Dropping the ball on carbon capture

1 October 2026

Despite significant investment, carbon capture projects look set to fall well short of global targets and have consistently overpromised and underdelivered. Andrew Warren suggests there is a good reason why these carbon reduction methods receive the full backing of the fossil fuel industry.

It is now over 40 years since the concept of capturing and storing carbon dioxide emissions caused by burning fossil fuels began to be talked up as a key way to keep the planet from overheating. Subsequently, it has been heavily promoted by oil and gas producers, primarily as a ‘woke’ method of extracting more fuel from oil or gas fields.

The International Energy Agency is projecting that by 2050, 7.6 gigatons of carbon will be captured every year, with almost all of it stored. Right now, the world’s 77 operating plants are capable of capturing just 64 million tons annually. That output would need to be multiplied many times over the next quarter-century to match the IEA’s projection.

Carbon Capture Utilisation & Storage (CCUS) traces its roots back to the 1960s, when oil companies began piping natural CO₂ into oil fields for enhanced oil recovery. Captured CO₂ is injected into old oil fields to help push yet more oil out of the ground.

Enhancing oil production remains its primary role. According to research from Oil Change International, almost 80% of operating carbon capture capacity globally uses captured CO₂ to produce more oil via Enhanced Oil Recovery. All this while many of the world’s largest CCUS projects are still being shown to overpromise and underdeliver.

Unmet expectations

Analysis after analysis has concluded that CCUS is not a major climate solution. By September 2023, even the International Energy Agency was conceding that the history of CCUS “has largely been one of underperformance and unmet expectations”.

Yet Big Oil consistently tells us that carbon capture is central to the fight against climate change. Chevron, for example, says that only CCUS will make a “lower carbon future possible”. Yet even one of its most avid cheerleaders, Exxon, last month conceded that it now estimates that global 2050 CCUS storage will be almost 36% lower than it was predicting in 2024.

Optimists reckon the technology remains in its infancy. But our real-world capabilities lag far behind our technical know-how.

“What is not well-established and basically doesn’t exist at scale is the commercial experience doing this,” says Danny Cullenward, an economist at the University of Pennsylvania’s Kleinman Center for Energy Policy. We need to “prove that it works; that it’s easy, that it’s cost-effective, that it can be deployed at large scale, that it works in lots of different places.”

That is the same conclusion that the UK House of Commons Public Accounts Committee reached back in 2017, scathing about the lack of support for initial CCUS projects. In 2021 the UK government was aspiring to see 30 million tons of CO₂ ‘stored’ by 2030. But in 2024 the National Audit Office was sternly warning that “while Government is expecting the technology to play a significant role over the next 20 years, there is not yet any CCUS infrastructure operating at a commercial level in the UK”.

Big spenders

The UK government is one of the biggest spenders supporting CCUS in the world. It has committed to spending £21.7bn to “establish a domestic CCUS industry to help achieve net zero”. This is financing three ‘Cluster-1’ projects: the HyNet Cluster focused on Liverpool Bay, and two East Coast ‘Clusters’ on Teesside and Humberside. Further ‘Cluster-2’ projects are intended to follow, notably the Acorn Project in Scotland.

Strictly speaking, only 25% of that money will actually be coming from the Treasury. The other 75% (around £16bn) is coming from sums found via increases in consumer bills – precisely the mechanism that the Government has just abandoned as inflationary for funding its (far smaller) residential ECO4 energy efficiency programme.

This has led to widespread criticisms from many commentators, including those that concede that in principle CCUS is desirable. Take the widely-respected Green Alliance, which in a recent magisterial report concludes that, whilst CCUS will be needed to decarbonise across the world, “this budget is not being spent strategically. It is expensive, unproven at commercial scale. And unlikely to see cost reductions at the levels of alternative strategies”. 

The same report emphasises that “the burden of funding CCUS should not increase the bills of poorer households. The fairer solution would be to rethink the funding, and move to a polluter pays model. That means that the original polluter pays instead. Particularly oil and gas companies”.

Tax breaks

The UK Government keeps pledging to phase out other fossil fuel subsidies to meet international and domestic commitments. But new funds and tax breaks (for CCUS and elsewhere) keep being introduced. These new funds also act as fossil fuel subsidies, directly undermining progress, all whilst ending other support measures.

The majority of CO₂ being captured today is not captured from power plants or industrial processes like steel or cement, which is how CCUS is often marketed. Instead, 67% of CO₂ captured today comes from gas or oil processing plants.

Today, the total installed capacity of carbon capture projects operating worldwide is reckoned theoretically to affect around 0.1% of global CO₂ emissions. However, many projects are operating substantially below anticipated capacity. The reasons for this are particular to each project. Some are constrained by the demand for CO₂ at the oil or gas projects that receive their captured CO₂. What cannot be sold is simply vented into the atmosphere.

All this indicates that some of the biggest plants operating today are failing to demonstrate that CCUS is a truly reliable means to reduce emissions. At present, it is mostly yet another way of transferring money – either via taxpayers or via households – into the ever-expanding pockets of the fossil fuel industry. No wonder they remain the biggest cheer leaders for CCUS. 

Andrew Warren chairs the British Energy Efficiency Federation