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  • Writer's pictureTariq Siddiqui,

CCS Project Development: Key Enabler for CCS Pathway

Updated: Jun 5, 2023

By Tariq Siddiqui

Upstream EP Advisors

The US Emission Challenge

The industrial sector in the US accounts for nearly 30% of US primary energy related CO2 emissions (~1360 MT CO2). The top five highest CO2 emitting industries account for 52% emission (ref-1):

  1. Chemical (20%)

  2. Refining (17%)

  3. Iron & Steel (7%)

  4. Food & Beverages (6%)

  5. Cement & lime (2%)

  6. All Other Manufacturing (31%)

  7. Non-Manufacturing Industrials (17%)

CCS as a Pathway for Deep Emission Reduction

The Carbon Capture and Storage (CCS) is the only feasible technology that can deliver deep emission reductions in many of the above industrial processes and prevent carbon dioxide (CO2) from being released in the atmosphere and achieve climate mitigation targets (ref-2). CCS is one of the four key pathways, to reduce industrial emissions identified by the U.S. Department of Energy (DOE) ref-3:

  1. Low Carbon Fuels

  2. Energy Efficiency

  3. Industrial Electrification

  4. Carbon Capture, Utilization & Storage

Barriers to CCS Project Development

The CCS technology has been in use since 1972, and additional 20+ global CCS projects have become operational since then. The technology, however has not scaled up at the rate required. There are several market failures (ref3) and risks that are barrier to the private investment and CCS scale-up, including:

  • Insufficient policy framework support

  • Insufficient value on carbon reduction (revenue model)

  • Coordination failure risk across the value chain (Capture, Transport and Storage)

  • Storage liability and other project risks (including hard-to-reduce risk).

US is the only country with very favorable policy framework including but not limited to 45Q tax credits that have recently increase to $85 and $60 / tonne for saline aquifer storage and EOR respectively. The favorable policy framework and government grants have increased the project pipeline in US.

CCS Project Developers Can Demystify and Help Reduce Risks

The CCS project can be complex, capital intensive and resource exhaustive. The CCS project developers help set-up and manage the CCS project in its entire value chain. They bring expertise in; capital project management, venture management and data analysis/integration skills. The structured project development process helps reduce project risks & cost and deliver the project, in summary:

1. Identify: Sources /Sinks and transportation opportunities

2. Assess: Range of feasible solutions for the entire value chain (capture, transport and storage

3. Select: One commercially viable ‘Development Concept’ option for FEED.

4. Define: Translate project concept into costed plan (FEED) to help make FID.

5. Execute: Detailed design, EPCM, delivers asset to owner start-up of injection.

6. Operate: Start-up of capture, transport and injection of CO2 (Class II & Class VI wells) and its monitoring & verification for ensuring safe storage without any leakage out of target zone.

7. Abandon/Close: Apply for project closure after meeting the requirement

The disaggregated hub & cluster business model helps project developers link many CO2 emitters with the CO2 transporters and storage operators, thus reducing risks. General Project risks (GPR) are managed by the project developer and hard-to-reduce (HTR) are transferred to the government, at least in near-term.

Characteristics of Successful CCS Projects That Overcame Barriers

The US accounts for most CCS projects; fourteen (14) are currently operational. The key enablers in US projects are:

  • Thirteen (13) sell CO2 for EOR (revenue stream)

  • Thirteen (13) capture CO2 from Natural Gas Plants (low cost capture)

  • Five (5) rely on low cost transport & storage (reduce the cost).

  • Four (4) projects also rely on tax / emission credits (revenue stream)

  • Three (3) also rely on government grant support (bridge the funding gap).

Future Trends in US CCS project Pipeline

Globally, there are 140+ CCS projects in various stages of development pipeline, 100+ in US. Following are the distinctive trends in CCS:

  • Most new CCS projects are dedicated storage in saline aquifer (historically EOR)

  • The newer projects are moving towards hard-to-abate industries (historically NGP)

  • More projects are moving offshore (historically onshore)

  • More projects are moving from stand alone to hub & cluster development (historically, stand-alone)


The CCS is only viable pathway that can provide deep emission cuts. Project developers can help set-up and operate CCS projects and mange project risks leading to scale-up. The barriers to CCS have restricted the required scale-up rate of CCS, the US regulatory policy has helped overcame some barriers and helped in upscaling. The growing US pipe of CCS projects indicate that CCS project development would be a crucial competence & capability, essential for the success of CCS pathway for emission reduction.


1. Industrial Decarbonization Roadmap - DOE

2. Carbon Capture Utilization & Storage – CCUS in Clean Energy Transition- Special report, IEA

3. Policy Priorities To Incentivize Large Scale Deployment of CCS- Global CCS Institute

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