Financing CCUS at Scale: How to Mobilise Private Capital

Why It Matters

Mobilising private capital through robust risk‑sharing and stable policy frameworks is essential for scaling CCUS, a technology pivotal to meeting global net‑zero targets and unlocking a new frontier in climate‑focused investment.

Key Takeaways

• CCUS capacity could double by decade's end if projects launch.
• Private debt financing exceeded $15 billion in past two years.
• Policy risk allocation crucial for attracting private investors to CCUS.
• Europe’s contracts‑for‑difference boost private capital in storage projects.
• Long‑term CO₂ liability still requires government back‑stop guarantees.

Summary

The International Energy Agency unveiled a new report, “Financing CCUS at Scale: How to Mobilise Private Capital,” highlighting the urgent need to bridge the financing gap that has kept carbon capture, utilization and storage (CCUS) projects from scaling. While the technology has been recognized for years, deployment has lagged, with only about 60 Mt of CO₂ captured annually. The report notes a potential turning point: more than 30 projects have reached final investment decisions in the last two years, meaning that if all under‑construction assets become operational, global CCUS capacity could nearly double by 2030.

Key findings show that private debt has surged, surpassing $15 billion in the past two years, driven by a handful of large project‑finance transactions. However, the sector remains highly risk‑sensitive—policy shifts, long‑term storage liability, and cross‑chain coordination all deter investors. Regional policy frameworks matter: North America leverages tax incentives and existing oil‑gas infrastructure; Europe is pioneering contracts‑for‑difference and long‑term de‑risking mechanisms; the UK secured a single $10 billion financing deal by bundling revenue guarantees and asset‑based contracts. These examples illustrate how clear risk‑allocation and stable revenue streams can unlock private capital.

The report stresses that without government back‑stops for tail‑risk and liability, private markets will stay constrained. Public funding has already catalysed early deals, but scaling requires systematic policy tools—stable carbon pricing, targeted tax credits, and long‑term contracts that distribute risk across capture, transport and storage actors. Partnerships, both private‑private and public‑private, emerge as the preferred delivery model, allowing each stakeholder to assume the risks they can best manage.

For investors and policymakers, the implication is clear: aligning business models, regulatory certainty, and financial structures is the single most effective lever to accelerate CCUS deployment. Doing so not only expands a critical climate‑mitigation technology but also creates a new asset class for sustainable finance, helping economies meet net‑zero commitments while generating long‑term economic returns.

Original Description

Learn more: https://www.iea.org/events/financing-ccus-at-scale-how-to-mobilise-private-capital

Carbon capture, utilisation and storage (CCUS) has been grabbing the recent attention of governments and financiers as both look to balance policy and investment goals. Recent financial investment decisions of major projects show promise in a sector that is gaining momentum, but its future success depends on viable business models and effective risk allocation across the value chain.

In this context, Financing CCUS at scale is the IEA’s latest report on what it takes to move CCUS projects from the drawing board to operation. The report investigates the distinctive economic and financial characteristics of CCUS projects, and the impact of business models on commercial viability. It examines how CCUS projects have been financed to date, including the roles of public support and finance structures.

Building on this analysis, the report identifies priorities for risk mitigation and allocation, drawing on evidence from recent financial investment decisions, project structures and the emerging operational track record of CCUS projects. Based on these insights, the report provides targeted recommendations for policymakers on how to design policy, regulatory and financial frameworks that can more effectively crowd in private capital.

The report draws on expert interviews from leading financial institutions. The launch event will feature important findings from the report and perspectives from practitioners in field.