Carbon Capture and Utilization (CCU) transforms captured carbon dioxide (CO2) into everyday products for consumers like fuels, chemicals, building materials, and foods. Using emissions to create valuable products can support Canada’s climate goals while driving innovation.
What is Carbon Capture and Utilization?
The CCU process begins with capturing CO2 from industries such as power, cement, oil and gas, and iron and steel. Unlike carbon capture and storage (CCS), which permanently stores CO2 underground in dedicated storage sites, CCU focuses on repurposing and using the CO2, much like recycling.
Canada’s Carbon Management Strategy recognizes that CO2 utilization has a role to play in supporting our climate goals. As outlined in this strategy, captured CO2 can either be used directly, or can be converted into useful products.
Depending on how the captured CO2 is ultimately used, the permanence of CO2 storage can vary. Not all utilization options can store CO2 permanently, but they still help cut emissions by enabling low-carbon products, like sustainable aviation fuel, which can offset traditional fossil fuel derived products.
Figure 1: Diagram of CO2 utilization processes1
Making Sense of CCU: A Guide to the Major Utilization Pathways
Across the various utilization pathways, several processes can be used to convert or incorporate captured CO2:
- Chemical conversion: CO2 is chemically altered into fuels (e.g., methanol), chemical products (e.g., fertilizer and plastics), or materials (e.g., nanomaterials).
- Biological conversion: Algae cells absorb CO2 and convert it into biochemical compounds (e.g., biofuels).
- Mineralization: CO2 chemically mineralizes with calcium to form calcium carbonates, which are a solid, rock-like material that stores the CO2 (e.g., concrete curing).
- Direct-use: CO2 is used directly, without undergoing any chemical or biological conversion (e.g., carbonated beverages, Enhanced Oil Recovery [EOR]).
Following direct use or conversion of CO2 into another product, the storage permanence varies:
- Permanent storage: Captured CO2 is either securely stored in mature oil reservoirs as the resource is produced (e.g., EOR), or the CO2 is mineralized in the concrete process where it remains stored for lifespan of the material (i.e., for decades or centuries).
- Temporary storage: Captured CO2 remains within a product temporarily and is eventually released back into the atmosphere, either upon first use or gradually over time (e.g., carbonated beverages, fertilizer, plastics and polymers, carbon fibre, etc.).
- Offsetting: Captured CO2 is converted into fuels (e.g., biofuels, methanol, etc.), replacing the need for conventional fossil fuels. Although these fuels release CO2 when burned, using them in place of conventional fossil fuels can still lower total emissions across the products lifecycle.
Current Applications of Carbon Utilization
In North America, the most common CCU method is CO2 Enhanced Oil Recovery (EOR). In this process, commercial-scale volumes of CO2 are injected into mature or depleted oil reservoirs to help produce more oil, with the injected CO2 remaining permanently stored in these reservoirs. To explore Canadian utilization projects, visit our CCUS in Canada map.
Most carbon utilization projects are still in the pilot or research and development (R&D) phase. Explore a variety of unique utilization projects across North America here.
Challenges and Opportunities
Carbon utilization offers promising pathways to reduce emissions, but large-scale implementation still faces several challenges:
- Low technological readiness: Many technologies are still in pilot or R&D stages. They need substantial advancement to reach the maturity required for commercial-scale deployment.
- Limited market for low-carbon products: Building demand for low-carbon products is essential. CCU projects require substantial capital investment, and the resulting products often carry a premium price compared to conventional alternatives.
- Incentive support: Currently, Canada only recognizes CO2 mineralization in concrete as eligible under the CCUS Investment Tax Credit (ITC). Broader recognition across all utilization pathways would encourage investment.
Despite these challenges, the opportunities for carbon utilization include:
- Revenue creation: CCU creates a revenue stream by transforming captured CO2 “waste” into a marketable commodity. Carbon capture projects can be multi-million to multi-billion dollar investments. Adding revenue to carbon capture projects improves the overall economics and can help projects reach a positive financial investment decision.
- Alternative to long-distance transportation: CCU can be a solution for capture projects located far from storage sites. If a utilization option can be located nearby the capture facility, it can reduce the project’s overall cost since transporting CO2 is expensive.
Carbon utilization is an innovative approach to reducing emissions, creating a revenue stream from marketable products. Although commercial deployment still faces hurdles, CCU remains a promising tool that can support the transition to a sustainable, low-carbon future.