The New CO₂ Economy: CCU Technologies as Enablers of a Low-Carbon Future

In the past, due to the technological challenges associated with CCU, policy efforts primarily focused on sequestration, where CO₂ is captured and permanently stored by injecting it into geological formations (carbon capture and storage, CCS). However, there has been a noticeable shift in recent years towards policies that also promote and regulate the utilization of captured carbon. This shift highlights the ongoing technological advancements in CCU technologies and a broader recognition of their potential benefits.^[1]

Merely transitioning the energy system to sustainable sources is unlikely to be sufficient to achieve net-zero emissions by 2050. This is where CCU technologies come into play, with the potential not only to reduce emissions but also to lower raw material consumption and support the shift towards an efficient circular economy.

The focus of CCU technologies is to capture CO₂ from industrial sources or directly from the atmosphere and use it as a substitute for fossil carbon in the production of valuable goods. These technologies offer a wide range of potential applications with significant market potential. They could help meet the ongoing demand for carbon in the production of chemicals, fuels, and polymers, thereby paving the way for a sustainable future ^[1]

A promising approach in this regard is electrochemical CO₂ reduction.^[2] Learn more about this topic in our detailed article “CO₂ utilization: new technologies for converting CO₂ and why GIG Karasek opts for electrochemical reduction”.

The growing commitment to CO₂ conversion technologies is reflected in the increasing amount of private and public funding directed toward companies in this sector. In 2022, global venture capital investments in companies focused on CO₂ utilization amounted to nearly $500 million, representing about 20% of total venture capital investments in carbon capture, utilization, and storage (or CCUS).^[3]

US companies dominate these investments, accounting for approximately 80% of the cumulative total from 2015 to 2022. While fuel production remains the leading application for large-scale capture facilities, investments are evenly distributed across various utilization types, with roughly one-third of total investments going to fuels, chemicals, and building materials, respectively.

CO₂ storage in underground rock formations or depleted oil and gas fields has not yet been fully researched. Concerns remain about long-term safety, particularly the potential for leaks that could release CO₂ back into the atmosphere. Additionally, potential environmental risks, such as soil changes or impacts on groundwater, require further investigation.^[4]

Given these uncertainties, CO₂ utilization should be prioritized over CO₂ storage. However, certain conditions must be met to successfully implement and scale CCU technologies:

In many markets, the current cost of CO₂ emissions is too low to drive significant investment in CCU by companies. Without higher CO₂ pricing, there is insufficient economic incentive to introduce these technologies. Raising the price of CO₂ could significantly enhance the economic viability of CCU and promote the widespread adoption of these technologies.^[5]

The scalability of CCU technologies largely depends on the availability of sufficiently large and cost-effective CO₂ sources, such as those from industrial processes or power plants where significant amounts of CO₂ are emitted. To effectively tap into these sources, not only is an increase in the price of CO₂ necessary, but also financial incentives and comprehensive measures aimed at reducing capture costs, creating stable market conditions, and fostering targeted research and development.^[6]

In its latest status report dated March 20, 2023, the Intergovernmental Panel on Climate Change (IPCC 6) dedicates an entire chapter to carbon capture and utilization (CCU). This underscores the recognition of CCU as a crucial strategy for mitigating climate change. This classification has played a significant role in bringing CCU to the forefront of political discourse and driving the development of new or revised regulations.^[7]