Reclaim Finance is not in favour of the development of CCUS in the power sector. While it will have a role to play in achieving carbon neutrality as part of a 1.5°C-aligned scenario, it should be reserved for specific industrial sectors with no alternative for reducing CO2 emissions. In the power sector, CCUS appears to be a waste of money and presents the serious risk of slowing down GHG emissions reduction efforts. Financial institutions should not include CCUS for power generation in their energy transition financial and capacity targets, or in their energy transition frameworks.

Existing CCUS facilities in the power sector have proven not to be up to the task of reaching the theoretical 90% capture rate, achieving rates well below and failing to deliver promised emissions mitigations. CCUS engagement also results in higher fossil fuel consumption and higher methane emissions to produce the same amount of power as non-retrofitted power plants. In existing cases, captured CO2 is used to extract even more oil. This seriously compromises the pertinence of considering this technology as a climate solution.

Moreover, implementing CCUS requires large investments that drastically increase both capital and operational expenditure. The much higher costs per kW and higher exposure to volatile gas markets would likely incite the valorisation of captured CO2 instead of its storage. This indefinite storage is also yet to be proven. For the end-use consumer, deployment of CCUS at large scale would likely make the electricity wholesale price higher.

Far from being a solution, CCUS for power generation is making the climate crisis worse. Given the urgency of the situation, we must act swiftly to achieve a rapid and just energy transition. This requires actively reducing our reliance on fossil fuels, not delaying their phase-out. Instead of financing unproven technological bets like CCUS, financial institutions should focus support towards sustainable energy sources, such as wind and solar, that are already commercially mature, competitive, and rapid to deploy.

Find out more about CCUS in power in the dedicated factsheet.