Will carbon capture market start growing?

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The carbon capture market is finally hitting its stride, moving from experimental technology to commercial reality with a clear path to massive scale.

With the market valued at USD 3.87 billion in 2025 and regulatory tailwinds accelerating deployment, smart entrepreneurs and investors are positioning themselves before the exponential growth phase begins. And if you need to understand this market in 30 minutes with the latest information, you can download our quick market pitch.

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What is the actual size of the carbon capture market today and how did it evolve during 2024?

The global carbon capture and sequestration market reached USD 3.87 billion in 2025, up from USD 3.24 billion in 2024—a solid 19.5% year-over-year growth that reflects the transition from pilot projects to commercial deployment.

During 2024, the market nearly doubled compared to 2019 levels, driven primarily by large-scale post-combustion facilities coming online and the first wave of direct air capture projects reaching operational status. North America maintained its leadership position with 37.6% market share, while Asia-Pacific emerged as the fastest-growing region.

The growth trajectory accelerated in late 2024 as major industrial players began integrating carbon capture into their decarbonization strategies rather than treating it as an experimental add-on. This shift from technology demonstration to commercial necessity created the foundation for sustained market expansion.

Infrastructure build-outs dominated the 2024 evolution, with companies focusing on shared capture hubs and pipeline networks that reduce per-project capital expenditure. The maturation of permitting processes and standardization of Class VI injection wells also removed significant deployment bottlenecks.

How much investment has gone into carbon capture so far in 2025 and how does that compare with 2024?

Investment flows in 2025 show strong momentum despite a more selective funding environment, with USD 1.46 billion in government grants already awarded through mid-2025 DOE pilot and demonstration programs.

This compares favorably to 2024's record USD 6.4 billion total investment across 628 CCS projects globally—a threefold increase from 2022 levels. The 2025 pace suggests the market will match or exceed 2024's investment volume, particularly when private commitments and international funding are included.

Government backing remains the primary catalyst, with the US Inflation Reduction Act's enhanced 45Q tax credits mobilizing private capital at unprecedented scale. The UK's £28.6 million National Wealth Fund investment and EU LIFE program funding add significant international momentum.

The investment mix has shifted toward later-stage projects with proven technology and secured offtake agreements, indicating market maturation beyond purely speculative ventures. Private equity and infrastructure funds are increasingly participating alongside government grants, creating more robust project financing structures.

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What are the forecasts for market growth in 2026, and what are the credible projections for the next 5 and 10 years?

The carbon capture market is projected to reach USD 4.60 billion in 2026, maintaining the robust 18.8% compound annual growth rate established over the past three years.

Five-year projections point to USD 9.17 billion by 2030, driven by the deployment of integrated industrial clusters and the scaling of direct air capture technology. The range reflects varying definitions of market scope—pure capture technology versus full carbon capture, utilization, and storage systems.

Ten-year forecasts span USD 18.17 billion to USD 50.70 billion by 2034, with the wide range reflecting uncertainty about policy continuity and technological breakthrough timing. The higher estimates assume successful deployment of next-generation capture technologies and global carbon pricing mechanisms.

Market growth will likely follow an S-curve pattern, with accelerating deployment from 2026-2030 as costs reach grid parity for power applications and industrial necessity drives adoption in cement and steel production. The period from 2030-2035 represents the potential exponential phase if regulatory frameworks align globally.

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What industries or sectors are currently driving demand for carbon capture technologies?

Four primary sectors dominate current carbon capture demand, each driven by distinct economic and regulatory factors that create sustainable market pull.

Industry	Current Application	Growth Driver & Market Context
Oil & Gas	Enhanced oil recovery (EOR) and natural gas processing	Immediate revenue from CO₂ sales, existing infrastructure, proven ROI models
Power Generation	Coal and gas-fired plants with post-combustion capture	Grid reliability requirements, stranded asset protection, 45Q tax credits
Cement	Process emissions capture from limestone calcination	No alternative decarbonization pathway, EU CBAM pressure, 41% of industrial CO₂
Steel	Blast furnace and direct reduction iron processes	Hard-to-abate sector, corporate procurement requirements, trade exposure
Hydrogen	Blue hydrogen production with integrated CCS	Bridge technology to green hydrogen, industrial feedstock demand
Chemicals	Ammonia, methanol, and ethylene production	Process integration opportunities, feedstock utilization potential
Direct Air Capture	Atmospheric CO₂ removal for carbon credits	Corporate net-zero commitments, permanent storage premium pricing

Where is most of the carbon capture activity happening geographically and are any new regions emerging?

North America leads global carbon capture deployment with 37.6% market share in 2024, driven by the world's most generous policy framework and established oil field infrastructure for CO₂ storage.

The United States dominates through the enhanced 45Q tax credit system providing up to USD 120 per ton of captured CO₂, combined with USD 9 billion in available DOE funding for pilot and demonstration projects. Texas and Louisiana host the majority of operational facilities due to Gulf Coast geology and petrochemical industry concentration.

Europe represents the second-largest market with aggressive deployment targets including the EU's 50 million tons of annual storage capacity by 2030. The UK's £21.7 billion commitment over 25 years and Norway's Sleipner project legacy provide the foundation for North Sea storage hub development.

Asia-Pacific shows the fastest growth rate, led by China's 2060 carbon neutrality pledge and Japan's industrial decarbonization requirements. The Middle East emerges as a key player through Abu Dhabi's partnership with Occidental Petroleum for direct air capture deployment.

Australia's Bonaparte CCS project and emerging Southeast Asian initiatives suggest new regional hubs developing around natural gas processing and LNG export facilities.

What are the main growth drivers that will realistically push this market forward in the near term?

Three interconnected drivers create a compounding effect that accelerates market adoption beyond linear growth projections.

Policy incentives provide the primary catalyst, with the US 45Q tax credits offering up to USD 85-120 per ton of captured CO₂ creating immediate project economics. The EU Innovation Fund and national wealth funds add international momentum, while carbon border adjustment mechanisms create compliance demand.

Industrial necessity drives adoption in hard-to-abate sectors where carbon capture represents the only viable decarbonization pathway. Cement and steel production face no alternative technologies at commercial scale, making capture deployment inevitable rather than optional for companies facing regulatory or procurement pressure.

Shared infrastructure development reduces individual project costs through capture hubs and pipeline networks. The hub model allows smaller industrial emitters to access capture technology without building dedicated infrastructure, expanding the addressable market significantly.

Corporate net-zero commitments create sustained demand for high-quality carbon removal, particularly from direct air capture projects that provide permanent storage guarantees. This corporate demand underwrites project development independent of government incentives.

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What are the biggest regulatory supports or incentives that can materially impact this market?

The United States provides the world's most comprehensive regulatory support through the enhanced 45Q tax credit system, offering up to USD 120 per ton for direct air capture and USD 85 per ton for industrial point sources.

DOE funding programs add another layer with USD 860 million already awarded and USD 9 billion available for pilot, demonstration, and commercial deployment projects. This creates a dual-incentive system that supports both technology development and commercial deployment phases.

The European Union's Net-Zero Industry Act mandates 50 million tons of annual CO₂ storage capacity by 2030, backed by Innovation Fund grants and LIFE program funding. The Carbon Border Adjustment Mechanism creates indirect support by requiring carbon accounting for imports.

The UK's £21.7 billion commitment over 25 years provides long-term investment certainty, while National Wealth Fund investments target specific industrial clusters. Class VI permitting streamlining in multiple jurisdictions removes a significant deployment bottleneck.

Carbon pricing mechanisms in California, Quebec, and the EU create market-based incentives that complement direct subsidies, while renewable portfolio standards increasingly recognize carbon capture as eligible technology.

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What are the most significant technological or engineering challenges still holding the industry back?

Energy penalties remain the most fundamental challenge, with capture processes consuming 20-30% of a facility's total energy output and driving operating costs above USD 100 per ton in many applications.

Solvent and sorbent degradation creates ongoing operational challenges, requiring regular replacement of expensive materials and energy-intensive regeneration cycles. Current amine-based systems show performance degradation over 2-3 years of continuous operation.

CO₂ transport and storage infrastructure lags behind capture technology development, with lengthy Class VI permitting processes and limited pipeline networks creating deployment bottlenecks. Public acceptance of CO₂ transportation remains a significant hurdle in densely populated areas.

Materials science limitations constrain the development of next-generation capture technologies, particularly for direct air capture applications where low CO₂ concentrations require specialized sorbents. Corrosion resistance and thermal stability improvements could unlock significant cost reductions.

Integration complexity increases with retrofit applications, where existing industrial processes must accommodate capture systems without compromising production efficiency. This engineering challenge multiplies project costs and extends deployment timelines.

How mature and scalable are the current carbon capture technologies, and what's the pipeline for innovation?

Post-combustion capture using amine scrubbing has reached commercial maturity (TRL 7-9) with multiple operational facilities demonstrating reliable performance at industrial scale.

Pre-combustion capture and oxy-fuel combustion technologies operate at similar maturity levels but face higher capital costs and integration complexity. These technologies work best in new-build applications rather than retrofits.

Direct air capture represents the emerging frontier at TRL 5-7, with Climeworks and other companies scaling from demonstration to early commercial deployment. Solid sorbent and liquid solvent approaches compete for cost leadership in the 1-10 kiloton per year scale.

The innovation pipeline includes advanced materials like metal-organic frameworks, biological capture systems using engineered algae, and mineralization technologies that convert CO₂ directly to stable carbonates. Microbial conversion approaches from companies like LanzaTech show promise for utilization pathways.

Modular and standardized designs are emerging to reduce deployment costs and accelerate project timelines. Prefabricated capture units allow for factory construction and rapid site installation, potentially cutting capital costs by 20-30%.

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What companies or players are leading the market today and what share do they hold?

The carbon capture market remains fragmented across technology segments, with no single dominant player controlling more than 15% of overall market share.

Company	Primary Focus Area	Market Position & Estimated Share
ExxonMobil / Occidental	EOR and saline aquifer sequestration	~15% combined, leveraging oil field expertise and existing infrastructure
Shell	Post-combustion CCS for industrial applications	~10%, focusing on integrated energy company strategy
Climeworks	Direct air capture technology	20 kilotons/year capacity, leading DAC deployment globally
Aker Carbon Capture	Industrial post-combustion systems	~5%, specializing in cement and waste-to-energy applications
Carbon Clean	Modular industrial capture solutions	~8%, targeting mid-scale industrial emitters
Fluor Corporation	Engineering and construction services	Significant project pipeline, focus on large-scale deployment
Mitsubishi Heavy Industries	Post-combustion capture technology	Strong in Asia-Pacific market, power sector focus

What are the typical costs per ton of carbon captured today and how are those expected to evolve?

Current carbon capture costs vary significantly by technology and application, with post-combustion systems ranging from USD 40-120 per ton of CO₂ depending on concentration and scale.

Direct air capture represents the high end at USD 200-600 per ton, reflecting the energy intensity required to extract CO₂ from atmospheric concentrations of 420 parts per million. Leading operators like Climeworks target USD 100-150 per ton by 2030 through improved efficiency and scale economics.

Industrial point sources with high CO₂ concentrations offer the most attractive economics, with cement and steel applications potentially reaching USD 30-50 per ton at large scale. Natural gas processing facilities achieve even lower costs due to high-purity CO₂ streams.

Cost reduction trajectories suggest 20-40% decreases by 2030 through learning curve effects, improved materials, and standardized deployment approaches. Energy integration improvements could provide additional 10-20% cost reductions by optimizing heat recovery and process efficiency.

Transport and storage costs add USD 10-20 per ton in most applications, with shared infrastructure reducing these expenses for hub-based deployments. Enhanced oil recovery applications can offset capture costs through CO₂ sales revenue.

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What tangible signs separate real market traction from hype or inflated expectations in this space?

Commissioned large-scale facilities with multi-year operational records provide the clearest evidence of real market traction, distinguishing proven technology from promotional announcements.

• Signed offtake agreements: Projects with secured revenue streams through enhanced oil recovery contracts, carbon credit sales, or industrial utilization demonstrate commercial viability beyond speculative development.
• Public-private partnerships: Joint ventures with clear financing structures, defined permitting pathways, and shared risk allocation indicate serious commitment from experienced players.
• Demonstrated cost reductions: Operators showing measurable performance improvements and cost decreases through pilot project data rather than theoretical projections.
• Regulatory milestone completion: Projects that have successfully navigated Class VI permitting, environmental impact assessments, and other regulatory requirements.
• Integrated industrial deployment: Facilities where carbon capture is integrated into core business operations rather than standalone demonstration projects.

Hype signals include unfunded pipeline announcements without secured investment or offtake agreements, overly aggressive technology readiness level claims without supporting pilot data, and project timelines that ignore permitting bottlenecks and infrastructure development requirements.

The presence of repeat investors and strategic partnerships with established industrial companies indicates sophisticated due diligence and realistic commercial prospects rather than speculative investment.

Conclusion

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Sources

1. Precedence Research - Carbon Capture and Sequestration Market
2. IMARC Group - Carbon Capture Storage Market
3. Precedence Research - Carbon Capture and Storage Market
4. Precedence Research - Post-Combustion Carbon Capture Market
5. World Economic Forum - Carbon Capture Storage Essentials
6. Carbon Capture Coalition - Federal Policy Blueprint
7. Reuters - UK National Wealth Fund Investment
8. CO2CRC - CCS Insights Newsletter
9. BloombergNEF - CCUS Market Outlook
10. DNV - Turning Point for CCS Report
11. European Commission - CO2 Storage Solutions
12. Soletair Power - Carbon Capture Landscape 2025
13. Carbon Herald - EU LIFE Program Funding
14. UK Parliament - Carbon Capture and Storage Debate
15. Clean Air Task Force - CCS Opportunities
16. IDTechEx - CCUS Markets Research