Relying on soil-based carbon capture to offset livestock emissions is risky

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Key points:

  • Soil carbon sequestration is the process through which atmospheric carbon dioxide is captured and stored in soil, forming part of the natural global carbon cycle.
  • In undisturbed natural ecosystems, carbon may be stored in the soil for thousands of years. However, the conversion of natural land into farmland has depleted soil organic carbon stocks and released this stored carbon into the atmosphere.
  • Livestock grazing systems are responsible for the loss of significant amounts of soil carbon over the past six decades.
  • Regenerative grazing – which involves rotating livestock on land for short durations – has been proposed as a solution for improving soil carbon stocks and offsetting emissions from livestock farming.
  • Recent estimates suggest that improved grazing management could potentially take-up around 63  gigatons (billion metric tons) of carbon in vegetation and soils.
  • However, once methane and nitrous oxide emissions from grazing animals are considered, an estimated 135 gigatons of carbon take-up would be needed to offset these emissions.
  • Relying on soil carbon sequestration to offset emissions from grazing systems is risky as carbon storage is finite and reversible, and increased emissions of methane and nitrous oxide could offset any gains from carbon sequestered in the soil. The impacts of regenerative grazing are also highly context-dependent.
  • Despite uncertainties, sequestering carbon in soil could contribute to climate change mitigation in the medium term in certain regions of the world.
  • Management practices aimed at maintaining or improving soil carbon offer other benefits, such as improved soil health, erosion control and reduced emissions intensity, with positive outcomes for yields and farmers’ incomes.


Soil carbon sequestration: the basics

Soil carbon sequestration is the process through which atmospheric carbon dioxide is captured and stored in soil. Plants capture atmospheric carbon dioxide through photosynthesis, and the carbon is stored in its organic form in plant tissues while the oxygen is released back into the atmosphere. As the leaves, roots and other tissues of plants decay, the carbon contained in these tissues is released into the soil through microbial activity, enriching the soil carbon pool. The carbon pool is also enriched through the exchange of carbon between plant roots and soil microbes.

Soil carbon sequestration is a natural process that forms a critical part of the global carbon cycle – whereby carbon is exchanged among all life on earth, the soil, water, minerals and the atmosphere. Soil organic carbon is important because it regulates the functioning of ecosystems, provides energy for soil microorganisms and improves the structure of soil. It is also an important carbon sink – the soil organic carbon pool contains up to 2,400 gigatons (or billion metric tons) of carbon, which is more than double that of the atmospheric carbon pool.

In undisturbed natural ecosystems, carbon may be stored in the soil for thousands of years. However, the conversion of natural land into agricultural land from human activities has depleted soil organic carbon stocks by reducing the amount of plant tissues in soil and encouraging erosion, thereby destroying soil structure and speeding up microbial breakdown. It is estimated that over the last 15,000 years, and particularly in the last 200 years, the growth of farmland has released 133 gigatons of carbon from the top two metres of the soil layer. This is equivalent to about 80 years’ worth of present-day US emissions.

This deficit of soil organic carbon has created an opportunity to draw earth-warming carbon dioxide from the atmosphere and store it in the soil in an effort to mitigate against climate change.

Grazing systems and soil organic carbon

Grasslands are a significant reservoir of soil carbon, storing around one-third of the global soil organic carbon pool.1This definition of grasslands includes some savannas, woodlands, shrublands and tundra. However, estimates suggest that livestock grazing is responsible for the loss of 46 gigatons of soil carbon over the past six decades – which is more than four years’ worth of current global fossil fuel emissions.

While moderate to heavy livestock grazing depletes the soil organic carbon pool on average, light grazing has been found to increase soil organic carbon stocks. This is because grazing can stimulate plant productivity and the allocation of carbon to the roots for microbes, thereby increasing carbon sequestration.2Some studies show that grazing-induced changes in vegetation are not correlated with changes in soil organic carbon. As a consequence, ‘regenerative grazing’ – which involves rotating livestock on land for short durations to allow soil to recover and draw carbon dioxide from the atmosphere – has been proposed as a solution for improving soil carbon stocks and mitigating the climate change impacts of livestock grazing. Currently, global grazing systems emit more greenhouse gases than they sequester.

A 2021 analysis found that ‘adaptive multi-paddock grazing’ – a form of regenerative grazing – increased soil carbon stocks compared to conventional grazing. The authors emphasised the importance of carbon being stored in the mineral fraction of the soil – meaning it is tightly bound to soil particles. This makes the sequestered carbon more resistant to disturbance and means it will be stored for a longer duration. The study is backed by a global meta-analysis, which found that regenerative practices, particularly integrated crop-livestock systems, have significant potential to increase soil organic carbon pools because they enhance the storage of carbon in the mineral soil fraction.

Another study reported that over a four-year period, the emissions from adaptive multi-paddock grazing on a beef farm could be completely offset by the carbon sequestered in the soil. Some advocates of regenerative grazing have gone as far as claiming it can ‘reverse climate change’. They argue that increasing livestock production could help sequester more carbon from the atmosphere into the soil.3This is in contrast to experts who believe that managing livestock numbers will be essential, together with other strategies, for reaching Paris Agreement commitments.

A long-term field experiment found that rotational grazing accumulated more soil organic carbon than other management systems. However, the findings have been questioned by other scientists, who point out that the analysis did not consider the contribution of methane and nitrous oxide – two significant greenhouse gases associated with livestock farming – and the method for measuring the permanence of soil carbon was unsuitable. According to these scientists, “grazing cattle, well-managed or not, has no role in enhanced C sequestration.”

How much carbon could these strategies sequester?

An analysis published this year estimates that improved grazing management could take-up around 63 gigatons of carbon in vegetation and soils globally. This number is three times higher than IPCC estimates, which the authors attribute to the overly simplistic model used by the IPCC. To put the number into perspective, 63 gigatons is about six years’ worth of emissions from fossil fuels globally.

A separate analysis published in 2022 suggests that 148 to 699 megatons (or million metric tons) of carbon dioxide equivalent could be sequestered in the soil globally every year through improved grazing management.4Other estimates suggest that improved grazing management could sequester 0.28 megatons of carbon per hectare per year.

Sequestration potential overstated

Some scientists are more cautious and suggest that the potential for soil carbon sequestration under regenerative agriculture to offset emissions may be greatly overestimated. There are several reasons why relying on soil carbon sequestration to offset emissions from livestock systems is risky.

1. The capacity for soil to store carbon is finite

In long-term undisturbed ecosystems, soil carbon stocks are assumed to be equal to soil carbon emissions because the system has reached a state of equilibrium, or a steady state. When the ecosystem is disturbed – such as a grassland being overstocked with cattle – carbon is released from the soil due to, for example, erosion from reduced vegetation cover. Once a new land management practice aimed at enhancing soil carbon sequestration – such as rotational grazing – is introduced on this disturbed land, the rate of soil carbon sequestration follows a sigmoid curve, being high during the initial period after adoption of the practice and then slowing down upon approaching a new soil carbon steady state (Figure 1).

Figure 1. Soil carbon sequestration after a new management practice is introduced
Note: Figure has been adapted from Considering the influence of sequestration duration and carbon saturation on estimates of soil carbon capacity, 2006. The graph is theoretical and the axes are not true to scale.

The new steady state reflects a balance between carbon inputs and outputs under the new management practice, with soil carbon stocks no longer increasing. For grassland management, estimates suggest that the time until the maximum sequestration is reached is, on average, around five years, with declining rates for another 45 years. In other words, the rate of carbon sequestered within the first several years of a new practice being introduced does not reflect the long-term total sequestration rate.

Initial soil carbon sequestration rates from short-term studies on regenerative grazing should therefore not be extrapolated to estimate the total soil carbon sequestration potential of the practice. In some cases, the carbon sequestration potential can be improved beyond the new steady state with the addition of inputs, such as manure.5Importantly, inputs such as manure can also increase the emissions of other greenhouse gases, offsetting soil carbon sequestration gains. Soil carbon saturation then occurs when further inputs no longer lead to increased carbon stores, representing a cap on the carbon storage capacity.6Estimates suggest that saturation is reached at 82 g C kg-1 silt+clay for 2:1 clay dominated soils and 46 g C kg-1 silt+clay for 1:1 clay dominated soils.

2. Soil carbon storage is reversible

For the sequestered carbon to remain in the soil, and for the rate of sequestration to reach its full potential, the new practice needs to be implemented permanently. However, disturbances such as fires or floods – which can be difficult to predict and control – could reverse the practice and cause the release of stored carbon. Climate change is contributing to this reversibility, causing the release of decades-old soil organic carbon by thawing permafrost and accelerating microbial decomposition. This creates a positive feedback loop that further accelerates global warming. As soil organic carbon is sensitive to temperature changes, it is estimated that the potential storage capacity could decrease by 14% by 2040 under a moderate global warming pathway.7The SSP3−7.0 pathway from CMIP6.

3. Warming potential of other greenhouse gases

Land management changes that enhance soil carbon sequestration may increase the emissions of other, more potent, greenhouse gases. In certain cases, even small increases in these other gases may offset the benefit from the change in soil carbon stocks offered by the practice. Ruminant (cows, buffaloes, sheep and goats) farming emits nitrous oxide (from manure), which has a global warming potential 265 times that of carbon dioxide, and methane (from belching animals), which has a warming potential 28 times that of carbon dioxide. They are both also shorter-lived gases than carbon dioxide and have a stronger initial warming effect. Estimates suggest that ruminants emit 110 megatons of methane and 2.4 megatons of nitrous oxide every year, in addition to carbon dioxide.8The ratio of emitted methane: carbon dioxide in ruminants is 4:1. Studies claiming regenerative grazing systems have a net benefit have been criticised for failing to consider the warming contributions of these gases.

A 2023 study estimated the potential for ruminant emissions to be offset through soil carbon sequestration in grasslands, considering the different warming potentials and lifespans of these greenhouse gases. The analysis suggests that around 135 gigatonnes of carbon would need to be sequestered in order to offset global methane and nitrous oxide emissions from ruminant farming – more than double the carbon sequestration potential of improved grazing management. For some grasslands, the soil carbon stock would need to increase by up to 2,000%, which emphasises how infeasible grassland management might be for offsetting ruminant emissions once the warming from other gases is considered.

4. Context is important

Though moderate to heavy grazing consistently reduces soil carbon stocks on average on a global scale, the impacts are highly context-dependent and will vary depending on a number of factors such as the climate conditions, type of soil, type of grazer, the vegetation type and the grazing strategy used. For example, sheep have a greater negative impact on soil carbon sequestration than cattle; the impacts of a higher grazing intensity will be more severe in warmer climates but less severe when water availability is high; and certain types of grasses will improve carbon sequestration, even under heavy grazing.

Due to this wide variability, some scientists argue that it is difficult to anticipate the soil sequestration potential of regenerative grazing practices. There are also concerns that farmers’ skills and motivation levels could limit the outcomes and scalability of practices. Difficulties in measuring the results also makes monitoring soil carbon stocks challenging – it typically takes a decade of monitoring to determine how much carbon a practice is sequestering.

Soil carbon markets

Through soil carbon markets or ‘carbon farming’, farmers implement a management practice that allows them to sell ‘carbon credits’. The credits, a quantifiable amount of carbon dioxide that has been sequestered in the soil from the management practice, are being proposed as a solution to mitigate climate change, with millions of dollars’ worth of credits already sold. However, the uncertainties around the permanence, monitoring and accounting of soil carbon make soil carbon certificates unsuitable for climate change mitigation.9While permanence is a necessary condition for creditable carbon offsets – which are typically issued over a 100-year period – this permanence refers to the duration for which the sequestration practice is carried out rather than the stored soil carbon. Therefore, when the practice ends and the carbon is lost to the atmosphere, it is no longer a permanent removal. As emphasised by a prominent soil scientist, “It’s really hard to evaluate the actual greenhouse gas benefit of these programs”.

Sequestration offers important benefits

Despite several limitations, sequestering carbon in soil could make a meaningful contribution to climate change mitigation in the medium term in certain regions of the world, depending on the management strategy that is used. For example, converting arable land to grassland or forest will almost always have a positive effect on soil carbon sequestration. In addition, many management strategies are well-established and are not reliant on the development of new technologies, meaning they can be implemented quickly and with relative ease.

Additionally, management practices aimed at maintaining or improving soil carbon typically offer multiple other benefits, such as improved soil health, erosion control, increased water availability and reduced emissions intensity, with positive outcomes for yields and farmers’ incomes.

A closer look at CCS: Problems and potential

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Key points:

  • Although carbon capture and storage (CCS) has potential to reduce emissions from sectors that are difficult to decarbonise, almost all of the world’s 41 operational CCS projects are connected to the production or use of oil and gas.
  • 82.5% of existing CCS capacity uses captured CO2 in enhanced oil recovery (EOR), a process to extract less accessible oil from mature wells.
  • The International Energy Agency (IEA) notes in its latest Net Zero roadmap that CCS has a history of slow deployment and “unmet expectations”, and that “removing carbon from the atmosphere is costly and uncertain”.
  • A number of sectors beyond oil and gas are making some limited progress towards applying CCS technologies, led by power generation and chemicals production.

What is CCS?

Carbon capture refers to technologies that remove CO2 from the air and then transport it to be stored or used in other industrial processes.

Carbon capture is best viewed as an integrated infrastructure, which broadly consists of four components:

  • Capture: Technologies that remove CO2 from the atmosphere, either before or after burning.
  • Transportation: Moving captured CO2 by pipeline or ship to a new location for storage or use.
  • Use: CO2 can then be employed within a new industrial process, or
  • Storage: CO2 can be stored more permanently, typically underground in geological storage sites, such as deep saline formations – essentially underground rock formations – or in depleted oil and gas wells.
Fig. 1: Components of CCS infrastructure
Source: IEA 2023; The CCUS chain, Licence: CC BY 4.0

Different configurations of these components, with different applications, are referred to by specific acronyms:

  • Carbon capture and storage (CCS): A system where the CO2 is removed from the atmosphere and put permanently underground.
  • Carbon capture and utilisation (CCU): Captured CO2 is used, either as CO2 or as its component parts, to produce chemicals or building materials.
  • Carbon capture, usage and storage (CCUS): A system in which the use of captured CO2 also results in its storage. The main application of CCUS to date has been to maximise oil production.

For simplicity, this briefing will use CCS to refer to all three of these approaches, which collectively refer to the capture of emissions at source, rather than its application for carbon dioxide removal (CDR).1There are also technologies that directly extract CO2 from the atmosphere, known as carbon dioxide removal (CDR). These include direct air capture (DAC) and Bioenergy with CCS (BECCS).

History of CCS in the oil & gas sector

CCS technology was developed by the oil and gas industry in the 1970s to extend the life of oil fields. Carbon dioxide is the key component of enhanced oil recovery (EOR), a process used to access the hard-to-reach oil in older wells. When CO2 is injected into the reservoir, it mixes with any oil remaining in the subsurface rock. This displaces residual droplets of crude oil, which are then pushed towards the oil well and pumped to the surface.

Some sections of the oil and gas industry depend on a constant flow of CO2 for use in EOR activities. However, EOR can be an expensive process to establish and maintain. It is capital-intensive to build CO2 transportation infrastructure, drill into a well that is already in operation, and ensure all injected CO2 is completely used up. According to the United States Department of Energy, the cost of CO2 is often the “single largest project cost” in EOR, meaning that “operators strive to optimize and reduce the cost of its purchase and injection wherever possible”.

Box 1: US subsidies for CCS prioritise increased oil & gas production

High set up and running costs mean proposed CCS projects have historically often relied on government support to strengthen the business case for moving forward.2This study was funded by Chevron. Between 1972 and 2014, almost every CCS project in the world was located in the United States and directed at EOR. Since then, more CCS projects have become operational in Canada, Asia and the Middle East. State incentives were a key factor underpinning these projects. Starting in 1979, and codified in the 1986 US Federal EOR Tax Incentive, a 15% tax credit was applied to costs associated with CO2 capture and injection, effectively subsidising hydrocarbons exploitation.

In more recent years, these subsidies have been re-labelled as ‘climate action’, despite being a continuation of subsidies designed to maximise oil extraction. In 2008, Congress added Section 45Q to the Internal Revenue Code, which provided tax credits if captured carbon was injected as part of oil and gas extraction. The Inflation Reduction Act, approved in 2022, updated Section 45Q – the Credit for Carbon Oxide Sequestration – to provide a base credit of USD 12 for every metric ton of carbon dioxide that is injected for EOR. This can reach up to USD 60 if the CO2 is captured from an industrial facility and USD 130 if the CO2 is from DAC.

The motivations to initiate these subsidies in the 1970s and continue them in the 2020s are broadly the same: to increase domestic oil production to reduce reliance on imports, seeking to stabilise gasoline prices. Backing EOR has been presented as a way to reduce emissions and increase energy security by retrieving significant amounts of oil left in conventional reservoirs in mature oil fields.

Current state: Capturing carbon for EOR

Currently, the majority of operational CCS projects are related to producing oil or gas.3One of the only projects in operation that does not appear to have direct links to fossil fuels is the Orca DAC project in Iceland, with capacity to capture just 0.004 million tonnes of carbon per year. For perspective, the Yanchang Demonstration project in China, has a capacity to capture 0.05 million tonnes per year, which is then used in EOR. Industry body Global CCS Institute, which is closely linked to the hydrocarbons industry, reports 41 active CCS projects worldwide (Figure 2).4See full list of current CCS projects based on information provided by the Global CCS Institute. Within these projects:

  • 53% of overall capacity is used in natural gas processing, removing high CO2 content which would render the gas unsaleable for distribution through pipelines and unusable as liquified natural gas (LNG).
  • 82.5% of captured carbon is used to produce oil through EOR.

Although these processes both involve carbon capture technology, the gas or oil being produced will release CO2 emissions when it is used further down the line. These indirect emissions are known as Scope 3 emissions and make up 85% of the fossil fuel industry’s carbon footprint. This limits the overall value of CCS in terms of preventing emissions and marks a difference between how CCS is currently being used and its potential future uses focused on reducing emissions in other hard-to-abate sectors.

Figure 2: Operational CO2 capture & use capacity by activity (Mtpa)
Reframing CCS: Storing carbon to maintain oil & gas extraction

As awareness of climate change has increased, CCS has been increasingly presented as a way to store CO2 so that it is not released into the atmosphere, thereby ‘abating’, or reducing, emissions. CCS is now at the centre of the oil and gas industry’s pledges to decarbonise. Some in the oil industry have gone so far as to claim that capturing CO2 can result in “carbon neutral” oil. However, capturing emissions from fossil fuels continues to be a hugely controversial area in debates on how to tackle climate change. In deploying carbon storage to defend or enhance the profitability of natural gas processing and oil refining, the technology ensures the continuation of oil and gas extraction (see Box 2).

Box 2: Fossil fuel operations storing carbon so that extraction can continue

Sleipner, Norway

Equinor (previously Statoil) began the Sleipner CCS project in the North Sea to reduce the amount of tax it paid: “The reason for the decision was the carbon dioxide emission fee introduced by Norwegian authorities in 1993, which made it more profitable to capture and store the carbon dioxide than to pay the emission fee.”

The CCS project has saved the company millions of dollars in taxes, contributing to making extraction from the Sleipner West field financially viable. Since operations in the block began in 1996, almost all of the recoverable gas and reserves have been extracted (remaining gas reserves are just 8 million cubic metres oil equivalent, compared to the original amount of 154.1 million cubic metres).

Quest, Canada

Shell’s Quest CCS project began capturing CO2 from hydrogen manufacturing at the Scotford Upgrader processing facility in Alberta, Canada in 2015. The hydrogen is used to refine bitumen (thick, sticky black oil) from the tar sands to make synthetic crude oil.

Company statements reflect the financial incentive of CCS: “In North America, the adoption of CCS is stimulated by tax credits and the prospect of carbon taxes increasing significantly in decades to come.”

Shell refers to Quest as a key component of its abatement strategy to meet legal requirements to reduce its emissions intensity. As well as reducing company expenditure on the purchase of carbon offsets or energy-efficiency measures, the project generates increasing revenues through government funding and the sale of carbon credits.

This has contributed to the profitability and continuation of operations at the Scotford Upgrader which, in the past few years, increased its production capacity from 300,000 to 320,000 barrels per day of oil equivalent. Shell is considering building a second CCS project at the site.

Gorgon, Australia

The Gorgon gas field in Western Australia was discovered in 1980 and began exporting liquified natural gas (LNG) to Asia in 2016. The government licence for the project required the operators – Chevron and its partners, including ExxonMobil and Shell – to install a CCS project at the site and formed part of the final investment decision in 2009.

The Australian government provided AUD 60 million and agreed to take on liability for the stored CO2. The project has not captured sufficient CO2 since it began in 2019, leading operators to purchase 5.23 million carbon credits to offset non-captured emissions. Despite this poor track record of CO2 capture, net production of natural gas at the Gorgon processing facility has increased from 1,000 million cubic feet per day in 2020 to 1,336 million cubic feet in 2022.

Looking forward: Limits to CCS’s usefulness in oil & gas

The oil and gas industry continues to be a key developer of CCS technologies. Shell plans to build a second CCS project at Quest in Canada (see Box 2), and the Abu Dhabi National Oil Company (ADNOC) has announced a new large-scale CCS project for EOR at one of its gas-processing plants.

The known current and future plans for applying CCS in the oil and gas industry are primarily to support continued oil and gas extraction. However, if fossil fuels are increasingly replaced with renewable energies, there will be less need to capture emissions from the burning of oil, gas and coal at source.

In its latest Net Zero scenario from 2023, the IEA forecasts a reduced contribution of fossil fuels with CCUS citing the “slow pace of current progress on the development of CCUS” as one reason for the decline. The agency further notes that “reduced CCUS deployment is compensated by more renewables and electrification”.

Potential for applying CCS in other sectors

In recent years, CCS has shifted from being primarily a technology developed and used by the oil and gas industries to become part of the mainstream climate debate. One of the areas in which CCS could potentially have some impact is heavy industry. Sectors such as steel, cement and chemicals are often seen as difficult to decarbonise because they are energy-intensive, and there can be process emissions that are the result of chemical or physical reactions.

According to the IEA’s CCUS projects database, the areas expected to see the largest growth in CCS initiatives are ammonia production, power and heat, and biofuels.5Production of ammonia, which is an input for fertilisers, uses hydrogen; CO2 can be captured when the hydrogen is produced. A number of CCS projects are planned or being built across a range of sectors beyond oil and gas (Figure 3, and discussed sector-by-sector below). Several of these projects aim to capture CO2 for use in EOR.

Figure 3: Operational & planned carbon capture by sector, 2022 & 2030
Challenges: Efficacy and cost-effectiveness

In 2022, the IPCC considered the use of CCS across a range of sectors as part of its sixth assessment cycle, citing its abatement potential. However, the IPCC notes that “in contrast to the oil and gas sector, CCS is less mature in the power sector, as well as in cement and chemicals production, where it is a critical mitigation option”

It is unclear to what extent CCS will be a viable and effective technology for use in these sectors. Existing CCS projects have an uneven track record of CO2 capture rates. For example:

  • Boundary Dam, a coal power plant in Washington state, USA, has an estimated 65% capture rate (used for EOR).
  • Gorgon gas processing facility on Barrow Island, Australia, has an estimated 45% capture rate.
  • Quest oil refinery, in Alberta, Canada, has an estimated capture rate of 48%.
  • Century Gas Processing Plant in Texas, USA, has an estimated capture rate of under 10% (used for EOR).

The IPCC also finds that in terms of the measures that will do the most to reduce industrial emissions – and do so cheaply – CCS is less effective than actions such as fuel switching (electrification), improving energy efficiency, material efficiency and enhanced recycling (Figure 4).6Although electrification is currently a more viable option in light industry (for example, using electrothermal heating and heat pumps), the IPCC finds that “both light and heavy industry are potentially large and flexible users of electricity” (box TS.9, page 92) The IPCC analysis reflects net lifetime costs of avoided greenhouse gas emissions for each action or technology, broken down by cost categories, across the mitigation potential, and net greenhouse gas emission reductions that can be achieved by each option.

Figure 4: Technologies’ potential contribution to net emissions reduction in the industrial sector and projected costs in 2030

The inefficiency of CCS relative to its decarbonisation impact, in comparison to other options, is due to the high cost of project implementation. This reality led the IEA to observe in its latest net zero roadmap that “removing carbon from the atmosphere is costly and uncertain”. The report goes on to say that “so far, the history of CCUS has largely been one of unmet expectations. Progress has been slow and deployment relatively flat for years. This lack of progress has led to progressive downward revisions in the role of CCUS in climate mitigation scenarios,” including the IEA’s own Net Zero Emissions by 2050 Scenario, published in 2023.

Alongside low and inconsistent capture rates, CO2 storage presents another issue. The IPCC notes that “the regional availability of geological storage could be a limiting factor” to the use of CCS. This is a reality in many areas, including Europe. In its proposal for a Net Zero Industry Act of 2023, the European Commission identified that the “emergence of a CCS value chain in the EU is currently being hampered by a lack of CO2 storage sites”.

CCS uptake and potential by sector
Steel
  • Current use of CCS: One project in operation in the UAE
  • Future use of CCS: Unclear

Steel production is currently largely reliant on coal, both as a component of the production process and as a fuel to provide high-temperature heat. According to the IEA, the sector is responsible for around 7% of energy-related CO2 emissions. The IPCC finds that emissions from steel can be reduced through material efficiency, high-quality recycling and partial fuel switching, followed by using hydrogen or CCS to capture residual emissions.

The Al Reyadah CCS project in the UAE captures CO2 from Emirates Steel Arkan’s steel mill for use in local oil fields, where it is used for EOR. The project, commissioned in 2016, was reported to cost USD 122 million to set up, and aims to capture 0.8 million tonnes of CO2 (Mt CO2) per year, according to company statements. However, little is known about its effectiveness.

Cement
  • Current use of CCS: No projects in operation
  • Future use of CCS: One project under construction in Norway

CCS could be one way to decarbonise the cement sector, which is a major emitter, contributing between 7% and 8% of global emissions. These emissions come both from the fossil fuels used to generate the heat needed to make cement, but also from the chemical composition of the raw materials used.7Cement is made through a calcination process, during which CO2 is burned off limestone and released into the atmosphere, if it is not captured.

The IPCC finds cement production can be decarbonised through material efficiency (for example, using right-sized prefabricated components to reduce material waste) and introducing substitutes such as ground limestone. It concludes that, “CCS will be essential for eliminating the limestone calcination process emissions for making clinker, which currently represent 60% of GHG emissions in best-available technology plants”.

The Brevik CCS project in Norway, which is due to come on-line in 2024, aims to capture 400,000 tonnes of CO2 a year, transport this by ship, and store it in the sea bed.

Chemicals
  • Current use of CCS: Six projects in operation in China
  • Future use of CCS: One project under construction in the Netherlands and two in the United States

The chemicals industry is responsible for about 5% of global CO2 emissions. Some segments already capture CO2 from production processes, particularly those that release a relatively pure stream of CO2, such as ammonia, an input for fertilisers. According to the IPCC, chemical emissions can be reduced through increasing plastic recycling, fuel and feedstock switching, and “depending on availability” by using CCS technologies, including utilisation and removal.

Current CCS projects in the chemical industry are concentrated in China where collectively they have the capacity to capture 1.75 million tonnes of CO2 a year. These projects became operational between 2012 and 2022 and almost all of them capture CO2 which is then used in EOR. For example, Sinopec uses CO2 captured at Qilu Petrochemical for EOR at Shengli Oilfield, “thus turning waste into something valuable”, according to the company website.

Two CCS projects are under construction in the United States to capture CO2 from hydrogen produced from natural gas to make ammonia.

Power generation
  • Current use of CCS: Two coal power plants capturing CO2 for use in EOR, in Canada and the United States
  • Future use of CCS: Five projects are under construction in Australia, China, the Netherlands and Norway

The power sector is the biggest source of CO2 emissions globally. When a power station burns fossil fuels, CCS can be used to lessen the quantity of emissions released. However, CCS requires additional energy above and beyond the needs of the power plant. This is known as the energy penalty, and makes a CCS-equipped facility more expensive to operate.

CCS projects in the power sector to date have been associated with EOR activities at nearby oil fields, a practice which has served to offset the costs of CCS with the profits from EOR. This is the case with the Boundary Dam project in Saskatchewan, Canada, which has been operating since 2014, and the Petra Nova project in Houston, USA, operational since 2017.

However, this arrangement is contingent on oil prices being high enough to cover the costs of operating the CCS infrastructure. In 2020, the Petra Nova project was temporarily halted when oil prices crashed during the COVID-19 pandemic. A rise in oil prices in autumn 2023 has made the project financially viable once more and work has restarted.

Though CO2 capture rates at Petra Nova fell short of expectations, at 3.8 million tonnes in its first three years of operations against a targeted 4.6 million tonnes, the company running the project estimates the captured CO2 contributed to increasing oil production at the West Ranch oil field from 300 barrels per day to over 4,000.

This price differential of CCS-equipped coal plants is likely to be further exacerbated by the cost decline in renewables. In 2022, IPCC found that costs of solar and wind energy, and batteries have fallen by around 85% since 2010. With renewables expected to increase their share of electricity generation, it is unclear to what extent CCS would be needed in coal and gas power plants in the future

Hydrogen production
  • Current use of CCS: One project in Canada, capturing CO2 from hydrogen for use in EOR
  • Future use of CCS: One project under construction in Canada

CO2 is produced as a by-product when hydrogen is made using natural gas or coal, known as ‘blue hydrogen’. This hydrogen can then be used as a replacement for natural gas in some applications. However, blue hydrogen can have a greater impact on the climate than burning natural gas outright due to methane leaks in the supply chain. Blue hydrogen is also likely to face increasing competition from ‘green hydrogen’, which is made with renewable electricity, given the volatility of gas prices and residual emissions across its lifecycle production.

In Canada, the Quest CCS project captures CO2 from the hydrogen produced to refine Canada’s tar sands at the Scotford Upgrader in Alberta. Another hydrogen CCS facility in Alberta is under development and has received around USD 350 million in support from the Canadian government.

How to spot greenwashing in a sustainability report: A guide to spotting false environmental claims

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Key points:

This guide shows how to unpick a sustainability report and spot greenwashing in 11 areas. Each section explains a type of greenwashing that could be discovered in a sustainability report. This guide is intended for journalists, professionals working in climate and climate activists. At the end of each section, questions help to guide your judgement on a company’s greenwashing practices. If the answer to the majority of green questions 🟢 is no and the answer to most of the red questions 🔴 is yes, then a company may be greenwashing.

What is greenwashing?

Greenwashing is when companies portray themselves as sustainable or environmentally friendly despite their products or concrete actions not matching their claims. Greenwashing can take various forms, such as false advertising, misleading labelling or exaggerated environmental benefits or actions. It involves using corporate communications and marketing strategies to mislead consumers.1For more information, read Stop Funding Heat’s report on greenwashing in the fossil fuel industry.

Greenwashing is harmful to the environment, society and the company: Consumers feel discouraged from taking action, policymakers get the wrong signals about progress and investments decrease due to shareholder mistrust. It can also undermine other companies’ genuine action on climate, as greenwashing makes their progress look less ambitious.

Greenwashing is part of a broader concept called climate disinformation or misinformation. According to the global coalition Climate Action Against Disinformation, one aspect of climate disinformation is that it “falsely publicises efforts as supportive of climate goals that in fact contribute to climate warming or contravene the scientific consensus on mitigation or adaptation.”

What does the UN say about greenwashing?

The United Nations has warned that greenwashing is a major obstacle to tackling climate change. In 2022, a UN high-level expert group published a report named ‘Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities and Regions’. The report outlines 10 recommendations as “a roadmap to prevent net zero from being undermined by false claims, ambiguity and ‘greenwash’”. They include how to announce and set a net zero pledge, what role voluntary carbon offsets should play, and the importance of phasing out fossil fuels. Catherine McKenna, chair of the group, said: “We urgently need every business, (…) to walk the talk on their net-zero promises. We cannot afford slow movers, fake movers or any form of greenwashing.” The UN report and recommendations form the basis of this guide.

Where is the company positioned in rankings or reports?

Rankings can provide an understanding of whether and how a company is greenwashing. Rankings either aggregate different metrics to give an overall company score or focus on one aspect (such as deforestation). Screening rankings for your company of choice is the first step to understanding what the company’s problems are. Here is a non-exhaustive list of company rankings2https://greenwash.com/:

Is the company ranked poorly in terms of sustainability claims?

When and where to find sustainability reports

Companies publish annual reports and sustainability reports. Annual reports must be published by listed corporations every year to show shareholders how their operations and financial situations are evolving. Sustainability or Environment, Social and Governance (ESG) reports are optional in most jurisdictions. The US and the EU will soon require companies to publish some climate and sustainability information.

For publicly listed companies, annual reports are usually published in the so-called “proxy season” between mid-April and mid-June, when annual shareholder meetings are held. When a sustainability report is published usually depends on the schedule of the annual report and on the initiatives in which the company is engaged. Global disclosure system CDP, for instance, releases some of its results in Q4. Sustainability reports are usually found on a company’s website under a “sustainability”, “ESG” or “climate” tab. Rather than just reading examples of a company’s sustainability measures, it is important to look for greenhouse gas emissions data, usually under “climate”.

1. Scope 1, 2 and 3 emissions

Sustainability reports are often designed to demonstrate the company’s positive environmental impact. However, those impacts have to be corroborated with emissions data. This data can be found in the appendix as an emissions table or by using Ctrl+F and typing “scope”. Three categories of emissions are typically used to measure a company’s overall emissions. The distinction is not based on a scientific definition but was established by the industry-led GHG Protocol.

  • Scope 1 emissions, often referred to as “direct emissions”, are all emissions that arise directly from the production process, e.g. from fuel combustion in furnaces.
  • Scope 2 emissions come from purchased energy, such as electricity, heating and cooling (often referred to as “indirect, from electricity purchased and consumed”).
  • Scope 3 emissions are all other indirect emissions not included in Scope 2. Companies often call them “emissions from manufacturing sites”. Scope 3 emissions can represent 90% of a company’s total emissions. They are emissions generated both upstream and downstream:
  1. Upstream emissions are created in the supply chain during production. For example, the emissions of a motorbike producer would include those emitted during the production of wheels bought from a third party. Business flights and employee commuting also belong here.
  2. Downstream emissions are created from the use of a product and can include waste disposal, the energy used to maintain a product, and distribution to shops.

Companies usually report scope 1 and 2 emissions and sometimes scope 3 emissions, though often this is incomplete. Frequently, companies highlight the reductions achieved in the first two scope categories, as those usually represent a smaller portion of total emissions and their reduction is easier to achieve compared to scope 3.

A table with total emissions, often available in the appendix of a sustainability report, will give a more accurate view of a company’s emissions. Alternatively, former sustainability reports can be used to add up the emissions from each year to see if the total emissions have increased or decreased. There are usually two ways of accounting – market-based vs. location-based – and it is important that one method is used consistently.

Box 1: Market-based vs. location-based emissions accounting

For scope 2 emissions, most companies must provide emissions data based on both market-based and location-based calculations.

Market-based emissions are calculated from the company’s local power grid. The company may purchase certificates stating that its energy comes from a renewable source and then claim that it emits zero emissions. Scientists have criticised this method as evidence shows these purchases do not encourage more renewable energy investment. It also distorts the perception of real emissions mitigation measures taken by committed companies. A recent trend involves companies highlighting only ‘market-based’ data, resulting in a rosier picture for their emissions – but arguably a less honest one. One recent study published by Nature highlighted that “if this trend continues, 42% of committed scope 2 emission reductions will not result in real-world mitigation”.

Location-based emissions are calculated from contracts with the company’s electric utilities. Usually, the company provides the emissions average for the regional grid on which it is located.

The measure used for emissions is called CO2e, which takes all emissions that are produced as equivalent to carbon dioxide (CO2) so that it is possible to compare the quantities. If there is no “e” next to the CO2, a company is failing to account for methane and other greenhouse gases.

Are the company’s total emissions from scope 1, 2 and 3 increasing?
Does the company omit to report on CO2e or other greenhouse gas emissions by only reporting on CO2 emissions?
Box 2: The devil’s in the details: Find the small print

Headlines in a sustainability report are the big achievements the company wants the reader to focus on. The aspects of which they are less proud are often in the footnotes. That is where indicators of greenwashing might be found. The smaller the font, the more important it is to read. Moreover, as a guide by the journalism platform Clean Energy Wire outlines: “Sometimes when a company says their disclosure includes “all xyz”, consider what is excluded from XYZ rather than interpreting this at face value as a confirmation of comprehensiveness.” This is typically the case when a company describes what it has included in its scope 3 emissions.

2. Omitting parts of scope 3

There are 15 different categories of scope 3 emissions – indirect emissions emerging from a company’s value chain – which typically represent 90% of total emissions. The numbers relating to scope 3 emissions are important: while a company may not solely be responsible for these emissions, it can alter the products it offers, choose less polluting providers or collaborate with suppliers to reduce their emissions. For some companies (e.g. coal, oil and gas companies), Scope 3 emissions are predominantly from the use of their product and are relatively straightforward to measure. However, while pressure to report scope 3 emissions has increased, companies have not always responded in good faith.

A company will usually specify which scope 3 categories are included in its sustainability report. This is an opportunity to see if any categories are excluded. The 15 categories are:

  1. Purchased goods and services
  2. Capital goods
  3. Fuel- and energy-related activities not included in scope 1 or scope 2
  4. Upstream transportation and distribution
  5. Waste generated in operations
  6. Business travel
  7. Employee commuting
  8. Upstream leased assets
  9. Downstream transportation and distribution
  10. Processing of sold products
  11. Use of sold products
  12. End-of-life treatment of sold products
  13. Downstream leased assets
  14. Franchises
  15. Investments

As scope 3 emissions are diverse and harder to measure, the UN Integrity Matters report states: “Where data is missing for scope 3 emissions, businesses should explain how they are working on getting the data or what estimates they are using.” Figure 1 shows the sectors with a large share of scope 3 emissions among their overall emissions.

Fig. 1: Share of scope 3 emissions by sector
Source: WRI, CDP and Concordia University, Trends Show Companies Are Ready for Scope 3 Reporting with US Climate Disclosure Rule, 2022.
Does the company leave out several categories of scope 3 emissions without further explanation?
When scope 3 emissions are incomplete, does the company fail to explain how it will measure scope 3 emissions in the future?

3. Net-zero and interim targets

Corporate net-zero commitments continue to gain momentum. More than 4,000 companies, representing over a third of the global economy’s market capitalisation, had set net-zero targets by the end of 2022. The significance of a net-zero target for a company lies in its potential to reduce emissions and address climate change. Setting a net-zero target also offers a company the opportunity for transformational change. However, not every company will publish information on its environmental or climate performance, and many companies are reluctant to make their commitments public out of fear of being criticised by civil society. This omission of information on climate efforts is also a form of greenwashing, known as greenhushing.

The UN Integrity Matters report states: “Targets must account for all greenhouse gas emissions (based on internationally approved measures of warming effects) and include separate targets for material non-CO2 greenhouse gas emissions (e.g. fossil methane and biogenic methane).” For instance, if a company operates in one of the sectors listed below (Figure 2), it should have a methane target, as it most likely has high methane emissions.

Fig. 2: Methane emissions by sector in 2021, in million tonnes
Source: IEA, Sources of methane emissions, 2021.

Companies must achieve net-zero before 2050 to reach the Paris Agreement goal of limiting warming to 1.5°C. Interim targets are crucial as they serve as tangible commitments for early action and they can ensure companies stay on track by providing a transparent roadmap with checkpoints. By setting interim targets, companies can also measure their progress and improve or adjust their behaviour to achieve long-term goals.

The three types of interim targets to look out for are:

  1. Short-term targets: Rapid and significant reductions in value chain direct and indirect emissions are essential to limit global temperature rise to 1.5°C. Companies must prioritise halving emissions by 2030.
  2. Medium-term targets: Company emissions reductions are set between 2026 and 2035 for a clearly defined scope of emissions. This target should cover at least 95% of scope 1 and 2 emissions and, where applicable, the most relevant scope 3 emissions.
  3. Long-term targets: Companies set a target to achieve net-zero emissions by 2050 or earlier. This target should include at least 95% of scope 1 and 2 emissions as well as scope 3 emissions.
Does the company publish its commitments and targets?
Does the company have interim targets and detailed information on achieving them, including a regular review process?
If the company tends to emit greenhouse gases other than CO2, does it have a separate target, e.g. for methane?

4. Baseline year

When a company promises to reduce its emissions, it needs to decide on a baseline for the reduction. For instance, when a beverage company pledges to reduce its emissions by 10% – lower than what level? If a company chooses to reduce its emissions compared to 2019, when emissions were already very low due to COVID lockdowns, this will have a very different (and more ambitious) outcome than if it chooses 2023 as its baseline, when emissions were high due to the post-pandemic recovery.

The fictional example in Figure 3 shows a company aiming to reduce its emissions by 10% by 2025 using two years of reference. Using 2018 as a baseline, a 10% reduction would mean emitting 18,000 metric tons of CO2e in 2025. Using 2022, it would emit 54,000 metric tons of CO2e. In other words, the fewer emissions in a baseline year, the more is required to reduce emissions, and the more ambitious the target. In this example, using the 2018 baseline is much more ambitious than choosing 2022.

Fig. 3: 10% emissions reduction using two different baseline years, in metric tonnes

Other companies do not pledge to reduce emissions compared to their past emissions but to their future ones. Often, they use a business-as-usual scenario, promising to reduce emissions – e.g. by 10% in 2027 compared to the emissions they would have emitted in 2027 without any climate mitigation measures. These accounting methods are a way of allowing the company to continue emitting more than in previous years.

Does the baseline year have particularly high emissions?
Does the baseline year come from a business-as-usual scenario?

5. Intensity target

The intensity of emissions is the amount of greenhouse gases released every time a company manufactures and sells a product. In short, it is emissions by product. Intensity of emissions is seen as a problematic accounting metric. The UN Integrity Matters report states: “Non-state actors cannot focus on reducing the intensity of their emissions rather than their absolute emissions.”

Imagine a car company pledges to reduce its emissions intensity by 2% each year (green line in Figure 4). However, over the years, the car business has performed well and car production has increased (grey line). The company’s absolute emissions would increase as a result (yellow line). In other words, when a company sells more cars compared to the previous year, its overall emissions increase no matter how low the emissions intensity of car production is.

Fig. 4: Emissions intensity vs absolute emissions

In sustainability reports, intensity targets can be recognised when the company has, for example, a target of “-55% CO2 emissions per product sold”. However, if a company uses an intensity target in addition to an absolute emissions target, overall emissions should be reduced.

Does the company have an intensity target without an absolute emissions target?

6. Renewable energy targets

Energy plays a vital role in a company’s operations, contributing to costs and emissions. Renewable energy targets are becoming increasingly common. A company’s renewable energy target is set in order to achieve a specific amount of renewable energy production or consumption. Typically integrated into a company’s sustainability initiatives, the target actively contributes to reducing its carbon footprint and overall environmental impact.

In practice, companies’ renewable energy targets vary. Some set ambitious goals, aiming for 100% reliance on renewable energy or specific percentage targets, while others opt for partial commitments. Many companies are engaged in renewable energy transition initiatives such as RE100. This global corporate renewable energy initiative brings together numerous large businesses committed to sourcing 100% of their electricity from renewables.

However, there is uncertainty around what exactly is included in the definition of renewable energy. This question is highly contested and debated, including by governments and the EU. Companies must explain what is covered in their renewable energy targets; for instance, is gas, biomass or hydrogen included? Or only wind and solar? The latter are universally accepted as renewable energy, whereas gas, biomass and hydrogen are far more controversial and have not been proven to reduce emissions effectively in their current forms.

Another key issue is whether the renewable energy a company purchases justifies the reporting of lower electricity emissions. A company can only claim zero emissions for its power consumption if it has been the primary cause for that renewable energy to be generated. “Renewable energy certificates” (RECs) are “very unlikely to contribute to additional renewable electricity supply capacity”, according to the New Climate Institute. Comparatively, power purchase agreements (PPAs) are more likely to do so but are still problematic, as the electricity still comes from the grid, where fossil fuels might still dominate. Ideally, a company will always prominently report its location-based ‘unfiltered’ power consumption emissions (see Box 1).

Does the company set clear-cut definitions for “renewable energy” in its targets?
Are the chosen renewable energy sources scientifically proven to reduce emissions effectively, such as wind and solar (vs. gas, biomass and non-green hydrogen)?
Does the company engage independent entities to verify or certify its energy production and consumption?
Does the company offer updates on its progress towards achieving its target?
Does the company provide detailed information on the additionality of its renewables purchases?

7. Carbon offsets

Carbon offsetting refers to the practice of a company compensating for its emissions by investing in projects that aim to reduce or remove an equivalent amount of emissions from the atmosphere. Companies seek to use carbon offsetting to demonstrate their commitment to sustainability and may highlight them in public relations and marketing materials to create a positive image and attract eco-conscious consumers.

However, carbon offsetting has been criticised for creating opportunities for greenwashing. Companies may rely on this short-term tactic instead of sustainably mitigating emissions, for example, by switching to renewable energy. Offsets can result in accounting issues, environmentally damaging activities and social inequities. For instance, carbon offsets in the form of reforestation or afforestation require a lot of land, which is limited. Reforestation and afforestation are also not necessarily a permanent form of removal, as trees can burn or get diseases. A fashion company should not compensate for fossil fuels used in manufacturing with carbon offsets, as electrification of the manufacturing process is already a sustainable alternative.

In addition, the quality and transparency of carbon offsetting programmes vary greatly, leading to concerns about greenwashing and deceptive practices. One investigation found that 90% of offsets sold by the world’s leading certifier do not lead to genuine emissions reductions. The investigation also found human rights issues to be a “serious concern” in at least one of the offsetting projects. In the EU, carbon neutrality claims based on offsets will be banned from 2026 if the Green Claims Directive is approved ahead of EU elections in April.

Companies might refer to carbon offsetting with synonyms, such as:

  • Compensate: A direct synonym for ‘offset’.
  • Neutrality/neutralise: Carbon neutrality means that the amount of CO2 produced during a process equals zero, which companies might seek to achieve using carbon offsets. As a term, “carbon neutral” has been increasingly regulated worldwide.
  • Removal: This refers to offsetting that aims to remove CO2 from the atmosphere permanently.
  • Balancing: A term often used to describe the process of offsetting emissions. A company or organisation is said to be “carbon neutral” when it offsets, or balances, all of its emissions.
  • Insetting: A term used by companies such as Nestlé and Pepsi that usually refers to emissions offsetting in the value chain. This can be a highly untransparent practice and can lead to the double counting of emissions reductions.
Does the company use carbon offsets to compensate a large chunk of its emissions?
Does the company use carbon offsets to compensate emissions for which low-carbon alternatives exist?
Does the company claim to be “carbon neutral”?
After buying offsets, has the company implemented additional changes to sustainably reduce emissions (such as installing solar panels, making processes more energy efficient or electrifying machines)?
Has the company achieved a decrease in emissions due to these long-term, sustainable measures and not only the carbon offsets it purchased?
Does the company explain where by how much and through which method it is offsetting?

8. Hydrogen

Many auto companies are promoting hydrogen as the solution to replace fossil fuels. However, hydrogen production needs a large amount of electricity, and storing it is not easy. In most cases, it is easier to use already available electrification solutions, such as electric vehicles. In addition, for hydrogen to be green, the electricity used to produce it needs to be green too, but the majority of grid-distributed electricity globally is generated from fossil fuels. There are very few sectors in which the use of green hydrogen makes sense today due to the lack of electrified options. Areas of potential application are the production of fertilisers and steel, or powering ships and planes.

Does the company claim to use hydrogen as a mitigation solution in a sector or process where electrification is a better solution (such as automobiles or heating)?

9. CDR and geoengineering

Carbon dioxide removal (CDR) technology is designed to tackle excess CO2 in the atmosphere by capturing and sequestering carbon in various environments, such as the ocean, terrestrial biosphere or geological reservoirs. Geoengineering seeks to restore the balance in the climate system by either removing excess CO2 or reflecting solar radiation away from Earth.

Greenwashing in the fields of CDR and geoengineering can occur in the form of promoting these technologies as quick fixes or sustainable climate change measures to tackle a company’s emissions or environmental impacts. However, they have not been proven to be effective climate change solutions due to high scientific uncertainty and side effects.

Greenwashing could occur when a company commits to implementing these initiatives while actively expanding its carbon-intensive operations. This could include continued reliance on fossil fuels in the supply chain, or continued operations in the fossil fuel sector, while counting on these unproven technologies to deal with the outcomes afterwards.

Does the company rely on underdeveloped CDR to reduce its emissions?
Does the company use CDR to compensate for emissions for which low-carbon alternatives exist?

10. Gas

Some companies claim to be environmentally friendly by switching high-emitting energy operations to ‘green’ sources of power that ultimately turn out to be gas, also known as natural gas or fossil gas. Gas is currently being heavily promoted as a ‘transition fuel’ that can replace coal in the energy transition or help companies meet emissions reduction targets.

However, gas is still a fossil fuel and burning gas produces emissions, primarily CO2 and methane, making it a significant contributor to climate change. Therefore, promoting gas as a clean alternative is a form of greenwashing. It diverts the focus of companies or other entities away from more sustainable and renewable energy sources that are proven to reduce emissions. It is also misleading to the public, who can be led to believe gas is a clean and sustainable energy source when, in fact, it is not as environmentally friendly as renewable energy sources like solar or wind.

Does the company include gas in its emissions reduction strategy and present it as a “cleaner alternative” or “’transition fuel”?
Does the company invest in gas production and related infrastructure?

11. CCS

Carbon capture and storage (CCS) is a technology used to capture CO2 from power plants and various industrial processes, preventing its release into the atmosphere. For example, CO2 is captured at large stationary sources, such as fossil fuel-fired power plants, and injected into the deep subsurface for long-time storage. Only 30 CCS plants are currently operating worldwide. UN secretary-general António Guterres has criticised CCS as greenwashing, since it does not address the root cause of emissions, but allows industries to continue emitting CO2 by burning fossil fuels while claiming to be engaging in climate measures.

Additionally, CCS requires significant energy resources to operate, meaning that using fossil fuels to power it can eliminate the environmental benefits it claims to provide. The effectiveness and safety of CCS has also been questioned, with the leakage of stored emissions potentially having harmful effects on the environment.

Does the company use CCS to compensate for emissions when low-carbon alternatives exist?
Does the company report specific and quantifiable carbon capture and storage metrics, such as the amount of CO2 captured and stored annually, and are these metrics independently verified or audited?
Is the company using CCS in addition to using other measures to substantially and sustainably reduce emissions (such as installing solar panels, making processes more energy efficient or electrifying machines)?

Summary of questions

Is the company ranked poorly in terms of sustainability claims?
Are the company’s total emissions from scope 1, 2 and 3 increasing?
Does the company omit to report on CO2e or other greenhouse gas emissions by only reporting on CO2 emissions?
Does the company leave out several categories of scope 3 emissions without further explanation?
When scope 3 emissions are incomplete, does the company fail to explain how it will measure scope 3 emissions in the future?
Does the company publish its commitments and targets?
Does the company have interim targets and detailed information on achieving them, including a regular review process?
If the company tends to emit greenhouse gases other than CO2, does it have a separate target, e.g. for methane?
Does the baseline year have particularly high emissions?
Does the baseline year come from a business-as-usual scenario?
Does the company have an intensity target without an absolute emissions target?
Does the company set clear-cut definitions for “renewable energy” in its targets?
Are the chosen renewable energy sources scientifically proven to reduce emissions effectively, such as wind and solar (vs. gas, biomass and non-green hydrogen)?
Does the company engage independent entities to verify or certify its energy production and consumption?
Does the company offer updates on its progress towards achieving its target?
Does the company provide detailed information on the additionality of its renewables purchases?
Does the company use carbon offsets to compensate a large chunk of its emissions?
Does the company use carbon offsets to compensate emissions for which low-carbon alternatives exist?
Does the company claim to be “carbon neutral”?
After buying offsets, has the company implemented additional changes to sustainably reduce emissions (such as installing solar panels, making processes more energy efficient or electrifying machines)? Has the company achieved a decrease of emissions due to these long-term, sustainable measures and not only the carbon offsets it purchased?
Does the company explain where by how much and through which method it is offsetting?
Does the company claim to use hydrogen as a mitigation solution in a sector or process where electrification is a better solution (such as automobiles or heating)?
Does the company rely on underdeveloped CDR for reducing its emissions?
Does the company use CDR to compensate for emissions for which low-carbon alternatives exist?
Does the company include gas in its emissions reduction strategy and present it as a “cleaner alternative” or “transition fuel”?
Does the company invest in gas production and related infrastructure?
Does the company use CCS to compensate for emissions for which low-carbon alternatives exist?
Does the company report specific and quantifiable carbon capture and storage metrics, such as the amount of CO2 captured and stored annually, and are these metrics independently verified or audited?
Is the company using CCS in addition to using other measures to substantially and sustainably reduce emissions (such as installing solar panels, making processes more energy efficient or electrifying machines)?

Other tools & resources to spot greenwashing

Carbon capture and storage: Where are we at?

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Key points

  • The history of CCS is one of unfulfilled expectations. Only 10% of CCS projects undertaken thus far have been built.
  • There is currently unprecedented momentum behind CCS. It has attracted over USD 2 billion in annual investment since 2020 and capacity could increase 600% by the end of the decade.
  • Though it has widespread applications, CCS currently only really makes sense in producing cement.
  • The focus of CCS should be on storing CO2, not on increasing fossil fuel production or even using captured carbon to make products.

What is CCS?

Carbon capture and storage (CCS) refers to myriad CO2 capture technologies, transportation systems and storage methods. As such, CCS is best viewed not as a technology per se – unlike solar and wind – but rather as an “integrated infrastructure” (comparable for instance to existing natural gas infrastructure), which broadly consists of four components:

  • Capture: Technologies that actually capture CO2, either before or after burning
  • Transportation: The captured CO2 then needs to be taken somewhere, either by pipeline or ship
  • Use: The CO2 can then be either used for a specific purpose (see CCUS below)
  • Storage: Or it can be stored more permanently, typically underground.

Based on these components, there are three broad categories we can use to define CCS applications:

  • CCS: A system where the CO2 is captured and stored permanently.
  • CCU (carbon capture and utilisation): A system where the CO2 is instead used in processes, such as producing fizzy drinks, or to make products like building materials. Some applications use the CO2 after it has been captured, while in other cases, the carbon and the oxygen need to be separated through chemical and biological conversion processes so the carbon can be used as a feedstock.
  • CCUS (carbon capture, utilisation and storage): A system where the CO2 is both used and stored. This refers exclusively to enhanced oil and gas recovery (see below).

For the sake of simplicity, when discussing the topic more generally, this briefing will use the acronym CCS, unless it is important to distinguish between these categories.

The main technological component of CCS is the capture technology

A broad range of technologies qualify as CCS, but they have fundamentally different applications. There are capture systems that are directly fitted onto a power plant or an industrial facility that reduce their emissions at source – these are more traditional applications of CCS. These systems can use a chemical or a physical process to capture the CO2 before it is emitted into the atmosphere (see Appendix I for an overview of several technologies).

There are also technologies that directly extract CO2 from the atmosphere, known as carbon dioxide removal (CDR). Organisations like the IEA view CDR as a specific type of CCS, including technologies like direct air capture (DAC) or bioenergy with CCS (BECCS). But this is disputed. Others aim to distinguish between fossil-based CCS, and non-fossil based CCS (which includes BECCS and DAC). However, at its core, CCS is meant to reduce emissions from power stations or industrial facilities, whereas CDR is designed to actually remove CO2 from the atmosphere. As such, this briefing will not focus on CDR.

Transportation and storage is more straightforward

After it has been captured, CO2 can be transported via pipeline or ship. These infrastructure networks could eventually resemble those we use for oil and gas today. It can then be stored in dedicated geological storage sites, such as deep saline formations – essentially deep, underground rock formations – or in depleted oil and gas wells.

CO2 can alternatively be used, post-capture

It can either be used directly or converted into a feedstock:

  • Direct use: It can be used to boost yields in greenhouses, in enhanced fossil fuel production or in producing carbonated beverages.
  • Conversion: It can be used to produce various fuels and chemicals, as well as building materials like concrete by injecting CO2 into the mixture to form a binding agent.

In theory, CCS could be applied to any sector that emits carbon, which is every sector of the economy – from power generation and waste incineration to heavy industry and hydrogen production (see Appendix III).

What are the prospects for CCS?

The history of CCS is characterised by failure

Between 1995 and 2018, over 260 CCS projects were undertaken. Of these, only 27 were ever completed. This despite massive government support following the global financial crisis of 2008-2009. Governments across the world provided USD 8.5 billion in support to CCS projects, but only 30% of that funding was spent as projects failed to get off the ground.

Those that have been built do little to reduce emissions. By the end of 2021, there was only 44 million tonnes a year (mtpa) of capture capacity globally, according to BloombergNEF. This is spread across 27 operational projects – one in the power sector, three in hydrogen production and 23 in industry. To put this into perspective, at this capture capacity, CCS could only capture 0.1% of global emissions. 

But there is now unprecedented momentum behind CCS

However, 2021 was also the year in which the pipeline for new projects began to swell. By November of that year, around 100 new CCS facilities had been announced, bringing the global total to almost 200.

This growth is also reflected in higher inflows of capital. Global investment into CCS hit USD 2.3 billion in 2021, down from USD 3 billion in 2020, but over twice as much as in 2018 and 2019. Investment in this case is a lagging indicator and usually comes one or two years after a project has been announced. As such, the growing pipeline would suggest that investment will not only rebound, but surge in the years ahead. Indeed, several major projects are expected to reach their final investment decision in 2022, which will push the total amount of capital deployed in the sector above USD 3 billion for the first time. 

With higher investments and more projects in the pipeline, global capture capacity could surge at a compound annual rate of 18% between now and the end of the decade, BloombergNEF forecasts – the fastest growth rate CCS has seen in a decade, though admittedly this rate is coming from a low baseline. If all these projects are built, capture capacity would then reach 225 Mt/yr – a fivefold increase from today’s levels, but still orders of magnitude below energy-related global emissions, which hit 36 gigatonnes of CO2 (GtCO2) in 2021 (or 36 billion tonnes of CO2). 

North America and Europe account for the largest share of the CCS pipeline

Between them, these regions host over 70% of the global CCS pipeline, BloombergNEF data show. 
The US has the largest operational capacity and pipeline, due to a favourable policy environment – since 2018, the 45Q tax credit has provided a subsidy to the tune of USD 50 a tonne of carbon stored permanently. This is increasing to USD 180 under the recently-passed Inflation Reduction Act. Additionally, in November 2021, President Biden signed the Infrastructure Investment and Jobs Act, which earmarked around USD 12 billion for the development of CCS projects. The majority of operational US CCS projects are connected to enhanced oil recovery (EOR) – a process of injecting CO2 into oil wells to extract as much oil as possible.

There are a number of large developments in Europe as well, but these are more focused on storage. In Norway, the government has provided USD 1.8 billion in support to the Longship Project, which includes the Northern Lights offshore storage hub. The Dutch state has pledged EUR 2.1 billion to develop the Porthos CCS hub in the Port of Rotterdam. In the UK, the government has committed GBP 1 billion to building four CCS hubs by 2030. 

Other regions are also actively expanding their capacity. The Australian government, at least before the recent election, announced AUD 250 million in funding for CCS hubs. Meanwhile the Canadian government has announced CAD 319 million in research and development funding for CCS technologies. In China, the provincial government in Guangdong recently announced the construction of its first offshore CCS hub, as a joint venture with Shell and Exxon. However China’s commitment to CCS remains small – it has three operational facilities, and three others in various stages of development.

The power sector has the largest pipeline

With a development pipeline of 48 projects, the power sector has attracted most CCS attention, according to BloombergNEF. This despite the well-documented limitations (see below). 

Hydrogen has a pipeline of 37 projects, making it the second largest sector after power. Most of these are in early stages of development and are unlikely to be brought online until later this decade, BloombergNEF suggests. With increasing demand for low-carbon hydrogen, producers see an opportunity for blue hydrogen – produced using natural gas and CCS – to meet some of that demand.

What is striking is that the sectors that would be best served by CCS (see below) – cement and steel production – have the smallest number of projects in the pipeline. This suggests that CCS is being prioritised in the wrong sectors.  

Oil and gas companies developing CCS projects

ExxonMobil is by some distance the market leader. It has a total of 25 mtpa of capture capacity spread across its portfolio – both operational facilities and those in the pipeline. Other oil majors, such as TotalEneriges, Eni, Equinor and Shell, are also among the top ten largest CCS players. Companies that specialise in liquefied natural gas (LNG) are also heavily involved – Rio Grande LNG has a cumulative capacity of 5 mtpa, more than Shell.

How feasible are all these pipelines?

Proponents of CCS stress that it is a cost effective way to meet climate goals. Though CCS could be used to decarbonise existing and future energy assets, its feasibility varies by application.

The power sector

In electricity, CCS has widely been seen as a failure. This is also the sector with the most readily-deployable alternatives, namely solar and wind. Fundamentally, CCS has failed to take off in the power sector for two reasons – cost and the growing competitiveness of renewables. 

CCS requires additional energy to function above and beyond the needs of the power plant. This is known as the energy penalty, and it makes a CCS-equipped facility more expensive. This has been exacerbated by the extreme cost decline in renewables, which have become the most cost-competitive sources of electricity generation. Despite inflationary pressures, onshore wind and solar are 40% cheaper than new gas and coal capacity, even without CCS.

Both factors mean the potential for CCS in the power sector is exceedingly small. This means that a number of projects in the development pipeline will not, like many before them, see the light of day, while many that are built will become increasingly uncompetitive against renewables and so be priced out of the market. Of all projects that have been cancelled so far, 66% have been in the power sector.

Heavy industry

The picture for heavy industry is different. CCS is seen as a key decarbonisation tool in cement production and steelmaking, although less so in the chemicals industry. As noted above, however, neither the cement nor the steel sector has a large pipeline of CCS projects. Though CCS is seen as a necessary tool to cut emissions, these industries are only slowly adopting it.

CCS is currently the only way to decarbonise the cement sector, which is a major emitter, contributing about 7% of global emissions. These come both from the fossil fuels used to generate the heat needed to make cement, but also from the chemical composition of the raw materials used. Cement is made through a calcination process, where CO2 is burned off the limestone. Put simply, you cannot make cement without emitting CO2, and the lack of alternatives make CCS a necessity for cutting emissions from the sector. Moreover, it can be deployed at some scale before 2030, research by Agora Energiewende finds. There is also support within the industry for reducing emissions – major construction and engineering firms have joined forces in the ConcreteZero initiative, a group of 17 companies that pledge to have 30% of the concrete they use low-emission by 2025 and 50% by 2030.

In theory, there is also potential for CCS in steelmaking, but it is more limited due to the cost competitiveness of alternatives. Though retrofitting blast furnaces with CCS could cut CO2 emissions from the sector by 86% by 2050, the mitigation potential by 2030 is much smaller, Agora Energiewende finds. In fact, other processes, such as using hydrogen, could reduce emissions by 66 mtpa by 2030, compared to 26 mtpa with CCS. When it comes to re-smelting existing steel and iron, direct electrification through electric arc furnaces is already widely used. Much of the research done into steel decarbonisation has focused on European industry and globally there may be some room for CCS as part of a portfolio of solutions, but it is far from a silver bullet.

Hydrogen production

CCS is seen as playing a role in producing clean hydrogen. Blue hydrogen, manufactured using natural gas or coal and CCS, is one way of making it. However, it is unlikely to be a cost effective option in the future. By 2030, green hydrogen – made with electrolysers running on renewable energy – is expected to undercut blue hydrogen across all major markets, BNEF finds. Nevertheless, there will be some room for blue hydrogen as well. This is partially due to costs – even with today’s gas prices, it is still cheaper than green hydrogen. It is also due to the energy requirement for manufacturing hydrogen. To supply enough green hydrogen in the future could require up to five times the existing installed solar and wind capacity. 

The drawbacks of CCS

CCU and CCUS have low mitigation potential

In the case of CCU, its ability to offset emissions depends on the lifecycle of the products the captured CO2 is used to create and the amount of energy that is required to make them. If, for instance, it is used to produce plastics that are then burned within a year, the CO2 is still emitted, simply at a later date. However, if the CO2 is used in concrete, which has a much longer lifecycle, then it has more mitigation potential.

If the CO2 needs to be converted into something else before being used, its mitigation potential decreases significantly. This is because of the compound’s low thermodynamic potential. Essentially, CO2 is a very stable compound and separating the carbon from the oxygen requires lots of energy. Widespread use would increase demand significantly, making it more difficult for clean energy sources to meet global energy demand. As such, CCU could end up increasing net emissions, because the energy required would not necessarily come from renewables and it is by no means a given that all these emissions would be captured. Large scale CCU is likely to be a “distraction” and so CO2 should only be used as a feedstock where there are no other alternatives.

To give an example of how energy intensive it is to convert CO2 into a useful element at scale, consider the amount of additional electricity needed to electrify the EU’s chemicals industry. In this example, electricity is used to facilitate CCU, by the energy input to help convert CO2. This process would add 4,400 TWh of electricity demand. Current EU electricity demand is 3,200 TWh. This represents 140% of electricity demand in the EU today.

Most projects today focus on CCUS

Most facilities that are currently in operation are connected to natural gas processing facilities and the CO2 that they capture is often used in EOR. Around 74% of operational facilities either entirely or partially depend on EOR for revenue. The fact that most CCS projects are tied to EOR was by design – these projects received over 42% of public spending on CCS in 2011.

Though some literature suggests that EOR could have a net negative impact on emissions, once the process scales up significantly, the CO2 released by burning the recovered oil and gas more than offsets the CO2 stored. As such, emissions only grow.

That being said, while most CCS projects in the past focused on EOR, the number of projects in the pipeline shows that geological storage is now becoming more popular. This suggests the industry is moving away from focusing on EOR, and indeed CCUS, towards prioritising storage. 

Cost profiles of CCS vary enormously

The costs of CCS are split across capturing carbon, transporting it and then storing or using it. When it comes to capturing carbon, the more concentrated the source, the cheaper it is to capture. This can vary from as little as USD 10 per tonne of CO2 (/tCO2) to USD 300/tCO2.

Building the infrastructure to transport and store carbon is significantly more expensive as it requires scale to make economic sense. This can add as much as USD 74/tCO2. It is for this reason that governments, such as in Norway and the Netherlands, are providing subsidies to help pay for the transportation and storage infrastructure to make the projects more economically feasible. 

When combined, costs can vary between USD 22/tCO2 in natural gas processing to USD 374/tCO2 in making aluminium. As outlined above, these costs make CCS uneconomic in some sectors.

Not all CO2 is captured

A major concern about CCS is that it does not capture all emissions. In practice, many facilities only capture 65% of emissions when they begin operating, which steadily increases to 90% after a few years of operation. The reason is not that it is impossible to capture all carbon emissions, but rather the costs increase exponentially the more carbon is captured.

There are also worries about CO2 leakage from transportation and storage sites, much like the issue with methane today. Through close monitoring and evaluation, many of these leaks could be plugged before emitting too much carbon, but it does illustrate that the less reliant the world is on CCS, the less wary of carbon leaks it will need to be. Civil society groups are sceptical of just how safe and permanent CO2 storage can be. The failure of the large-scale Gorgon CCS facility in Australia to store the required amount of carbon has proven to be a case study in the shortcomings of CCS.

Social concerns could become an issue

From an environmental justice perspective, there is a worry that increasing dependence on CCS could lead to new forms of exploitation or neglect. If CO2 storage becomes increasingly important, a crucial issue will be who decides where the storage sites are situated. Deep saline formations, which are seen as the most feasible storage sites, are widespread both onshore and offshore. For example, in the absence of transparent and strong governance structures, selecting CO2 storage sites could transgress on land rights issues. Issues that fossil fuel infrastructure currently face, such as the Keystone XL pipeline, would also be problems for CO2 transportation infrastructure.

Appendices

Appendix 1: Different capture technologies
Appendix 2: Use cases of captured carbon
Appendix 3: Applications of CCS

IPCC WGIII report: Bioenergy with carbon capture and storage (BECCS)

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This briefing summarises the main insights in the IPCC Working Group III report on Bioenergy with Carbon Capture and Storage (BECCS). The focus is on potential and feasibility of BECCS in climate mitigation, rather than the broader bioenergy sustainability topics.

Key points

  • BECCS can help to mitigate climate change, but it is not a silver bullet solution.
  • BECCS could have positive impacts, but there are many uncertainties, particularly when considering environmental and socio-economic issues.
  • BECCS is one of the heavily relied upon CDR methods used in climate models, but an area twice the size of Egypt could be needed to deploy BECCS in 2100 in pathways limiting warming to 1.5°C. Very large scale deployment would threaten food production and security, and damage ecosystems.
  • Delaying mitigation would put a lot of pressure on CDR, requiring large-scale deployment of BECCS to reduce the temperature overshoot, causing substantial land use change. Earlier mitigation would be essential to reduce the pressure on land and its associated impacts.

Bioenergy and BECCS: The basics

Bioenergy refers to energy products, such as fuels or electricity, that come from organic sources (e.g. waste, wood or crops). 1 Chapter 7, p. 77 It is often promoted as a ‘climate neutral’ solution, as in theory these organic sources only release the carbon dioxide (CO2) they had already absorbed when burnt. But, this characterisation depends on many assumptions, such as the type of feedstock used. Bioenergy could also help deliver other mitigation options, such as carbon sequestration from integrating trees into crop systems (e.g. agroforestry) that provide the feedstock for bioenergy.

When combined with carbon capture and storage (CCS), bioenergy is seen as a carbon dioxide removal (CDR) option. This is because the CO2 emitted is then captured and stored in geological, terrestrial, or ocean reservoirs, or in manufactured products. BECCS may also reduce net GHG emissions by displacing the use of fossil fuels with renewable biomass in the production of heat, electricity and fuels. 2Chapter 7, p. 77, Chapter 6. p.93

Benefits and risks of BECCS

The IPCC is careful when talking about BECCS. It stresses that it is a crucial CDR option, but its potential depends on many social and environmental considerations (e.g. the choice of feedstock, management practice, and deployment strategy and scale). The report does not assess all these options in-depth.

BECCS could have positive impacts, the IPCC says. But only if some strategies are followed to enhance its benefits, such as adopting management practices that protect carbon stocks. 3 Chapter 7, p.81 The use of feedstocks that do not need land (e.g. municipal organic waste or harvest residues) could also provide bioenergy at a significant, but limited, scale. 4 Chapter 7, p.78, Chapter 6, p. 40 These can reduce negative impacts associated with land use. Selecting crops that can produce both protein feed and biofuels could also reduce pressure to convert lands. 5Chapter 12, p. 103 Some technologies could generate co-benefits, such as anaerobic digestion of organic waste and wastewater, and those that convert indigestible biomass like algae into food and feed. 6Chapter 12, p. 103

If BECCS is poorly planned, however, it can “have adverse socio-economic and environmental impacts, including on biodiversity, food and water security, local livelihoods and on the rights of Indigenous Peoples, especially if implemented at large scales and where land tenure is insecure”. 7 SPM, p.47 Major scale-up of bioenergy production, for example, will need more than wastes/residues and cultivation on marginal lands. This will require more land and water, harming biodiversity and, potentially harming food security. Thus, “bioenergy systems may fail to deliver near-zero emissions depending on operating conditions and regional contexts”. 8Chapter 6, p.42

The IPCC says “it is therefore not possible to precisely determine the scale of bioenergy and BECCS deployment at which negative impacts outweigh benefits”. 9Chapter 7, p.77-78 “As a result, bioenergy carbon neutrality is debated… and the lifecycle emissions of BECCS remain uncertain and will depend on how effectively bioenergy conversion processes are optimised”. 10Chapter 6, p.42 The future of BECCS also depends on the roll-out of CCS technologies, it adds. 11Chapter 7, p.96 and chapter 7 , p. 6

Mitigation potential of BECCS

Bioenergy and BECCS can represent an important share of the total mitigation potential, the IPCC says, but conclusions on how big a share vary due to the large diversity of studies and their assumptions about where and how BECCS is deployed (e.g. the associated land use). 12Chapter 7, p.7 13Chapter 7, p.79 The IPCC concludes that:

  • The range of recent estimates for the technical bioenergy potential when constrained by food security and environmental considerations is 5–50EJ/yr by 2050 for bioenergy that uses residues for feedstocks, and 50–250 EJ/yr by 2050 for a dedicated biomass production system. 14Chapter 7, p.6 For context, 250 EJ/yr is equivalent to 20%–30% of global primary energy demand.
  • The global technical CDR potential for BECCS by 2050 (i.e. considering only the technical capture of CO2 and storage underground) is estimated at 0.5-11.3 billion tonnes of CO2 a year (GtCO2 a year). 15Excluding economic costs and/or sustainability concerns 16Chapter 12, p. 55.”These potentials do not include avoided emissions resulting from the use of heat, electricity and/or fuels provided by the BECCS system”. But, when considering cost effectiveness (less than USD100 per tonne of CO2-eq), the potential is reduced to 0.2- 9.9 GtCO2 a year. 17Chapter, 7, p.45 Currently, only 40 million tonnes of CO2 is captured a year via CCS, meaning we would need nearly a 150-fold increase in CCS capacity for this amount of BECCS. Moreover, most of the captured carbon today is used for enhanced oil recovery (EOR), rather than permanent geological storage. This undermines emissions cuts as emissions from burning recovered oil could more than offset the benefits of capturing the carbon dioxide in the first place, by a factor of up to three.

Therefore, the IPCC urges caution about these estimates as they reflect only biophysical and technological conditions. These estimates can be reduced when factoring in economic, environmental, socio cultural and institutional constraints. For example, the mitigation effect of BECCS could be reduced if models start to include the diminishing ability of land to remove CO2 from the atmosphere due to future climate change.

The role of BECCS in mitigation pathways

There has been “fervent debate” on the use of bioenergy with CCS in mitigation scenarios. 18Chapter 3.2.2 Reliance on it has been criticised for causing biodiversity loss, undermining food security, creating uncertain storage potential, excessive water use as well as creating the potential for temperature overshoot. 19Chapter 3, box 3.4 The overall land for bioenergy production is modelled to take place in tropical regions, where croplands for bioenergy displace land for food production (cropland and pasture) and other natural land. For example, in the 1.5°C mitigation pathway in Asia, bioenergy and forested areas together increase by about 2.1 million square kilometres – an area the size of Saudi Arabia – between 2020 and 2100, mostly at the cost of cropland and pasture. 20Chapter 7, figure 7.14 BECCS is also typically associated with delayed emissions reduction in the near-term. 21Chapter 3, box 3.4

Among CDR methods, BECCS is one the most common in climate models (i.e. integrated assessment models, or IAMs) to limit temperature rise to 2°C or lower. 22Afforestation and reforestation is also widely used. See here for more info. Currently, few models represent other options, such as biochar or soil carbon sequestration. In fact, all illustrative mitigation pathways (IMPs) from the WG3 report primarily BECCS (for comparison with other land CDR options and discussion of BECCS in models, see here).

Across the scenarios reviewed by the IPCC, in those likely to limit warming to 2°C or lower, the cumulative volumes of BECCS reach 328 (median values) GtCO2  respectively for the 2020-2100 period. Translated to annual volumes, the IPCC sees BECCS removing about 2.75 GtCO2 a year. 23 Chapter 12, p. 40 To put this into perspective, scientists predict that up to 10 GtCO2 will need to be removed annually to reach global emissions targets by 2050.

Many IAM pathways include large increases in cropland area to supply biomass for bioenergy and BECCS, with 199 (56-482) million hectares in 2100 in pathways limiting warming to 1.5°C with no or limited overshoot. 24Chapter 3, p.6 To put this into perspective, 102 million hectares of land – an area the size of Egypt – have been converted to cropland since the start of the 21st century. 

Delaying mitigation would increase pressure on land because it would require large-scale deployment of CDR in the second half of the century to reduce temperature overshoot. The main CDR measures are BECCS and afforestation and reforestation because climate models use these measures as proxies for land-based mitigation. This will cause substantial land use change in 2050. Early mitigation reduces the amount of land required for this, though at the cost of larger land use transitions earlier in the century. Earlier action could also reduce climate impacts on agriculture and other land-mitigation options. 25Chapter 3, p.66

  • 1
     Chapter 7, p. 77
  • 2
    Chapter 7, p. 77, Chapter 6. p.93
  • 3
     Chapter 7, p.81
  • 4
     Chapter 7, p.78, Chapter 6, p. 40
  • 5
    Chapter 12, p. 103
  • 6
    Chapter 12, p. 103
  • 7
     SPM, p.47
  • 8
    Chapter 6, p.42
  • 9
    Chapter 7, p.77-78
  • 10
    Chapter 6, p.42
  • 11
    Chapter 7, p.96 and chapter 7 , p. 6
  • 12
    Chapter 7, p.7
  • 13
    Chapter 7, p.79
  • 14
    Chapter 7, p.6
  • 15
    Excluding economic costs and/or sustainability concerns
  • 16
    Chapter 12, p. 55.”These potentials do not include avoided emissions resulting from the use of heat, electricity and/or fuels provided by the BECCS system”.
  • 17
    Chapter, 7, p.45
  • 18
    Chapter 3.2.2
  • 19
    Chapter 3, box 3.4
  • 20
    Chapter 7, figure 7.14
  • 21
    Chapter 3, box 3.4
  • 22
    Afforestation and reforestation is also widely used. See here for more info.
  • 23
     Chapter 12, p. 40
  • 24
    Chapter 3, p.6
  • 25
    Chapter 3, p.66

The role of carbon capture and storage in limiting warming to 1.5C

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Key points 

  • Retrofitting existing fossil fuel assets with CCS is being proposed as one option to reduce the amount of emissions already locked in by existing infrastructure
  • But high costs, and the plummeting cost of renewables, is eroding the economic case for retrofitting existing fossil fuel power plants with CCS. In most cases, earlier retirement of assets would be more economically efficient than retrofits
  • CCS technologies remain stagnant and costly, and push up the cost electricity when used in power generation
  • Questions over geological storage and water availability further undermine CCS as a solution for existing fossil fuel assets.
  • Only one out of the existing 26 operational carbon capture and storage (CCS) projects is in the power sector. The majority of existing CCS projects are in the oil and gas sector as a part of enhanced oil recovery

Existing fossil fuel infrastructure will put 1.5°C out of reach 

Energy infrastructure has an extremely long lifetime. Coal and gas-fired power plants have historically operated on average for 39 and 36 years respectively. If all energy infrastructure continues to operate until the end of its typical lifetime, cumulative global emissions between 2020-2050 would amount to 650 Gt CO2, according to the IEA’s Net Zero by 2050 report. This is 30% more than the remaining carbon budget, estimated at 500 Gt CO2, that is consistent with limiting global warming to 1.5°C (with a 50% likelihood) by the IPCC Working Group I report. As a result, alignment with 1.5°C means no new coal, gas or oil extraction, while existing demand for unabated coal must decline by 98% to just 1% of total energy use by 2050.

The electricity sector accounts for more than 50% of the total emissions from existing fossil fuel assets, 40% of which comes from coal-fired power plants alone. Therefore, existing assets face four main choices in order to stay within the remaining carbon budget:

  1. Accelerating retirement (in scenarios that limit warming to 1.5°C, global coal and gas power generation’s operational lifetime are shortened to nine and 12 years respectively)
  2. Reducing utilisation
  3. Switching to low carbon fuel sources
  4. Retrofitting with CCS

Carbon capture retrofits cannot compete with the plummeting cost of renewables

As of 2021, the costs for new solar PV and onshore wind are increasingly undercutting existing coal-fired power plants. Data from the IRENA Renewable Cost Database show that between 2010 and 2020, the cost of electricity from utility-scale solar photovoltaics (PV) fell 85%, from concentrated solar power by 68%, from onshore wind by 56% and from offshore wind by 48%.

Retrofitting plants with CCS is very costly – CCS for coal or gas electricity generation facilities are almost double the capital cost of power generation projects without CCS. Rapidly falling costs in wind and solar energy are eroding the economic value of CCS as a mitigation option by up to 96%, according to a paper published by the Grantham Institute. 

The Boundary Dam CCS power plant project in Canada is the only commercially operational CCS coal power station in the world today (the only other operational CCS project for the power generation sector, Petra Nova, was shut down in 2020 as a result of high operational cost). The technology is installed on one 110MW boiler (small in comparison to typical project sizes of 500MW). It cost of USD 1.5 billion, of which $800 million was for the installation of the CCS technology and the remaining USD 500 million for retrofit costs. A leaked internal memo from November 2014 suggests the project has “serious design issues”, having suffered numerous technical problems in its first year. Even in 2021 it was only running at an average of ~30% capacity. Since 2014, it has only captured 4.3 Mt of CO2, compared to its total theoretical CO2 capture capacity of 1 Mt a year.

CCS is an extremely energy-intensive process, and the higher fuel requirement for the process adds further to the operational cost of plants. A 2017 study looking at potential applications of CCS on Indian power plants, for example, estimated that the costs of electricity would increase by 63-76%.

While renewable energy is expected to continue to decline in cost, CCS development has remained stagnant in the last 30 years. Currently there are only 26 operational CCS projects in the world, with only one facility in the power generation sector. On the carbon storage side, the vast majority (20 out 26) of projects use the captured CO2 for enhanced oil recovery (EOR), rather than permanent geological storage. Captured CO2 used for EOR undermines emissions cuts, where emissions from burning recovered oil could more than offset the benefits of capturing the CO2 in the first place by a factor of up to three. Research indicates that tonnages of CO2 injection are often overestimated, or facilities have stopped injecting sooner than is reported. 

The additional capital and operational costs in power generation increase the cost of electricity, which can create cost barriers to energy access in developing countries. As such, CCS deployment should focus on capturing CO2 in industry for permanent geological storage, rather than on retrofitting fossil fuel power generation.

Water and geological storage further constrain the application of CCS retrofits 

The availability of large volume, permanent, geological reservoirs is critical for the cost effective removal and storage of CO2. The amount of storage space accessible is still to be determined at a global scale. Not only does storage need to be permanent, it also needs to be close to, or within transportable distance from, the point of emissions to make projects viable. The mismatch between the locations of existing power plants and geological location of underground storage is one of key barriers to retrofitting the global fleet of power plants. A study of Indian emission sources indicates that only 14% of Indian emissions are in sites that are located within a range of 100km from geological sink locations. 

CCS is a resource-intensive technology requiring a large amount of water for operations. It has been estimated that CCS can increase power plants’ water withdrawal by 175% and water consumption by up to 150%, compared to plants without CCS. With climate change, regions already prone to water scarcity may experience worsening periods of drought, further limiting the deployment of CCS in power plants in those regions.

IPCC’s upcoming 6th Assessment Report: Physical Science

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The Intergovernmental Panel on Climate Change (IPCC) – the UN body responsible for climate science – is releasing the first of its three-part 6th Assessment Report (AR6) on 9 August, after a virtual plenary held between 26 July and 6 August. This will be an important media moment. The Working Group I (AR6 WGI) report will be the biggest update of the state of knowledge on climate science since the release of AR5 in 2014, and its three recent special reports (SR1.5, SRCCL, SROCC). The reports are ratified after a plenary negotiation in which governments formally approve the summary for policymakers, ensuring high credibility in both science and policy communities. 

The AR6 assessment will consist of three separate reports. ‘The Physical Science Basis’ is the first AR6 report and will detail how the greenhouse gases (GHG) we emit are causing unprecedented damage. The outline for the first report is approved. It will cover topics like extreme weather, human attribution, the carbon budget and feedback cycles, and will chart the current and future state of the climate. 

In preparation for the release of the first AR6 report, this briefing covers some of the major climate science developments since AR5 that are relevant to the current science discourse.

1. Human influence on the climate is an established and indisputable fact

Extreme event attribution studies can also tell us if, and how, climate change made a particular extreme weather event more likely or more intense. The expanded attribution literature shows that heatwaves, droughts, tropical cyclones and compound events are directly linked to human activities. In fact, new research has shown that some extreme events would have been impossible without climate change, like the Siberian heat wave in 2020 and the extreme heat across Asia in 2016. Today, scientists can also conduct attribution studies within a few days of an event occurring. One group of scientists published a study showing climate change made the 2018 European heatwave more likely while it was still going on. Another group was able to make an event attribution forecast prior to 2018’s Hurricane Florence.

The COVID-19 pandemic reminded us how much our actions matter: during the peak of global lockdowns daily emissions dropped by 17% compared to 2019, levels not seen since 2006, and people around the world were allowed a short respite from deadly air pollution. Since then, however, emissions have been rapidly ticking up again. Research has shown that the biggest opportunity from the pandemic is not the short lockdown-triggered emissions break, which will be negligible in the long run, but the potential to now tilt the economy towards a green, sustainable, just and climate centered recovery. 

2. We are closer to important temperature targets

Since AR5, we have emitted nearly 300 billion additional tonnes of CO2, bringing us closer to crucial temperature targets. In its 2018 special report, the IPCC predicted that the 1.5°C target would be breached between 2030 and 2052 in the event that we didn’t change our trajectory. Refined methods and research has since suggested that our carbon budget, a simplified (albeit imperfect) way of assessing how much more CO2 can be released, is slightly smaller than estimated in the IPCC report – leaving only 440 Gt CO2

left from 2020 to stand even a 50% chance of 1.5°C. Global emissions were over 40 Gt CO2 in 2019, and if annual emissions are similar in the next decade, the budget will be used up in the 2030s. 

The way in which scientists measure global temperature change is also more sophisticated: AR5 based its assessment of historical warming on the UK Met Office’s global temperature dataset, HadCRUT4, now an updated version (HadCRUT5) is available for AR6. The new dataset draws on an improved record of global sea surface temperatures, benefitting from more reliable methods of measuring ocean temperatures, and the record also fills in some of the gaps in Arctic data. The Arctic is the fastest warming region on the planet, so the inclusion of this data increases historic global temperature estimates by about 0.1°C. 

Adjustments to the historic warming record may, however, not directly relate to meeting the forward-looking temperature targets of the Paris Agreement. In all previous IPCC assessments there are some scenarios that see us achieve 1.5°C, but the ability to meet this target is driven by the political will and choices of decision-makers, rather than the science itself. It is also difficult to determine at what exact point we exceed a target like 1.5°C. Research from the World Meteorological Organization states there’s a 20% chance that global temperatures could average 1.5°C or above in one of the next five years. But importantly, this should not be confused with exceeding 1.5°C as a long-term average, or breaching the Paris target. 

There has also been an increased recognition that abrupt (and sometimes irreversible) changes to the climate, often called ‘tipping-points’, are more likely to occur in a world where we overshoot 1.5°C. Risks include a destabilisation of the polar ice sheets: future sea level rise is very dependent on what happens to the Antarctic and Arctic ice sheets with destabilisation potentially causing tens of centimetres of sea level rise by the end of the century. In addition, deforestation and global warming could increase the risk of the Amazon crossing into a dry state (so-called forest dieback). Researchers have also shown that passing one tipping point could increase the likelihood of others occurring, compounding risks. 

3. New and updated models have added to our understanding of the climate 

Preliminary results from AR6’s new climate models (CMIP6) have already been picked up by the media, due to suggestions that rising CO2 levels will cause more warming than previously thought. Or, in climate science speak, that the Earth has a higher “climate sensitivity”. The Equilibrium Climate Sensitivity (ECS), defined as the warming that occurs when there is double the amount of CO2 in the atmosphere relative to preindustrial times, is a crucial number for understanding climate change. 

The ECS describes the final warming after the climate fully adjusts over hundreds of years, and was first estimated at 1.5-4.5°C over 40 years ago. In comparison, the new CMIP6 models produce ECS values between 1.8-5.6°C, but almost all scientists working on the CMIP6 project have now ruled out the highest estimates. Recent research narrowed down the range further and excluded the most extreme values, arguing that the best estimate sits somewhere between 2.6-4.5°C. 

Another metric, the Transient Climate Response to cumulative Emissions of CO2 (TCRE), which describes the initial amount of warming we can expect in the coming decades, is more directly relevant to the remaining global carbon budget agreed in Paris. Since AR5, our understanding of the TCRE has expanded, with some model results indicating that it is similar or slightly higher than previous estimates, and new research has narrowed the range by about 30%. Intense debate is ongoing about the exact sensitivity numbers (ECS & TCRE), as well as the uncertainties and how the values influence carbon budgets. 

AR6 also draws on new future scenarios, built by teams of economists, climate scientists and modellers. These ‘Shared Socioeconomic Pathways’ (SSPs) explore how global economy and society may change over the next century, allowing a wider range of possible futures and offering a broader view of “business-as-usual” than the ‘Representative Concentration Pathways’ (RCPs) in AR5. 

4. Scientists are concerned about non-CO2 greenhouse gases, especially rising levels of methane

Achieving the Paris Agreement’s goals requires rapid mitigation across the full range of greenhouse gases. Methane and nitrous oxide concentrations are now higher than at any point in the last 800,000 years.

Since the pre-industrial period, CO2 has caused most warming, followed by methane – a particular focus of research in recent years. The concentration of methane is already running well above the safe limits outlined in AR5, increasing steeply since about a decade, and some scientists have suggested that methane’s warming effect is higher than estimated in AR5 (over a 100 year period). Even though there is over 230 times more CO2 in the atmosphere, methane is responsible for almost a quarter of warming. Methane only stays in the atmosphere for about 12 years, but it has a warming potential approximately 30 times that of CO2 over a century, and almost 90 times in a 20-year period.

Human activities were responsible for 50-65% of total methane emissions between 2008-2017, with agriculture and waste contributing most to the rise (56-60%), followed by the fossil fuel industry. But estimating by exactly how much, and from where, methane emissions are increasing is a topic of continued research and debate. Both coal mining and oil and gas production have grown along with methane emissions. By looking at the “atmospheric fingerprints” (isotopes) of methane some researchers have found that the role of North American shale gas – or fracking – has been significantly underestimated. Scientists have also investigated potential natural leaks of methane, and the risk of sudden methane releases from thawing Arctic permafrost.

AR6 will also be the first IPCC assessment to dedicate a whole chapter to so-called “short-lived climate forcers”, like aerosols, particulate matter and other reactive gases (such as ozone) that exist in the atmosphere for a few hours to a few months. In contrast to CO2, mitigating these gases can have an immediate impact on temperature due to their shorter lifetime. Since in most cases their reduction could also improve air quality and save lives, this is seen as a ‘win-win’ policy option. 

5. We know more about net-zero and the potential plus pitfalls of carbon removal 

Half of global GDP is generated in regions that have set (or are debating) net-zero targets, representing over 2.6 billion people. Net-zero is a target guided by science. Studies show that the climate system will continue to warm unless we reach net-zero greenhouse gases globally. Scientists continue to demand net-zero targets that are transparent: asking for them to clarify the scope, fairness and approach. Net-zero targets are in themselves not end-points, but better understood as a milestone on the path to negative emissions and therefore require long-term roadmaps as well as short-term goals.

The refined estimates of Earth’s climate sensitivity has led to some debate about the implications for our timeline to both achieve net-zero and stay below the 1.5 or 2°C temperature targets. But the relationship between these two factors is complicated and indirect. Regardless, scientists continue to stress that the best way to mitigate and avoid the most devastating impacts of climate change is to cut emissions early on and deeply in this decade with the aim of reaching net-zero as early as possible.

So what happens after net-zero is achieved globally? Scientists generally agree that net-zero will lead to a stop in temperature rise. Though models still vary on exactly how long this will take after zero. A cessation in temperature rise, however, must not be confused with a temperature reduction. As CO2 is cumulative, the amount that is in the atmosphere when we hit net-zero will determine peak temperature, unless that CO2 is removed. And even if all emissions stop, ice sheet melting and resulting sea level rise will continue, albeit slower than if we continue warming the planet. As such, the need for adaptation policies and finance, as well as provision for Loss and Damage for poor and affected communities, will remain. 
But new research finds that rapid emissions cuts reduce our risks of ‘unprecedented rates’ of warming, which would make it harder for ecosystems and societies to adapt. As such, near term emissions cuts will bring significant benefits within our lifetimes, not just in the long run. To achieve this, however, governments and businesses need to follow ambitious near-term Paris-aligned climate plans. 

Pretty much all scenarios that bring us within 1.5°C or 2.0°C rely on some form of carbon dioxide removal (CDR). Methods of removal range from enhancing natural carbon drawdown through reforestation, restoration and the protection of nature, to “negative emissions technology” like direct air capture (DAC) and bio-energy with carbon capture and storage (BECCS). 

Our reliance on CDR is however somewhat naive, as all methods of carbon removal come with side effects and tradeoffs that are context and method dependent – such as the huge land areas needed for BECCS, or energy requirements for DAC. Delayed mitigation has increased our dependence on CDR and the simple truth is that the more carbon we emit now, the more we will rely on negative emissions to stay within our target temperatures. It is fundamentally necessary, however, to immediately protect biodiversity, ecosystems and restore nature. Not just for the climate, but also to warden the rich diversity of life on our planet and to maintain people’s livelihoods.  

Scientists have studied the so-called “overshoot scenarios”, that see emissions in the near-term compensated by carbon removal that reaches “net-negative” in the latter half of the century. They found that delayed reaction time of several climate processes means even a temporary overshoot of temperature goals will result in more climate change in comparison to no overshoot (i.e. more sea level rise, acidification of the ocean, permafrost loss or perturbation of the carbon cycle). 

In the IPCC’s most recent special report (SR1.5), only 9 out of the 222 assessed temperature pathways have no overshoot, and only 44 go over 1.5°C by less than 0.1°C (low overshoot). However, there are no IPCC scenarios that completely guarantee 1.5°C. Even the most ambitious pathways see a 66% chance of keeping global temperature rise to under 1.5°C, meaning that the chances of overshooting is a subject of continued scientific uncertainty.  

Finally, there have been several more studies looking at more invasive geoengineering approaches, like solar radiation management. Though these interventions might help to reduce temperatures immediately and regionally, some of them are seen as high risk endeavours with undesired side effects, especially on the water systems and hence food security. Solar geoengineering also brings novel, and unprecedented, social justice and political challenges. It remains to be seen how the IPCC deals with assessing these technologies. The special report on 1.5°C was the first IPCC report to separate solar geoengineering from more “mainstream” carbon removal. We suspect AR6 will continue this split. 

6. Further reading: Explainers and scientific papers 

The list below summarises some of the important commentaries and scientific papers, focusing on those published in the last two years. It is not a comprehensive review of the scientific literature; think of it as a start. To explore the specific topics further, please refer to the reference lists within these publications.

1. Human influence on the climate is an established and indisputable fact 

Explainers and reports 

Selected academic research studies and reviews  

2. We are closer to overshooting important temperature targets

Explainers and reports

Selected academic research studies and reviews  

3. New and updated models have added to our understanding of the climate 

Explainers and reports

Selected academic research studies and reviews  

4. Scientists are taking account of non-CO2 greenhouse gases

Explainers and reports

Selected academic research studies and reviews  

5. We know more about net-zero and the potential plus pitfalls of carbon removal 

Explainers and reports 

Selected academic research studies and reviews   

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