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What went wrong? Learning from three decades of carbon capture, utilization and sequestration (CCUS) pilot and demonstration projects

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  • Wang, Nan
  • Akimoto, Keigo
  • Nemet, Gregory F.

Abstract

The delivery of operational clean energy projects at scales is essential for addressing climate change. Carbon capture and sequestration (CCUS) is among the most important clean technology, however, most CCUS projects initiated in the past three decades have failed. This study statistically evaluates the reasons for this unfavourable outcome by estimating a hazard model for 263 CCUS projects undertaken between 1995 and 2018. The results indicate that larger plant sizes increase the risk of CCUS projects being terminated or put on hold; increasing capacity by 1 Mt CO2/y increases the risk of failure by nearly 50%. We also examined the impact of technology push and market pull policies and found that existing support mechanisms have not been sufficient in mitigating the risks associated with project upscaling. CCUS deployment at the gigaton scale depends on substantially reducing project risk while increasing expectations of financial returns. Gradual upscaling, increased policy support, particularly for demonstrations of the viability of CCUS, while also building a market through carbon pricing would help remedy the current imbalance between risk and return. Increasing the expected payoffs for CCUS so that hundreds of real projects are brought on-line will require the co-evolution of technology innovation, institutions, investment, and deployment strategy for CCUS technology.

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  • Wang, Nan & Akimoto, Keigo & Nemet, Gregory F., 2021. "What went wrong? Learning from three decades of carbon capture, utilization and sequestration (CCUS) pilot and demonstration projects," Energy Policy, Elsevier, vol. 158(C).
    • Handle: RePEc:eee:enepol:v:158:y:2021:i:c:s030142152100416x
    DOI: 10.1016/j.enpol.2021.112546
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    6. Chen, Siyuan & Liu, Jiangfeng & Zhang, Qi & Teng, Fei & McLellan, Benjamin C., 2022. "A critical review on deployment planning and risk analysis of carbon capture, utilization, and storage (CCUS) toward carbon neutrality," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    7. Vladimir M. Matyushok & Anastasiia V. Sinelnikova & Sergey B. Matyushok & Diana Pamela Chavarry Galvez, 2024. "Carbon Capture and Storage in Hydrogen Production: World Experience and Growth of Export Opportunities of the Russian Hydrogen Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 507-516, January.
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    13. Jonathan Paul Marshall, 2022. "A Social Exploration of the West Australian Gorgon Gas, Carbon Capture and Storage Project," Clean Technol., MDPI, vol. 4(1), pages 1-24, February.
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    17. Fan, Wei & Ju, Liwei & Tan, Zhongfu & Li, Xiangguang & Zhang, Amin & Li, Xudong & Wang, Yueping, 2023. "Two-stage distributionally robust optimization model of integrated energy system group considering energy sharing and carbon transfer," Applied Energy, Elsevier, vol. 331(C).
    18. Jingjing Xie & Yujiao Xian & Guowei Jia, 2023. "An investigation into the public acceptance in China of carbon capture and storage (CCS) technology," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 28(5), pages 1-22, June.
    19. Yanbin Li & Yanting Sun & Yulin Kang & Feng Zhang & Junjie Zhang, 2023. "An Optimal Site Selection Framework for Near-Zero Carbon Emission Power Plants Based on Multiple Stakeholders," Energies, MDPI, vol. 16(2), pages 1-26, January.
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