The current wave of investment in carbon capture, utilisation and storage (CCUS) is larger and more geographically diverse than ever before. Momentum in private capital flowing into projects is reflected in the more than 30  final investment decisions (FIDs) that have been reached in the past 2 years alone, particularly in Europe and North America, and in key sectors including transport and storage, industry, and power. Investment has grown more than 15-fold since 2020, reaching over USD 5 billion in 2025. The pipeline of projects currently under construction suggests that after years of incremental capacity additions, operational capture capacity is set to nearly double by 2030 – and even more projects are at the planning stage.

These developments represent significant milestones for a sector in which projects are complex, difficult to finance and faced with unique risks. At its core, the challenge for CCUS is commercial viability. In contrast to other clean energy technologies, CCUS manages CO2 – a product with little intrinsic market value and limited standalone demand. This fundamental constraint is compounded by several distinctive risks. As new business models develop around hubs or CCUS services, project developers must co-ordinate capture facilities, transport infrastructure and storage sites across a connected value chain, creating cross-chain risks and complex contractual relationships. Long-term liability for stored CO₂ raises questions about how risks should be allocated over time. Although the operational track record is growing – with more than 9 000 km of CO2 pipelines and over 70 large-scale capture facilities in operation – projects remain relatively bespoke, and some risks, such as long-term monitoring and post-closure storage liability, have limited real-world precedents. All of these factors complicate risk assessment and financing.

Scaling CCUS will require financing approaches that can accommodate new project structures and a wider set of financiers. As CCUS moves into new business models, financing must adapt to a widening set of project sponsors with limited balance‑sheet capacity, and to hub‑based joint ventures that require robust risk‑allocation arrangements. Project finance is emerging as a solution to allow firms to preserve capital and distribute risks: more than USD 15 billion in commercial debt has been raised over the past 2 years, primarily through a handful of landmark non-recourse transactions in Europe and North America. Venture capital and growth equity have also supported technology and infrastructure developers, but project-level private equity investment remains limited and largely concentrated in North America. Unlocking large‑scale private capital will require widening the pool of participating investors and lenders, from commercial and development banks to insurers and institutional investors. Interviews conducted by the IEA with a dozen financial institutions indicate that appetite for CCUS is increasing among financiers, but participation remains concentrated because these structures depend on predictable revenue models and clear risk‑allocation frameworks across the value chain.

Targeted policy support and carefully designed risk-allocation frameworks have helped several projects to reach FIDs. Governments have earmarked more than USD 50 billion in public support for CCUS projects over the past 3 years, a record amount, and early signs of regional differentiation in financing approaches are beginning to emerge. In Europe, the shift towards long‑term revenue and risk‑sharing mechanisms rather than upfront grants is enabling a new phase of CCUS deployment, with multiple projects advancing to construction or operation, including several early project‑financed transactions. In North America, many risks are addressed commercially, but revenue support through tax credits and long-term agreements for carbon credits – combined with experience and infrastructure from the oil and gas sector – has enabled several projects to move forward, including CO₂ transport networks serving bioethanol plants in the United States. Elsewhere, private finance participation remains limited, with state‑backed companies integrating CCUS development into oil and gas value chains, notably in the Middle East and Asia Pacific.

Ensuring that the current momentum extends beyond a small number of projects will require policy support that supports viable business models. Around 90% of projects announced for 2035 have yet to reach FID, and a number of projects have already been cancelled or withdrawn from government tenders in the face of uncertain financing conditions. Projects targeting carbon dioxide removal and hydrogen production with CCUS, in particular, have struggled to secure offtake agreements, leading to project cancellations in many regions. In Denmark, 80% of industrial bidders pulled their proposals from consideration in a recent auction after cross-chain risks could not be managed.

Given the limits to government funding, support must become more targeted as the operational track record builds. Early-stage public funding remains essential, particularly where private investors are unwilling to assume first-of-a-kind risks. Over time, however, support mechanisms may evolve from direct grants and capital funding toward more focused risk-sharing instruments, such as long-term revenue guarantees or liability frameworks that remain on public balance sheets. This would enable funding to be targeted where it is most efficient. Risk allocation is also likely to shift as new actors enter the sector and operational experience grows. In some parts of the value chain and in certain jurisdictions, public involvement may remain necessary to underpin investment, while in others, private actors could increasingly assume operational and financial risks. Identifying which actors can step in, and what conditions are needed to enable them to do so, will be critical for scaling CCUS deployment in the years ahead.