The energy sector accounts for approximately three-quarters of total greenhouse gas (GHG) emissions. According to the International Energy Agency (IEA), energy-related CO₂ emissions have reached a high of 33.5 gigatons (Gt) in 2018 and have reduced to 33.4Gt in 2019 and 31.5Gt in 2020 mainly due to the Covid-19 economic crisis. In this context, during the last decade carbon capture and storage (CCS) has been relatively insignificant, with approximately 40Mtpa captured in 2020, accounting for only 0.12% of total energy-related carbon emissions.

The Net-Zero Emissions by 2050 Scenario by IEA showcases the requirement for the global energy sector (including energy consumptions from affiliated industries) to achieve net-zero emission, complementing the goal of limiting global temperature rise to 1.5ºC. In this scenario presented by the IEA to achieve net-zero emissions by 2050, CCUS capacity needs to be ramped up by 190-fold and to as much as 7.6Gtpa.

As of 2021, there are as many as 28 commercial CCS facilities, with a total capacity of 40.66Mtpa of CO₂ captured, in which six of the facilities use dedicated geological storage. Until today, many of the CCS facilities are driven by business decisions and commercial consideration, as opposed to being subsidised or supported by policy, regardless of the industry sector. In the oil and gas sector, CO₂ is commonly used to be injected into the reservoir for EOR operations which creates additional economic value through increased production.

The formation of CCUS industrial hubs and clusters will become more common and important to further incentivize new CCS capacity. Hubs and clusters can help to significantly reduce the cost of carbon capture through economies of scale and also reduce investment risk. These hubs work to aggregate, compress, dehydrate and transport CO₂ streams from clusters of facilities to storage sites. An increase in future hydrogen demand is also an incentive for additional CCS capacity. Adding CCS to the dominant steam methane reforming process to produce hydrogen has a lower economic cost at an average of $2.1 per kg of hydrogen than, for instance, producing hydrogen through electrolysis using renewable electricity that can range between $3.7 to $7.7 per kg of hydrogen. In the US, where approximately 47% of current CCS capacity is installed, Congress recently passed a bipartisan bill to increase the carbon capture credit from $50 to as high as $85 per metric ton of CO₂. This policy has the potential to be a strong driver going forward for many oil and gas stakeholders to adopt CCS solutions, as the current cost to capture carbon in power generation ranges from $40 to $80 per ton of CO₂.