Uneven Global Progress in Carbon Capture and Storage

The global rollout of carbon capture and storage (CCS) is advancing unevenly across major developing markets, driven by differences in regional policies, market conditions, and external risks, according to Wood Mackenzie. John Ferrier, senior analyst for CCUS at Wood Mackenzie, described a highly fragmented landscape where policy, economics, and project appetite move at varying speeds, creating a challenging picture for global CCS.

United States: Weakened Momentum

In the US, the optimism following the Inflation Reduction Act has cooled due to a shifting political environment that has moved focus away from decarbonisation. This has led to the withdrawal of funding for some projects, particularly affecting post-combustion capture applications. Policy uncertainty has weighed on parts of the project pipeline, though pockets of growth remain, especially in the power sector where demand from data centres could support future CCS deployment.

Europe: Slow but Steady Progress

Europe continues to advance CCS projects, but at a slower pace than initially anticipated. Ongoing policy support, including the EU’s Net Zero Industry Act targets and national subsidy schemes, remains a key driver despite persistent delays. The region is increasingly focusing on developing transport and storage infrastructure, though meeting long-term capacity targets remains a challenge.

Middle East: Geopolitical Risks and Slowdown

The outlook in the Middle East is complicated by geopolitical risks, including conflict and shifting priorities, which are expected to slow CCS deployment. Ahmed Eldemerdash, vice president for climate technology solutions at Baker Hughes, estimated that about 40% of projects in the region will slow down between now and 2030, with recovery potentially taking until the mid-2030s as governments redirect resources toward energy security and infrastructure rebuilding.

Global Economic Pressures

Rising costs linked to inflation and higher energy prices are putting pressure on CCS economics globally, further weighing on investment decisions. Together, these dynamics point to a sector that is advancing, but unevenly, shaped by a mix of regional policies, market conditions, and external risks.