Carbon Capture and Hydrogen Are Finally Getting

CCS and Hydrogen: Pushing Forward, Not Just Hoping

Carbon capture and clean hydrogen are more than climate buzzwords. They’re evolving into serious tools for decarbonization. But progress is still bumpy. Costs remain high, permitting is messy, and timelines are painfully slow. The upside? Policy changes and stronger funding signals are finally helping these sectors inch closer to real viability.

According to S&P Global Commodity Insights, CCS is now seen as scalable and necessary for heavy-emission industries like cement, steel, and power. But real scale is still out of reach. Only 34 large-scale CCS projects are running today, and most are still tied to enhanced oil recovery. Growing this 50-fold isn’t incremental growth. It’s a leap.

Sally Benson, energy expert and Stanford Professor, puts it plainly: “CCS is not a silver bullet, but for decarbonizing heavy industry, it’s essential.”

45Q Tax Credit: Real Money on the Table

The updated 45Q tax credit—$85 per ton for geologic storage and $180 per ton for DAC — is starting to change the game. What used to be theory is now entering the boardroom. Still, the floodgates haven’t opened yet.

Permitting delays, especially with Class VI wells, and the slow disbursement of DOE grants are creating bottlenecks. But with the right location, a buyer ready, and enough capital runway, the numbers are beginning to pencil out.

Clean Hydrogen’s Ammonia Surge

Clean hydrogen is making moves, especially through ammonia. Over 70 percent of announced green hydrogen in heavy industry is headed for ammonia production. It’s used in fertilizer and is now gaining traction as a shipping fuel.

Pairing ammonia with CCS creates export potential and big carbon savings. Companies like Air Products and CF Industries are doubling down on U.S.-based projects, and global interest is strong.

Fatih Birol, IEA chief, said it clearly: “Hydrogen can be the missing link in the clean energy transition.”

>> In Other News: Entropy Enters Definitive Agreement to Purchase Strategic Carbon Storage Assets

The Real Price Tag of Capture

Capture can eat up 70 percent of total CCS project costs. Rising inflation and tight supply chains are pushing those numbers even higher—by an estimated 8 to 20 percent.

What makes a difference? Advanced solvents, smart site selection, and heat integration. These aren’t bonus features. They’re essential for making projects financially viable. For now, most successful projects are sticking close to easier sources like ethanol or ammonia facilities.

Carbon Markets: A Sliver of Hope

Voluntary carbon markets are opening up real opportunities, especially for BECCS. Carbon removal credits are drawing big corporate buyers. Microsoft alone has committed to over 6.7 million metric tons of CDR from a single project in Louisiana.

The demand is solid. The supply still isn’t there.

Direct Air Capture: From Fringe to Focus

DAC was once a wild idea. Now it’s inching toward reality. Thanks to IRA incentives and private capital, U.S. companies like Heirloom and CarbonCapture Inc. are moving from theory to field deployment.

The costs are still steep—$400 to $600 per ton—but DAC is modular, permanent, and not tied to geography. Most importantly, it handles legacy emissions. No other solution offers that.

CCS Hubs, Risk Models, and What’s Working

Shared infrastructure is becoming a smarter play. CCS hubs reduce risk and lower costs by pooling compression, transport, and storage systems.

The Harvestone Blue Flint project in North Dakota is a prime example. It raised $205 million in tax equity, used centralized infrastructure, had a tight CO₂ source, and followed IRA-aligned design principles. It’s a solid model worth replicating.

Global CCS Projects Snapshot (2025)

Region	Projects Announced	Advanced Stage	Capture Capacity (MMtCO₂)
North America	126	32	21.5
Europe	98	24	17.8
Asia Pacific	76	15	13.2
Middle East	34	5	5.9

What Needs to Change

The pace is still too slow. Permitting is stuck in a maze of federal and state red tape, public resistance, and overwhelmed agencies. Meanwhile, investment timelines are long and tech costs aren’t dropping fast enough.

Still, momentum is shifting. Over 42 active or pending CCS-supportive policies are on the table worldwide. Billions are being funneled into clean hydrogen infrastructure. The U.S. has a lead position—but only if it keeps pushing.

Jennifer Wilcox, Principal Deputy Assistant Secretary for Fossil Energy and Carbon Management at the U.S. Department of Energy: “To hit net-zero, we need to pull carbon from the air and the stack. CCS is a key part of that toolkit.”

Selected Policy Mechanisms Supporting CCS Deployment

Jurisdiction	Policy Tool	Description
United States	45Q Tax Credit	Provides up to $85/ton for CO₂ storage and $180/ton for direct air capture. Includes direct pay and credit transferability options.
Canada	Investment Tax Credit	Supports capital investment in CCS with up to 50% tax credit for eligible expenses.
European Union	Carbon Contracts for Difference	Guarantees a fixed carbon price to reduce revenue uncertainty for CCS developers.
United Kingdom	Cluster Sequencing Support	Government-backed funding to advance CCS infrastructure in industrial clusters.
Japan	Green Innovation Fund	Financial support for large-scale CCS demonstration projects and R&D.

Final Take

Carbon capture and clean hydrogen aren’t simple, and they aren’t cheap. But they’re real. And they’re necessary.

They’re not perfect, but they’re what’s available. The way forward is clear—build smarter, scale faster, and stop dragging our feet. This isn’t a fad. This is infrastructure for climate action. And it needs to accelerate now.

Carbon Capture and Hydrogen Are Finally Getting Real - But Still Too Slow