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Public spending on carbon capture can be worthwhile when it helps prove a hard-to-decarbonize process, builds shared CO₂ transport and storage infrastructure, or enables durable emissions reductions that would not otherwise happen. But funding equipment or announcing projects is not the same as delivering climate benefits. Each proposal should be judged on verified lifecycle emissions results, total public cost, alternatives, delivery readiness and who bears long-term risks.
What public funding can do—and what it cannot prove
Carbon capture, utilisation and storage (CCUS) is a chain: a facility captures CO₂, then the CO₂ must be transported to a user or to a site where it can be stored. A capture unit by itself does not establish that emissions have been avoided. Missing pipelines, storage permits, suitable geology, an end user or a reliable buyer can delay a project or leave its equipment underused.
Public support can help address barriers that private investors may not take on alone: the upfront risk of a first-of-a-kind facility, the cost of infrastructure used by multiple emitters, uncertainty about storage resources, or questions about long-term liability. The International Energy Agency (IEA) says grants can play an important role in early deployment, particularly for first-of-a-kind projects and CO₂ transport and storage infrastructure. It also cautions that grants can burden public budgets and should be complemented by a durable operating framework.
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Why investment momentum is not the same as climate delivery
Recent financing indicators show increased activity, but a large share of the proposed project pipeline has not passed the investment decision needed to proceed. The IEA’s 2026 financing summary reports that CCUS investment had grown more than 15-fold since 2020 to over USD 5 billion in 2025, and that more than 30 projects reached final investment decision in the preceding two years. It also reports that around 90% of projects announced for 2035 had not yet reached final investment decision. Financing growth and projects at different development stages should not be read as a count of operating facilities or verified emissions reductions.
A separate, US-specific snapshot from the Congressional Budget Office (CBO), dated December 2023, illustrates the gap between operating capacity and a conditional pipeline:
| Measure | Reported figure | What it means |
|---|---|---|
| Operating US CCS facilities | 15 facilities; capacity equivalent to 0.4% of US annual CO₂ emissions | CBO’s December 2023 snapshot; capacity is not the same as actual annual capture or verified reductions. |
| Additional US facilities in construction or development | 121 facilities; if completed, capacity equivalent to 3% of current annual US CO₂ emissions | CBO’s 2023 conditional estimate, not operating or realized capacity. |
Project counts and nameplate capacity are useful indicators of activity, but neither answers whether a facility is running as planned, where its captured CO₂ goes, or how much net climate benefit it produces over its lifecycle.
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How governments support carbon capture
Different forms of support target different risks. The choice affects who carries cost and whether payments depend on results.
- Competitive grants and demonstrations: Help meet upfront capital costs and technical or commercial risk, especially for first-of-a-kind projects. The trade-off is direct pressure on public budgets; a grant does not, by itself, guarantee continuing operation or emissions performance.
- Tax credits and other performance-linked incentives: Can create a revenue stream linked to captured, used or stored CO₂. In a 2024 US Department of Energy (DOE) report, qualifying projects meeting prevailing-wage and apprenticeship requirements were described as eligible for Section 45Q values of USD 60 per metric ton for CO₂ captured and sent to utilization or secure geological storage in conjunction with enhanced oil recovery, and up to USD 85 per metric ton for geological storage not associated with enhanced oil recovery. The report said projects had to begin construction by the end of 2032 and that the credit could be claimed for the first 12 years of operation. These are report-era policy details, not confirmation of current law; check current eligibility and rules before relying on them.
- Shared transport and storage infrastructure: Public support can help coordinate pipelines and storage facilities whose economics depend on multiple emitters and sites. Hubs may spread costs and provide access to smaller emitters, but they also make projects interdependent: delays or failures in one part of the chain can affect others, and infrastructure may be stranded if users do not materialize.
- Storage-resource assessment: Public geological surveys and early appraisal can reduce uncertainty before private developers commit. Assessment takes time, and a mapped resource is not automatically a permitted, technically suitable or commercially developable storage site.
- Risk-sharing and liability frameworks: Governments may address risks that private markets are reluctant to carry, including long-term storage responsibility and cross-chain disruption. The IEA’s 2026 financing analysis argues that public support should become more targeted as operating experience develops.
These mechanisms are not interchangeable. A project may need a combination, but the public case should identify which barrier each instrument is meant to solve, the milestones attached to support and what happens if the project misses them.
What the public funding record says—and does not say
US federal support figures illustrate why appropriations, tax expenditures and spending should be distinguished. In its December 2023 report, CBO gave the following figures:
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| US federal support measure | Amount and period | Qualification |
|---|---|---|
| Regular appropriations for CCS research and related programs | USD 5.3 billion over 2011–2023 | CBO reports nominal dollars. |
| Advance appropriations for CCS programs | USD 8.2 billion over 2022–2026 | Provided by the Infrastructure Investment and Jobs Act; an appropriation period, not necessarily cash spent by the date of CBO’s report. |
| Reduced federal revenue associated with expanded Section 45Q credits | About USD 5 billion over 2023–2027 | Joint Committee on Taxation projection reported by CBO; a forecast, not an amount already paid. |
These measures describe different kinds of federal commitment and cannot simply be added as if they were equivalent completed expenditures. They also do not, on their own, establish how many verified tonnes a program has avoided or removed.
How to tell whether a project produces a climate benefit
Count net lifecycle emissions, not just captured CO₂
A credible estimate accounts for the energy used to capture, compress and transport CO₂, as well as relevant upstream emissions and what happens at the destination. The useful comparison is the net result against a realistic alternative for the same facility or product—not the gross amount entering capture equipment.
Distinguish utilization from durable storage
Using CO₂ is not automatically equivalent to preventing its release. The climate effect of utilization depends on the CO₂ source, the energy and other inputs used, the product it displaces, how long the carbon remains out of the atmosphere and the size of the market for that product. Some uses may delay release rather than store carbon durably; a claimed benefit therefore needs a lifecycle basis.
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For geological storage, a project needs a suitable site and a credible plan for site assessment, monitoring and verification. Long-term responsibility matters as well as the initial injection: the proposal should say who is liable and under what framework after operations end.
Require independent measurement and accountable milestones
Funding terms should make it possible to verify actual performance, not merely construction or projected capacity. Relevant milestones include permits, a functioning capture process, transport and storage arrangements, operating data, and independently checked tonnes avoided or durably removed. If the project misses a key dependency, the public should be able to see who absorbs the resulting cost and whether further support is conditional.
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A practical framework for comparing spending proposals
Apply the same questions to each candidate project. The following framework synthesizes the issues raised by the IEA, CBO and DOE; it is not a published universal scorecard or ranking.
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| Test | Questions for decision-makers |
|---|---|
| Climate result | How many tonnes are expected to be avoided or durably removed? How will actual results be measured and independently verified? |
| Lifecycle integrity | What emissions arise from energy, upstream supply, transport and end use? Is CO₂ stored durably, or used in a product that displaces a higher-emissions alternative? |
| Public cost | What is the total public commitment, including grants, tax expenditures and infrastructure support? What is the public cost per verified tonne, based on delivered results rather than a headline capture rate? |
| Alternatives | Are lower-cost or more mature options available for this facility or sector? What emissions reductions could the same public funds achieve elsewhere? |
| Learning and additionality | Is this a first-of-a-kind project or a meaningful demonstration that could reduce risk for later projects? Would it proceed without public support? |
| Delivery readiness | Are permits, buyers or offtake arrangements, transport and storage secured? Are milestones specific and accountable? |
| Risk allocation | Who bears construction, demand, cross-chain, leakage and long-term liability risks if assumptions fail? |
A strong case is one where expected verified benefits justify the full public commitment relative to alternatives, and where the project has credible routes to operation and durable CO₂ handling. A weak case relies on announced capacity or gross capture figures while leaving lifecycle accounting, infrastructure, buyers or long-term responsibility unresolved.
What scale-up scenarios can—and cannot—tell us
The IEA’s 2022 storage report said seven dedicated commercial-scale CO₂ storage sites were injecting around 10 million tonnes annually at its baseline. The report also cited 5.9 gigatonnes of captured CO₂ stored annually in 2050 in the IEA Net Zero Emissions by 2050 Scenario. That 2050 figure is a scenario, not a forecast or a statement of current capacity. It indicates the scale of storage envisioned in that pathway, while the much smaller baseline underscores that large-scale deployment depends on developing and operating storage infrastructure over time.
Scenarios can help governments examine what infrastructure and policy a pathway would require. They do not demonstrate that a particular project will be built, that its costs will fall as expected, or that carbon capture is the best use of funds in every sector.
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Public spending on carbon capture is most defensible when it addresses a clear barrier, delivers independently verifiable lifecycle reductions or durable removals, and has a transparent cost and risk allocation. It is least persuasive when support is justified by capture capacity or a long-range scenario alone, without secured transport and storage, a credible end use, alternatives analysis or a plan for long-term liability. The decision should turn on project-level performance and public value—not on whether carbon capture is promising in the abstract.
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