Large yellow industrial gas pipelines at a processing facility under a clear blue sky.

Carbon capture and storage (CCS): How it works and why it matters

As the world grapples with the urgent need to reduce greenhouse gas emissions, carbon capture and storage (CCS) has emerged as one of the critical decarbonisation pathways on the journey towards net zero.

In its Global Energy Perspective 2024

, McKinsey projected that low-carbon energy sources would grow from 32% of global power generation mix today, to 65%-80% by 2050.¹ But while renewable energy, electrification and other technologies are making strides in reducing emissions, they are harder to apply in sectors where operations are energy-intensive and rely heavily on industrial processes, often resulting in process emissions.

For hard-to-abate sectors including cement, waste, fertiliser production, power, chemicals and steel, CCS offers an important solution to help reduce emissions.

While the technology itself shouldn’t be seen as a standalone solution, it can play a key role within broader net-zero strategies – helping businesses transition to cleaner operations while remaining economically competitive. For example, lower-carbon hydrogen is produced from natural gas through a process called steam methane reforming – whereby the CO₂ emissions are captured and stored using CCS technology, making it a lower-carbon hydrogen option.²

Given its vast potential, how does CCS technology work, and how can governments and customers drive further adoption?

How does CCS technology work?

CCS typically follows a four-step process: capture, transport, storage and measuring, monitoring and verification:

Capture

The first stage involves separating CO₂ from other gases produced during industrial processes or fossil-fuel combustion in power plants. There are three primary methods³to capture carbon: post-combustion, which extracts CO₂ from flue gases after fuel combustion using chemical solvents or adsorption techniques; pre-combustion, which removes CO₂ from fuel before combustion, typically in gasification processes; and oxy-fuel combustion, which uses oxygen instead of air for combustion, producing a flue gas primarily composed of CO₂ and water – simplifying CO₂ capture. Once captured, the CO₂ is then compressed into a liquid state and transported to storage sites.

Transport

Transport can happen in a number of ways. Pipelines are a common method for moving large volumes of CO₂ – particularly for industrial clusters of interconnected companies and suppliers, which enables them to reap decarbonisation benefits. Ships can be used to transport cross-border liquid CO₂, particularly when storage sites are located offshore, making CCS technology viable even in hard-to-reach locations.

Storage

Once the captured CO₂ arrives at the storage site, the final step involves injecting the captured CO₂ into the microscopic spaces in porous rocks, where one or more layers of impermeable rock, called cap rock, forms a seal to ensure it is securely trapped, offering permanent storage.

Measuring, monitoring and verification

Regular monitoring, both above and below ground, is implemented to ensure that the CO₂remains permanently and safely stored.

While CCS primarily focuses on capturing CO₂ from industrial facilities and power plants, Direct Air Capture (DAC) is an emerging technology that removes CO₂ directly from the atmosphere. DAC uses chemical processes to extract CO₂ from ambient air – making it particularly useful for addressing legacy emissions and carbon removal, which is why it is sometimes referred to as ‘negative emissions technology (NET)’.⁴The CO₂ captured through DAC is either permanently stored underground or utilised in industrial applications, such as the production of synthetic fuels.

As DAC technology advances and becomes more cost-effective, it is expected to play an increasing role alongside CCS in emissions reduction strategies.⁵

Driving CCS adoption through policies and demand

Despite its potential, CCS faces economic and regulatory hurdles. Government support is essential to create a conducive environment for investment and deployment of the technology – including through policy frameworks, financial incentives, and infrastructure development across the full value chain.

For example, carbon pricing mechanisms such as carbon taxes or cap-and-trade systems – which set a tax rate on greenhouse gas emissions or the carbon content of fossil fuels and allow companies to trade emission allowances to meet compliance targets – can make CCS more economically viable⁶. Emissions reduction mandates to reduce carbon footprint across certain industries can incentivise adoption, while streamlined permitting and legal frameworks can accelerate the approval process for CCS projects.

Elsewhere, direct subsidies and grants can help to lower upfront project costs, and tax credits and incentives – such as the US’ Section 45Q Tax Credit for Carbon Sequestration which provides financial support – while public-private partnerships can help to share risks and mobilise investment in large-scale projects.⁷

Ensuring secure and efficient CO₂ sequestration requires strategic storage site development, which can only materialise if appropriate investments in infrastructure and transport networks are made. As such, encouraging industrial clusters whereby multiple companies benefit from shared CCS facilities can have a positive impact, helping to improve efficiency and scalability.

Beyond government support, market-driven demand for CCS can further accelerate adoption. Early adoption of the technology by companies in hard-to-abate industries can give them an edge over competitors in carbon-conscious markets where consumers increasingly prioritise low-carbon products.

Greater CCS demand and deployment can also lead to further improvements around the technology – with knowledge-sharing across sectors helping to accelerate cost-efficiency and commercial viability, for example.

Shell Energy Transition Strategy 2024

Our energy transition update shows how we are delivering against our climate targets. As we focus on areas of competitive strength, we are investing $10-15 billion on low-carbon energy solutions between 2023 and the end of 2025. We are also investing in oil and gas production with lower emissions as we provide energy today while helping to build the low-carbon energy system of the future.

Read the Energy Transition Strategy 2024 publication in full

CCS in action

Though CCS is a proven technology, it is not yet widely deployed and available. However, concrete examples of where it has yielded real-world positive impact already exist, with some projects in operation for nearly 20 years. Furthermore, according to the Global CCS Institute, while there are around 50 million tonnes per annum (mpta) of CCS in operation today, there are around 300 mtpa of projects under consideration and many net-zero scenarios show the industry growing to more than 1,000 mtpa by the mid-2030s.⁸

Quest: How CCS can help decarbonise Shell’s own operations

Located near Edmonton, Canada, Quest

is a pioneering project designed to capture and store carbon emissions from Shell's Scotford Upgrader.⁹Initiated in 2008, the facility began operations in November 2015 and to date, the facility had captured over 9 million tonnes of CO₂.

Northern Lights: Delivering CO₂ transport and storage as a service

Northern Lights

is a CCS joint venture between Shell, Equinor and TotalEnergies, to develop the world’s first open-source CO₂transport and storage infrastructure, designed to transport captured CO₂ from industrial sites across Europe and permanently and safely store it 2,600 metres below the seabed in the Norwegian North Sea. In 2025, Northern Lights announced plans to expand the transport and storage capacity of the project from 1.5 million to at least 5 million tonnes of CO₂ per year.

CCS represents a pivotal asset in the global effort to reduce greenhouse gas emissions, particularly in hard-to-abate industries. As demand for low-carbon solutions continues to grow, businesses can harness the potential the technology holds.

By aligning policy frameworks, financial support and market incentives, CCS can become a cornerstone of global decarbonisation efforts, helping society in the race to net zero by 2050.

Date of publication: August, 2025

Carbon Capture and Storage (CCS)

CCS offers a way to reduce emissions, including from sectors that are slower-to-decarbonise. Learn more about this technology and how Shell is working to unlock its potential around the world.

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