Insights

The Return of a Once Unloved Technology

For years, carbon capture and storage (CCS) carried baggage. Costs were considered too high; regulation too uncertain; and public perception too negative. CCS was widely described as a last resort technology that might never scale.
That narrative is now shifting. Driven by industrial demand, policy incentives, and rapidly maturing subsurface opportunities, CCS is entering a second act. The technology is no longer a niche fix for hard-to-abate sectors. It is becoming a foundational component of industrial decarbonization, and investors are paying attention.

Why CCS Is Back on the Investment Map

Three forces are driving renewed confidence in CCS:

1. Hard realities of industrial emissions
Sectors such as cement, steel, chemicals, refineries, and waste-to-energy cannot reach net zero with renewables alone. They produce process emissions that are locked into their chemistry. CCS is often the only scalable pathway to reduce these emissions at the required speed.
As countries tighten climate targets, industrial companies are facing compliance pressure that can no longer be delayed.

2. Policy incentives with real financial weight
Governments are shifting from symbolic signals to material support. The United States offers up to 85 USD per tonne of captured CO2 under the updated 45Q scheme. The European Union is funding large-scale storage projects and cross-border CO2 networks. The UK, Norway, and the Netherlands are developing entire industrial clusters centered on shared CO2 transport and storage infrastructure.
These policies turn CCS into something investors care about: predictable cash flows.

3. Subsurface opportunities are expanding
Oil and gas companies have decades of experience managing geological reservoirs. Many are now repurposing depleted fields and saline aquifers for long-term CO2 storage.
This creates a new asset class: CO2 storage services. Companies can generate revenue by offering permanent storage capacity to industrial emitters or carbon removal providers.

From Compliance Cost to Value-Creating Asset

The traditional view of CCS was simple: a company emits CO2 and must pay to remove it.
The new reality is different. CCS can generate revenue in several ways:

• Storage fees charged to emitters, similar to waste management services

• Low-carbon product premiums such as green steel or low-carbon cement

• Carbon credits from verified removal or avoidance

• Long-term infrastructure returns from pipelines, hubs, and injection sites

This shift turns CCS into a more familiar type of infrastructure investment. Many investors already understand pipelines, injection wells, and long-term capacity contracts. CCS is becoming another infrastructure vertical within the energy transition.

Why CCS Matters for the Hydrogen Economy

Hydrogen and CCS are closely linked. Blue hydrogen, produced from natural gas with carbon capture, can provide large-scale clean hydrogen quickly. The debate has often been polarized between blue and green hydrogen. Investors, however, increasingly see them as complementary.

Blue hydrogen can provide initial scale and market formation, while green hydrogen ramps up supply as electrolyzer costs fall.

CCS also enables carbon-negative pathways when paired with biomass power plants or direct air capture. These removal credits could become one of the most valuable commodities of the next decade.

Challenges That Still Require Caution

Despite the momentum, CCS is not risk-free. Investors must navigate:

• Regulatory uncertainty about long-term liability

• Public acceptance concerns, particularly for onshore storage

• High capex for large-scale transport networks

• Complex permitting timelines

• Technology variability in capture efficiency and cost

The sector is entering a growth phase, but project selection and due diligence remain critical. CCS rewards disciplined investors who understand geological risk and can structure bankable commercial models.

A Look at the Global Landscape

Several regions are moving quickly:

• United States: The Inflation Reduction Act has turned CCS into a profitable business line for midstream companies, power plants, and heavy industry.

• Europe: Norway’s Northern Lights project is becoming a blueprint for shared CO2 hubs that serve multiple countries.

• Middle East: National oil companies are exploring CCS not only for enhanced oil recovery, but also for industrial decarbonization and carbon-negative potential when paired with natural hydrogen projects.

• Asia: Japan and South Korea are driving the development of regional CO2 shipping corridors.

A global CO2 market is beginning to take shape, supported by hubs, pipelines, and standardized contracts.

The Bottom Line

CCS is no longer a technology in search of a problem. It is a strategic instrument for decarbonizing the industrial base of the global economy. From cement to hydrogen to negative emissions, CCS underpins many pathways to net zero.
For investors, the key insight is simple: carbon capture is transitioning from a defensive cost measure to a proactive, revenue-generating asset class. The second act has begun, and early entrants may stand to benefit from a market that could reach hundreds of billions of dollars by the next decade.