A strategic bet on carbon capture in the face of surging energy demands

The world is rapidly recognising the emerging role of carbon capture and storage (CCS) in the race to decarbonise energy supplies. Advocates already emphasise CCS as a key mitigating solution in the transition to a low-carbon future, especially as power producers accommodate continued rising demand while also pursuing emissions reductions.

In February, the International Energy Agency (IEA) forecast global electricity consumption to rise at its fastest pace in recent years – nearly 4% annually through 2027 – as power-hungry segments like data centres and air-conditioning expand, and developing nations industrialise.¹

Why does carbon capture matter?

Leaders in boardrooms in nearly every segment across the energy production spectrum are taking note, including fossil fuel-fed power producers, LNG exporters, hydrogen and derivatives producers, downstream oil and gas firms and gas refineries and petrochemical businesses. In the U.S. electric power sector alone, Energy Information Administration (EIA) figures offer a compelling case for effective, technology-driven mechanisms, such as CCS. In 2023, the sector accounted for 33% of total U.S. primary energy consumption - and about 30% of total U.S. energy-related CO2 emissions. Specifically, in electric power production, natural gas contributed 50% and coal 49%, of CO2 emissions.²

Carbon capture as an industry solution

Measured against the Paris Agreement to limit a global temperature rise to 1.5°C, impactful emissions reduction solutions are critical across the energy ecosystem.

CO₂ traps heat close to the ground when released and can remain for hundreds of years. Industrial facilities, including power stations, produce CO₂ when burning fossil fuels.

CCS equipment helps to change that paradigm by separating CO₂ before it exits the smokestack. From there, it can be compressed and shipped – usually via pipeline – to long-term, deep underground storage locations, such as defunct coal seams.

Whether through retrofitting or engineering into new facility construction, this route to CO₂ reduction can offer existing and emerging infrastructure opportunities to contain emissions, while energy producers embrace the likes of lower-carbon LNG and scale to meet future demand with renewables such as hydrogen.

Both industry, prosumers and governments are paying attention – and collaborating as they create more effective pathways toward net-zero.

Findings from 2024’s Global Status of CCS report revealed significant year-on-year CCS momentum worldwide with strong project growth across all stages of development. It said global CO2 capture capacity is on track to double to more than 100 million tons per year (Mtpa) of CO2, once facilities currently under construction commence operation.³

The global CCS landscape

According to the Global CCS Institute’s Global CCS Institute’s Global Status of CCS 2024 report⁴, there are 50 CCS facilities operating globally with more than 628 facilities in the development pipeline across sectors including chemicals, ethanol, ammonia/fertiliser, natural gas/LNG, oil refining, gas and coal power generation, and heat, waste-to-energy, plus hard-to-abate industries such as cement/concrete, iron and steel.

The efficacy of CCS can go further and can create a pathway to net-negative emissions; for example, when linked with bioenergy - which uses organic matter from plants or animals to produce power - and hydrogen production derived via biomass.

CCS can, in short, be a potent bridging partner as grids are modernised to be more energy efficient and reliable, by enabling the integration of variable renewable energy sources, managing peak demand and decarbonising existing fossil fuel power plants.

Potential implications for businesses that fail to decarbonise

Beyond climate motivation, pressure on power regenerators and other energy businesses to decarbonise can surface at various levels - each with potential implications including cost and reputation.

Emissions regulations can bring stiff penalties for non-compliance, hiking operational costs. Additionally, customers and investors may demand it. As with most technologies, CCS faces critics and challenges.

Broader adoption can promote accessibility and yield implementation savings. Growing investment can drive innovations which squeeze price and encourage scalability, so CCS can fulfil its potential in net-zero energy strategies.

Making carbon capture accessible and scalable

Governments recognise incentives are required to make CCS economically viable for industries. Among them, the U.S.’ 45Q tax credit was recently reaffirmed at $85/ton for point-source capture⁵, and the UK government’s $21.7 billion funding package over 25 years supports CCS clusters.⁶ Australia was recently offering grants of up to A$25m for pilot/pre-commercial projects via its Carbon Capture, Use and Storage Development Fund, beside tax breaks.⁷

As a technology leader in both the CCS and energy space and backed by over a century of innovation solving challenges across the energy production network and numerous other industries, Honeywell brings deep expertise to carbon capture. With advanced technologies across the energy sector, customers can tailor solutions to their specific needs – providing support for Honeywell’s forecasted cumulative impact of mitigating approximately 320 million metric tons of CO₂e between 2023 and 2030.⁸

To learn how Honeywell can be your CCS partner, visit: https://www.honeywell.com/us/en/solutions/energy-transition/energy-solutions

References:

• International Energy Agency, “Growth in global electricity demand is set to accelerate in the coming years as power-hungry sectors expand,” Published, July 24, 2024. (Accessed September 09 & 10, 2025)
• U.S. Energy Information Administration, “Where greenhouse gases come from”, Published, June 24, 2024 (Accessed September 09 & 10, 2025)
• Global CCS Institute, “Global Status Report”, Published, November 06, 2024 (Accessed September 09 & 10, 2025)
• Global CCS Institute, “U.S. preserves and increases 45Q credit in One Big Beautiful Bill Act,” Published, July 08, 2025 (Accessed September 09 & 10, 2025)
• UK Government, “Hydrogen and CCUS,” Department for Business and Trade, Published, July 17, 2025 (Accessed September 09 & 10, 2025)
• Australian Government, "Funding for carbon capture, use and storage pilot projects or pre-commercial projects aimed at reducing emissions," 
• Honeywell, Investor Presentation (SEC Filing), Published, February 8, 2024, (Accessed September 09 & 10, 2025)