative technology is now. But success depends on two key factors. First, ensuring that the persistent narrative that climate change is a “hoax” - promoted by figures like Trump - doesn’t undermine the hard-won regulatory progress of recent years. Secondly, driving the total cost of CO₂ removal - including capture, transport, and storage - below $100 per tonne by 2050 (Lackner and Azarabadi, 2021; World Economic Forum, 2024; Achieving Net Zero, 2024). Without this second milestone, large-scale deployment of carbon removal technologies remains out of reach—and so does our best chance at a sustainable climate future.
Reaching the sub-$100 mark - What is the main challenge that CC(U)S faces?
The main problems that CC(U)S faces is the high prices, with the most expensive factor commonly being the capture process, typically accounting for 50% of the total costs (Kheirinik et al., 2021). These high costs pose significant challenges to the scalability of CC(U)S technologies, creating critical roadblocks to their effective implementation. However, technological advancements and efficiency improvements in CC(U)S technologies follow patterns similar to those observed in Moore's Law, indicating that ongoing innovation and scaling could substantially lower costs and enhance performance over time. This trend is exemplified by Climeworks, which operated the first commercial DAC plants worldwide. They currently have a removal cost of approximately $1,000/t-CO₂, but aim to reduce this to $400-600/t-CO₂ by 2030 and ultimately to $250-350/tCO₂, demonstrating a reported cost reduction rate of 50% with their next-generation technology (Climeworks, 2024).
What are the costs of CC(U)S?
The economics of CC(U)S break down into capital costs (CAPEX)—equipment, infrastructure, installation—and operational costs (OPEX) such as energy, maintenance, and consumables. While these vary by technology, the capture process remains the most expensive component, often accounting for ~50% of total costs.
- Point-source capture: $46–$110/tCO₂
- Direct Air Capture (DAC): up to $1,000/tCO₂ (e.g., Sirona Technologies, Climeworks)
- BECCS: €100–200/tCO₂
- Nature-based: $5–$345/tCO₂, with forest-based options as low as €21/tCO₂
While nature-based and BECCS solutions are currently the most cost-effective, experts agree that point-source and DAC will likely dominate in the long term due to higher permanence and verifiability.
Transport and storage add further costs:
- Pipelines: $6–$60/tCO₂ depending on distance and location
- Shipping: $13–$23/tCO₂
- Storage: $1.50–$10/tCO₂ (onshore vs offshore); ocean storage even higher
- Utilisation: minimal when CO₂ is integrated into existing processes
To illustrate: at current DAC prices, offsetting the 7 tonnes emitted annually by the average German would cost ~$4,200 per person. Nationwide, that’s $354 billion—highlighting the critical need for cost reductions and scale.
Where is the global CC(U)S Market now?
The global CC(U)S market has seen significantly development over the past few year as, driven by a sharp increase in facilities and substantial investment, driving down prices and increasing capacity.
As of Q1 2024, there are 564 commercial CC(U)S facilities worldwide, though many remain in early development (330 facilities) or advanced stages (158), with only 33 under construction and 43 operational. This trend marks exponential growth, with a 190% rise in registered facilities since 2022, leading to a projected capture capacity of 421.39 metric tonnes per annum (MTPA) if all facilities become operational, an increase from the current 50.39 MTPA (Global CCS Institute, 2024).
In 2024, the market size for CC(U)S was reported to be $3.54 billion with the forecasted growth to result in a market size of $14.51 billion by 2032, reflecting a compound annual growth rate (CAGR) of 19.29% (Fortune Business Insights, 2024; Gupta & Sisodia, 2023). This CAGR can be contextualised using the example of Climeworks, with their new generation of technology that will reach costs as low as $250-350/tCO₂ (Climeworks, 2024). Taking the upper end of $350/tCO₂, and a market of $14.51 billion in 2032, this would correspond to approximately 41.46 million tonnes of CO₂ captured by 2032. If the $100/tCO₂ has been reached by then, this would corresponds to 145.1 million tonnes of CO₂ captured by 2032 - both amounts reflecting a conservative dent in the total necessary removal of 10GtCO₂ by 2050. Therefore, the CAGR of 19% can be designated as the minimum rate at which the market must grow in order to even come close to what is needed from the sector. Alongside the overall market, similar growth and potential can be observed in the rates of investment in CC(U)S technologies, with total investments reaching $11.3 billion in 2023 (BloombergNEF, 2024).
A key driver of early CC(U)S market growth, Frontier has leveraged its advanced market commitment to accelerate permanent carbon removal. The initiative has pledged over $1 billion in purchases between 2022 and 2030 (Kaplan, 2023), backed by industry giants like Stripe, Alphabet, Shopify, Meta, and McKinsey. By guaranteeing the purchase of carbon removal outputs once operational, Frontier provides emerging CC(U)S companies with a reliable revenue stream, de-risking investment and fostering innovation. The program prioritises durability (over 1,000 years of CO₂ storage), affordability, and scalability, strengthening the market foundation for long-term industry growth (Frontier Facilitates Fourth Round of Carbon Removal Prepurchases, n.d.). Its latest commitment, announced on December 17, 2024, includes an $80 million offtake agreement with U.S.-based CO280 and CREW Carbon (Frontier, 2024). This move underscores Frontier’s crucial role in driving CC(U)S forward—lowering market prices, attracting investment, and accelerating technological progress.
The European CC(U)S Market
The rapid expansion of the global CC(U)S market, coupled with Europe's leadership in ESG initiatives, has positioned key European players at the forefront of the industry. One such leader is Sirona Technologies, a Belgian DAC company pioneering low-CAPEX, factory-built solutions that capture CO₂ from ambient air using specialized chemical filters. In October 2024, Sirona shipped its first pilot plant to Kenya, demonstrating both cutting-edge innovation and the expanding global impact of European CC(U)S advancements (Sirona Technologies - Technology, n.d.).
To further illustrate the momentum of the European CC(U)S market, the following market map highlights key startups driving innovation in carbon capture. While not exhaustive, it showcases the sector’s diverse potential and underscores the urgent need to align CC(U)S development with evolving policy and regulatory frameworks. To achieve its ambitious CO₂ removal targets and reach a sub-$100/tCO₂ carbon price, Europe must take decisive action, scaling CC(U)S technologies in alignment with market demands.
Understanding The Market Map
This map highlights the diversity of European carbon capture start-ups, grouped by their focus:
- Capture only: either from industrial sources (point-source) or the atmosphere (DAC), with players like Neocarbon and Direct Carbon integrating into existing infrastructure or use cases.
- Capture + storage/utilisation: some solutions store CO₂ permanently (e.g. in concrete, biochar, or via BECCS), while others use it in fuels or forestry with shorter carbon cycles.
The key distinction lies in permanence: long-term storage offers higher climate impact but often at higher cost.
XAnge's Opinion
While low-cost, short-term solutions like point-source capture and non-permanent removal offer speed, the real long-term value lies in permanence. As regulatory frameworks increasingly reward durable carbon storage, the market will shift toward solutions that combine verifiability, scalability, and lasting impact.
That’s why at XAnge, we back technologies—like Sirona Technologies—that are built for permanence, aligned with future certification standards, and capable of delivering both climate impact and financial performance.
