Carbon Capture Market Forecast: Regulatory Shifts and Commercial Deployment

By Ankit SinghReviewed by Laura ThomsonJul 31 2025

The carbon capture, utilization, and storage (CCUS) market is at a crucial moment. Growing pressure for climate action, new regulatory landscapes, and rapid advances in technology are all reshaping the industry. In this article, we'll take a closer look at the CCUS market, focusing on important regulatory changes, the main challenges it faces, and real-world examples of how these technologies are being implemented.

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Carbon Capture Market Overview and Growth

As of 2025, estimates put the global CCUS market value between $7 billion and almost $9 billion. Projections indicate it could reach a minimum of $12.9 billion by 2030, with a compound annual growth rate (CAGR) ranging from 15% to 24% depending on the source.

North America dominates the market, accounting for roughly 37-38% of total revenues. The region benefits from a mature infrastructure for carbon capture and a series of robust policy incentives, particularly in the United States.^1,2,3

Stricter emissions regulations, a growing global push for industrial decarbonization, and a wave of corporate net-zero pledges fuel this growth. Industries like cement, steel, natural gas processing, and power generation are at the forefront when it comes to adopting these technologies.

On top of that, the market closely aligns with key global climate goals, especially the Paris Agreement, which stresses the urgency of cutting emissions, but does so in a way that lets industries improve rather than completely overhaul how they operate.^1,3,4

Regulatory Shifts in CCUS Market

Recent regulatory advancements have significantly influenced the deployment of CCUS technologies. In the United States, legislation enacted in 2023 and 2024 mandates that coal and gas power plants implement carbon capture technologies, with the Environmental Protection Agency (EPA) setting emissions reduction targets of up to 90% for coal plants by 2032 and gas plants by 2035, starting compliance efforts in 2025.⁴

Internationally, regulations are evolving; for instance, the United Kingdom's Energy Act 2023 outlines protocols for CO₂ transport and storage, promoting investment by ensuring regulatory stability. Similar measures are being adopted by the European Union, Japan, and other economies through dedicated funding and reforms aimed at bolstering the CCUS sector.^5,6,7

Nevertheless, despite these advancements, global CCUS deployment falls short of the necessary levels to achieve ambitious net-zero targets, as highlighted by the International Energy Agency (IEA), indicating a persistent gap between announced projects and actual investment momentum.⁷

Commercial Deployment and Project Pipelines

The past two years have brought a substantial increase in announced and operational CCUS projects. As of mid-2025, there are nearly 700 projects at various stages of development across the value chain.

This pipeline includes more than 50 operational and 44 under-construction CCS facilities. The number of capture projects in engineering or development doubled over the past year, moving from 121 to 247 globally. The total global operating CO₂ capture capacity is 51 million metric tons per annum (Mtpa), and this figure is on track to double as new plants currently under construction come online.^8,9

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Direct air capture (DAC) projects are also gaining momentum, with four commercial facilities in operation and additional projects under development. While the majority of these initiatives are centered in North America and Europe, substantial growth is anticipated in the Asia-Pacific, Latin America, and the Middle East, driven by industrial expansion and enhanced decarbonization commitments.^1,2,4

Technological and Sectoral Developments in Carbon Capture

Technological advances are pushing the industry forward and reducing costs. Recent studies highlighted the progress in capture efficiencies and integration with industrial sources. Heavy industries, particularly critical sectors such as cement, steel, chemicals, and power generation, play a pivotal role in this implementation due to the limited alternatives available for deep decarbonization. 

Enhanced oil recovery (EOR) remains an attractive commercial route by injecting captured CO₂ into oil fields, further incentivizing CCUS adoption in the energy sector.^4,7,10

Collaboration across various industries is on the rise. For instance, carbon capture is now routinely incorporated into the design of facilities for natural gas processing, hydrogen production, fertilizer manufacturing, and chemical synthesis. Innovations in transport and storage infrastructure, including dedicated CO₂ pipelines and offshore geological storage, are expanding the range of feasible projects and supporting scalability.^8,11

Market Challenges in the Carbon Capture Sector

The CCUS industry shows promise but faces several significant challenges. High upfront investment costs create barriers to project financing and scaling. Establishing capture plants, transport infrastructure, and secure geological storage requires substantial capital. Uncertainties regarding project economics, especially over the long term, present investor risks.

Many CCUS technologies are still in development and lack proven reliability and efficiency at large scales, which increases credit risk for early-stage initiatives.^10,12

Transport and storage present further difficulties. The permitting processes can be lengthy due to safety and liability issues related to handling large quantities of compressed CO₂. Social acceptance of storage sites also varies widely.

CCUS has seen slower adoption than renewable energy sources, such as solar and wind, which benefit from more predictable financing models and established supply chains. In contrast, CCUS often depends on government incentives, risk underwriting from suppliers, and guaranteed contracts to remain economically viable.¹²

Investment and Policy Incentives

Investments in CCUS are booming due to enhanced policy mechanisms. Governments are leveraging tax credits, subsidies, and carbon pricing to strengthen the business case for CCUS development. In 2023, the United States allocated $1.7 billion to support CCUS project pipelines, alongside increased funding for research and demonstration efforts. Europe, Japan, and Canada are also providing diverse subsidies, grant programs, and regulatory support to expedite facility permitting and construction.⁷

Carbon pricing mechanisms and subsidies have become more sophisticated, providing clearer economic signals for operators. Many countries now tie financial incentives to performance benchmarks, ensuring funding targets projects that deliver genuine emissions reductions while aligning with broader net-zero goals.³

The Road Ahead

The CCUS sector is expected to grow quickly over the next couple of years. New regulations will require more power and industrial facilities to capture their carbon emissions or face the risk of shutting down.

The growth of project pipelines depends on successfully getting commercial projects off the ground and addressing investment challenges. As licensing and regulatory systems become more established in key regions, more projects will likely move from the planning stage into actual operation. At the same time, ongoing tech improvements are expected to help cut costs and improve system reliability.

All in all, carbon capture is becoming a central piece of the puzzle in building low-carbon economies. The combination of regulatory pressure, commercial partnerships, and fast-moving innovation continues to drive the market forward. Companies that can adapt to evolving regulations and push through early obstacles will be well-positioned to help shape the future of industrial decarbonization.

References and Further Reading

1. Carbon Capture, Utilization, and Storage Market - Size, Share, Industry Growth Forecast. (2024). MarketsandMarkets. https://www.marketsandmarkets.com/Market-Reports/carbon-capture-utilization-storage-market-151234843.html
2. Carbon Capture And Storage Market Size to Hit USD 50.70 Bn by 2034. (2025). Precedence Research - Market Research Reports & Strategic Consulting. https://www.precedenceresearch.com/carbon-capture-and-storage-market
3. Torpedo Market Report 2025 - Torpedo Market Share And Analysis. (2025). Global Market Research Reports & Consulting | The Business Research Company. https://www.thebusinessresearchcompany.com/market-insights/carbon-capture-and-storage-market-overview-2025
4. Carbon Capture and Storage Market Size, Forecast 2025-2034. (2025). Global Market Insights Inc. https://www.gminsights.com/industry-analysis/carbon-capture-and-storage-market
5. Bush, T. (2024). Navigating Change: The Energy Act 2023’s Framework for Carbon Capture and Storage. decarbonfuse.com. https://decarbonfuse.com/posts/navigating-change-the-energy-act-2023-s-framework-for-carbon-capture-and-storage
6. Navigating change: The Energy Act 2023's framework for carbon capture and storage. (2024). DLA Piper. https://www.dlapiper.com/en/insights/publications/2024/12/navigating-change-the-energy-act-2023s-framework-for-carbon-capture-and-storage
7. Carbon Capture Utilisation and Storage. International Energy Agency. https://www.iea.org/energy-system/carbon-capture-utilisation-and-storage
8. Global Status of CCS 2024 report at a glance. (2024). Global CCS Institute. https://www.globalccsinstitute.com/wp-content/uploads/2024/10/Exec-Summary-At-a-Glance-21-October-Final.pdf
9. Chen, Y. et al. (2025). Timing carbon capture and storage (CCS) deployment across borders: A game-theoretic analysis. Economic Modelling, 151, 107191. DOI:10.1016/j.econmod.2025.107191. https://www.sciencedirect.com/science/article/abs/pii/S0264999325001865
10. Leonzio, G., & Shah, N. (2024). Recent advancements and challenges in carbon capture, utilization and storage. Current Opinion in Green and Sustainable Chemistry, 46, 100895. DOI:10.1016/j.cogsc.2024.100895. https://www.sciencedirect.com/science/article/pii/S2452223624000166
11. Carbon Capture, Utilization and Storage Market - Global Industry Analysis and Forecast (2024-2030). (2024). MAXIMIZE MARKET RESEARCH. https://www.maximizemarketresearch.com/market-report/carbon-capture-utilization-and-storage-market/164767/
12. High Investment Costs and Untested Technology Are Challenges for the Carbon Capture Industry. (2023). Morningstar DBRS. https://dbrs.morningstar.com/research/421543/high-investment-costs-and-untested-technology-are-challenges-for-the-carbon-capture-industry

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