US Carbon Capture Race: $77B Industry Shifts Global Balance

The carbon capture and storage (CCS) industry is experiencing unprecedented momentum in the United States, with more than 270 publicly announced carbon capture projects across the United States, representing a total of $77.5 billion in capital investment. This massive wave of investment signals a fundamental shift in how America approaches industrial decarbonization and energy security.

The sector's rapid expansion comes at a critical juncture. While Chevron, Engie, and GE Vernova came into a strategic partnership to develop a natural gas plant in the U.S. The plant with a capacity of around 4 GW will generate electricity by 2027 with the integration of CCS technology, federal funding cuts threaten to derail this progress. The Department of Energy recently canceled 10 major CCS demonstration projects, creating uncertainty in an otherwise thriving market.

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Industry Leaders Drive Transformation

Major corporations are positioning themselves at the forefront of this carbon management revolution. Occidental Petroleum (OXY) is a major player in the oil and gas industry. However, in recent years, the company has been transforming itself into a leader in carbon management solutions. The company's partnership with Carbon Engineering to construct the world's largest Direct Air Capture facility in Texas exemplifies the scale of private sector commitment to carbon solutions.

Similarly, ExxonMobil has emerged as a significant player in the space, leveraging decades of subsurface expertise to develop large-scale storage solutions. These industry giants recognize that carbon management technologies represent not just environmental necessity but also substantial business opportunity in the evolving energy landscape.

The Carbon Capture Coalition has been instrumental in building bipartisan support for these technologies. Their recent analysis shows that current 45Q tax credits, while effective for sectors like ethanol processing, fall short for higher-cost applications in cement, steel, and refining industries.

Figure 1: Current 45Q credit levels across most sectors are falling short of covering NOAK costs

Sources: https://carboncapturecoalition.org/wp-content/uploads/2025/05/45Q-analysis_v3-1.pdf; https://efifoundation.org/foundation-reports/analysis/unlocking-private-capital-for-ccs/

Market Dynamics Reveal Massive Growth Potential

Global market forecasts paint an optimistic picture for the industry's future. IDTechEx forecasting global CCUS capture capacity to reach 2.5 gigatonnes per annum by 2045. This represents a dramatic scaling from current deployment levels and underscores the technology's potential to address industrial emissions at unprecedented scale.

The financial trajectory is equally impressive. The global carbon capture and sequestration (CCS) market size is projected to grow from $4.51 billion in 2025 to $14.51 billion by 2032, at a CAGR of 18.18%. This growth rate significantly outpaces many traditional energy sectors and reflects accelerating commercial adoption across industries.

Federal Policy Creates Crossroads Moment

The industry faces a critical policy crossroads that will determine America's competitive position in global carbon management markets. Current federal initiatives have successfully catalyzed private investment, but recent actions threaten this momentum. The cancellation of major demonstration projects sends mixed signals to investors who have committed billions based on federal support signals.

Table 1. Unallocated IIJA funds intended as presented in the Presidential Budget Request of 2026.

Amount	Account	Program	Authorization
$2,084,700,000	Carbon Dioxide Transportation Infrastructure	Carbon Dioxide Transportation Infrastructure Finance and Innovation Program	Subtitle J, Title IX, EPAct 2005, amended by Sec. 40304
$68,640,068	Fossil Energy and Carbon Management	Front-End Engineering and Design, Carbon Capture Technology	Sec. 962, EPAct 2005, amended by Sec. 40303
$1,163,735,574	Fossil Energy and Carbon Management	Carbon Storage Validation and Testing	Sec. 963, EPAct 2005, amended by Sec. 40305
$2,002,474,357	Fossil Energy and Carbon Management	Regional Direct Air Capture Hubs	Sec. 969D, EPAct 2005, amended by Sec. 40308
$6,630,000	Fossil Energy and Carbon Management	Precommercial Direct Air Capture Prize Competitions	Sec. 969D(e)(2)(A), EPAct 2005
$66,705,000	Fossil Energy and Carbon Management	Commercial Direct Air Capture Prize Competitions	Sec. 969D(e)(2)(B), EPAct 2005
$573,319,000	Office of Clean Energy Demonstrations	Carbon Capture Large-Scale Pilot Projects	Sec. 962(b)(2)(B), EPAct 2005
$1,400,655,719	Office of Clean Energy Demonstrations	Carbon Capture Demonstration Projects Program	Sec. 962(b)(2)(C), EPAct 2005

State-level progress provides encouraging counterbalance to federal uncertainty. Texas, Arizona, and West Virginia have advanced their Class VI primacy applications, streamlining permitting processes for carbon storage projects. This regulatory clarity at the state level demonstrates how coordinated policy can accelerate deployment while maintaining safety standards.

The 45Q tax credit transferability provision has proven particularly effective in democratizing access to carbon capture investments. This mechanism allows smaller developers and startups to participate in the market by selling credits to larger investors, creating a more dynamic and competitive ecosystem.

Infrastructure Development Accelerates

Critical infrastructure components are advancing rapidly across multiple states. Louisiana's successful defense of its Class VI primacy in federal court strengthens the regulatory foundation for large-scale projects. Meanwhile, pipeline development initiatives are creating the transport networks necessary to connect capture sources with storage sites.

The integration of carbon capture with data center development presents a particularly intriguing opportunity. As technology giants expand their infrastructure to meet AI-driven power demands, pairing these facilities with carbon capture systems could address both computational needs and climate commitments simultaneously.

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Innovation Ecosystem Expands Rapidly

The breadth of innovation in carbon capture technologies continues to expand beyond traditional approaches. The UpLink Carbon Capture and Utilization challenge has identified 11 pioneereing startups offering ways of utilizing CO2 for industry decarbonization. These emerging companies are developing novel approaches to carbon utilization that transform waste CO2 into valuable products.

Research institutions and private companies are collaborating on breakthrough technologies across the entire carbon management value chain. From advanced solvents that reduce capture energy requirements to innovative storage monitoring systems, the pace of technological advancement continues accelerating.

Global Competition Intensifies

International competition in carbon management technologies is intensifying rapidly. While the Department of Energy canceled American demonstration projects, China announced seven major industrial and power CCUS projects within weeks. This timing contrast highlights the strategic importance of maintaining consistent federal support for American innovation.

Table 2: Canceled carbon capture projects announced May 30, 2025

Project Name	DOE Program	Technology	Sector	Award Execution Date	Total Award Amount	Total Including Private Capital	Project Location	Future Jobs Lost
Sutter Decarbonization Project, Capline	Carbon Capture Demonstration Program	CCS	Gas power + CCS	8/1/2024	$270,000,000	$540,000,000	Yuba City, CA	260
Baytown Carbon Capture and Storage Project, Calpine	Carbon Capture Demonstration Program	CCS	Gas Power	7/1/2024	$270,000,000	$540,000,000	Baytown, TX	280
Mitchell Cement Plant Decarbonization Project, Heidelberg Materials	Carbon Capture Demonstration Program	CCS	Cement	8/12/2024	$500,000,000	$1,000,000,000	Indiana	20–25 permanent, 1,000 construction
Carbon Capture Pilot at Vicksburg Containerboard Mill	Large Scale Carbon Capture Pilot Program	CCS	Pulp & Paper	9/1/2024	$4,304,715	$5,380,894	Vicksburg, MI	90 construction
Carbon Capture Pilot at Cane Run Generating Station	Large Scale Carbon Capture Pilot Program	CCS	Gas Power + CCS	9/1/2024	$72,016,473	$90,020,591	Louisville, KY	40–100 construction
Carbon Capture Pilot at Dry Fork Station	Large Scale Carbon Capture Pilot Program	CCS	Coal Power + CCS	8/1/2024	$49,032,200	$61,290,250	Gillette, WY	40–60 construction, 20–25 operational
Sustainable Ethylene from CO₂ Utilization with Renewable Energy	Industrial Demonstrations Program	CCS, Alternative Product	Chemicals	12/16/2024	$200,000,000	$400,000,000	Gulf Coast Location	40 permanent, 200 construction
Star e-Methanol, Orsted Star P2X LLC	Industrial Demonstrations Program	CCS, Alternative Product	Chemicals	12/9/2024	$99,000,000	$198,000,000	Chambers County, TX	350
Lebec Net Zero Cement Plant Project, National Cement Company of California, Inc.	Industrial Demonstrations Program	CCS	Cement	12/4/2024	$500,000,000	$1,000,000,000	Lebec, CA	25
Baytown Olefins Plant Carbon Reduction Project, Exxon Mobil	Industrial Demonstrations Program	Hydrogen, CCS	Chemicals	12/17/2024	$331,885,548	$663,771,096	Baytown, TX	300 construction, up-skilling

European markets are also advancing aggressively, with major projects become operational, including the world's largest capture project at a cement plant in Norway and the world's largest DAC plant in the United States. The global race for carbon management leadership requires sustained commitment and strategic coordination across government and industry.

American companies possess significant technical advantages built on decades of oil and gas expertise, but maintaining this edge requires continued investment in demonstration projects and supportive policy frameworks. The transferability provisions in tax credits and streamlined permitting processes are critical competitive tools.

Economic Multiplier Effects Drive Regional Growth

The economic impact of carbon capture projects extends far beyond direct employment. Every dollar of federal support generates up to four dollars in economic activity through equipment orders, construction contracts, and supply chain development. This multiplier effect creates sustained economic benefits for regional communities hosting these projects.

Manufacturing sectors benefit particularly strongly from carbon capture deployment. Cement, steel, and chemical companies can maintain competitiveness in global markets while meeting increasingly stringent environmental requirements. This dual benefit of environmental progress and economic preservation makes carbon capture politically attractive across diverse constituencies.

Job creation spans multiple skill levels and sectors, from construction and operations to advanced engineering and project management. Labor unions have recognized these opportunities, with major organizations endorsing carbon capture as a pathway to preserve high-quality industrial employment while advancing environmental goals.

Technology Integration Creates New Opportunities

The convergence of carbon capture with other emerging technologies is creating unprecedented opportunities for integrated solutions. The pairing of natural gas power generation with carbon capture provides reliable, low-carbon electricity that can support grid stability while accommodating renewable energy variability.

Direct air capture facilities are being designed to integrate with renewable energy systems, creating carbon-negative electricity generation during periods of excess renewable output. This approach maximizes the utilization of both technologies while providing grid services that support overall system reliability.

Industrial facilities are exploring carbon utilization pathways that transform captured CO2 into valuable chemicals, fuels, and materials. These approaches can improve project economics while creating new revenue streams that support ongoing operations and expansion.

Strategic Imperative for American Leadership

The carbon capture industry represents more than environmental technology, it embodies American innovation, economic opportunity, and strategic competitiveness. The $77.5 billion in committed investments demonstrates unprecedented private sector confidence in these technologies and their commercial potential.

Maintaining American leadership requires coordinated action across federal and state levels. Protecting existing incentives while enhancing support for next-generation deployment will determine whether American companies lead global carbon management markets or cede leadership to international competitors.

The stakes extend beyond individual projects to encompass America's position in the global clean technology economy. Countries that successfully deploy carbon capture at scale will possess significant advantages in manufacturing, energy production, and technology export markets that will define economic competitiveness for decades to come.