The United States has stood as a leader in carbon management technologies, boasting an installed capacity to capture over 20 million metric tons of carbon emissions per year. This figure represents nearly half of the global total, indicating the nation’s significant role in the ongoing effort to mitigate climate change.
Carbon management encompasses a variety of technologies aimed at capturing, utilizing, or storing carbon emissions from industrial sources, a process known as CCUS (carbon capture, utilization, and storage), as well as removing carbon directly from the atmosphere, termed carbon dioxide removal (CDR).
Historically, U.S. advancements in carbon management have been supported by stable policy frameworks, advantageous geological formations ideal for carbon storage, a skilled workforce, and successful pilot and commercial-scale demonstrations. However, as priorities shift within the U.S., concerns arise regarding the nation’s ability to maintain its leadership position amidst growing competition from other countries that are scaling up their CCUS deployment efforts.
Furthermore, the economic implications of succeeding in carbon management are substantial. A 2022 Department of Energy (DOE) report suggests that achieving carbon capture deployment between 500 to 1,200 Mtpa could contribute between $75 to $110 billion to the U.S. economy by 2030, with projections of reaching $600 billion to $1.5 trillion by 2050.
This expanding field also indicates significant job creation potential, estimated at 200,000 to 300,000 direct job-years in the short term, escalating to a cumulative total of 3 million direct job-years by 2050. Notably, the capture segment of the carbon management value chain is expected to drive over 90 percent of job creation, correlating to engineering, manufacturing, construction, operation, and maintenance of capture facilities.
Looking globally, the International Energy Agency has forecasted that approximately 7.6 gigatons of carbon emissions will need to be captured annually to achieve net-zero emissions by 2050. To illustrate the enormous market potential, the U.S. would need to manufacture 14 million tons of monoethanolamine (MEA), a common carbon capture solvent, to support about one-fourth of this global market, or 2 gigatons, for carbon capture.
With U.S. production of ethanolamines estimated at only 0.7 million tons in 2019, primarily for non-CCUS uses, this indicates the scale of growth needed in the supply chain to meet burgeoning demand for carbon capture solutions. However, to unlock these opportunities, proactive investment and a supportive industrial policy are crucial for U.S. CCUS manufacturers and technology developers.
Most jobs generated in carbon management will emerge from the capture phase, which also represents the majority of costs involved in CCUS systems. Estimates indicate that capture costs can account for as much as 90 percent of the total costs linked to avoided or sequestered CO2.
Although downstream activities—such as selling storage credits and utilizing CO2 for enhanced oil recovery—provide revenue and value creation, none of these are viable without economically feasible capture at a large scale.
To ensure a competitive carbon capture industry that fosters domestic growth while enabling technology exports, the U.S. must focus on ongoing innovation and supply chain development that ultimately drive down capture costs.
The complexity of capture costs illustrates challenges the industry faces. While external factors—such as the CO2 stream’s concentration and partial pressure—impact costs, research is ongoing to improve capture technologies and mitigate their cost burden on the carbon management value chain. Capital expenses associated with absorbent towers often account for around 40 percent of total capital expenditures, while operating costs mainly arise from the reboiler and other energy-dependent components. The reboiler alone is responsible for a staggering 68 percent of total costs when considering both capital and operating figures.
These insights emphasize the materials and energy intensity of present carbon capture methods, reinforcing the urgent need for continued innovation aimed at developing more efficient capture materials, processes, and designs.
Despite solvent-based capture technologies being the prevailing method currently, various other promising options are undergoing research and development. Each of these novel materials and methods presents distinct advantages and challenges in driving down capture costs further.
A diverse array of technology not only enhances the sector’s adaptability but also holds potential for significant domestic value creation in carbon management, which can occur without encountering global supply chain bottlenecks. According to a DOE Supply Chain Risk Assessment, the carbon management sector is not expected to face significant supply chain risks even in high-growth scenarios due to the robust and mature domestic industries backing key inputs, such as chemicals and equipment.
This contrasts sharply with other clean technology sectors where geographic concentrations of materials create sourcing complications. The United States stands to capitalize on its advantageous conditions and diverse technological landscape to scale carbon capture successfully; however, these advantages alone may not be sufficient to secure long-term leadership.
International competition is on the rise, with countries like China making notable progress in carbon management technologies. China understands the strategic importance of CCUS for both bolstering its economy and achieving industrial competitiveness in a sustainable manner. As of September 2023, China has more than 100 CCUS demonstration projects in the works, with operational capacity surpassing 6 Mtpa.
The nation has been swiftly filing patents as well, with Chinese entities accounting for nearly three-quarters of global CCUS patents in 2022. This surge in innovation serves to enhance the efficiency of large-scale demonstration projects, exemplified by the Huaneng Longdong project, which stands to be the world’s largest coal-fired CCUS facility with a capture capacity of 1.5 Mtpa.
Such advancements could enable Chinese firms to solidify their presence in the carbon capture markets, similar to their trajectory in other clean energy technologies, something that could catalyze a renewed U.S. focus on carbon management.
Europe is also actively pursuing ambitious deployment goals that could either amplify U.S. opportunities or pose a competitive threat. The European Commission has adopted an Industrial Carbon Management Strategy aiming to ramp up CO2 storage capacity from 3 Mtpa to 50 Mtpa by 2030 and over 250 Mtpa by 2040.
This strategy is backed by climate legislation and concrete regulatory frameworks, in addition to carbon pricing and investment in infrastructure across Europe. Countries including the United Kingdom, Norway, and the Netherlands are leading the way with major capture projects that combine public funding with private sector initiatives to foster the commercial viability of carbon capture on a large scale.
As a result, Europe is developing a rapidly growing pipeline with over 100 Mtpa of CCUS capacity anticipated to be under construction or development by 2030, setting the stage for the region to emerge as a competitive player in the carbon management field.
In contrast, the U.S. is sending mixed signals amidst the 130 announced facilities currently under development, which collectively have a capacity exceeding 130 Mtpa and involve approximately $77.5 billion in promised capital expenditures.
Recently, the DOE terminated $3.7 billion in grants designated for industrial decarbonization projects, primarily affecting those aimed at carbon capture. Additionally, changes in staffing and leadership at national laboratories working on carbon capture innovations have raised concerns regarding future advancements in the field.
On a more positive note, recent legislation has provided a modest boost to the 45Q tax credit benefiting carbon utilization and enhanced oil recovery, and the EPA is in the process of designating Texas as the sixth state to manage Class VI carbon storage wells. However, despite these developments, the political rhetoric surrounding carbon management remains subdued.
The U.S. now stands at a pivotal moment. As the nation seeks to utilize its existing lead in carbon management to innovate next-generation capture technologies, there exists an opportunity to strengthen supply chains and establish itself as the global leader in carbon management solutions.
To capitalize on these prospects and maintain its leadership position, the current administration should undertake decisive actions focused on low-regret, high-impact initiatives that will facilitate near-term CCUS deployment while bolstering U.S. economic growth and energy security.
One imperative action is to support the establishment of infrastructure for carbon capture projects in ethanol plants. Streamlining permits and enhancing public awareness can reduce friction to streamline the deployment of these technologies. As ethanol facilities emit nearly pure streams of CO₂, they represent excellent candidates for deploying pre-combustion capture technologies.
Minimizing challenges in permitting, particularly across state lines, and improving public acceptance could unlock billions of dollars in private investment and foster shared carbon infrastructure that benefits emerging low-carbon industries like cement and fertilizers.
Furthermore, the administration should recognize carbon capture as a key enabler for clean power generation, particularly for AI data centers. By acknowledging CCS-equipped facilities through executive orders or establishing fast-track permitting processes, the U.S. can encourage the development of ‘CCS-ready’ power plants.
This approach will capitalize on the significant demand for clean energy to drive the commercialization of emerging energy technologies, thus meeting the clean procurement goals of major technology companies.
Additionally, a strong U.S. carbon capture export strategy should be established, mobilizing agencies such as the Development Finance Corporation and the Export-Import Bank to facilitate international deployment of U.S. carbon capture technologies.
Historically, these institutions have overlooked carbon capture, but they could be pivotal in preparing U.S. firms to compete in overseas markets such as Brazil, which aims to decarbonize its industrial base, and Europe, which is pursuing low-carbon materials.
Southeast Asian nations, including Indonesia and Malaysia, present significant opportunities as well due to their ambitious CCUS targets and favorable geological conditions for storage.
Through strategic partnerships and setting performance standards, the U.S. can ensure that American companies are the primary influencers of global CCUS value chains, thus reinforcing its competitive edge in this transformative and vital sector.
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