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Sustainability

What is carbon capture and storage (CCS)? Here's what you need to know

A quick-guide to carbon capture and storage. Find out how CCS and BECCS work, their importance in decarbonising hard-to-abate industries and the current state of projects in the Nordic region.

Equinor's Northern Lights carbon capture and storage facility
On 26 September 2024, the Northern Lights facility in Øygarden, Norway, celebrated that it was finally ready to receive CO₂. Photo: Torstein Lund Eik / ©Equinor

Why are we talking about carbon capture and storage (CCS) and bioenergy with carbon capture and storage (BECCS) now?

The world has committed to ambitious climate goals through the Paris Agreement, aiming to limit global warming to well below 2°C, and preferably 1.5°C. To achieve this, countries, including all the Nordic nations, have set “net zero” targets, meaning that by 2050 (or sooner), any remaining greenhouse gas emissions must be balanced by removing an equivalent amount from the atmosphere.

This is where carbon capture and storage (CCS) and bioenergy with carbon capture and storage (BECCS) come in. These technologies are seen as essential for:

  • Decarbonising hard-to-abate sectors like cement, steel, chemicals and waste incineration.
     
  • Delivering “negative emissions” (removing CO₂ from the atmosphere) through carbon dioxide removal (CDR) technologies such as BECCS.
     
  • Supporting a future low-carbon economy where some emissions are unavoidable, but can be offset by permanent removals.

The Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) both highlight that large-scale deployment of CCS, BECCS and other CDR solutions is necessary to reach net zero and meet the Paris Agreement goals.

What are CCS and BECCS?

Carbon capture and storage (CCS): A set of technologies that capture carbon dioxide (CO₂) emissions from industrial sources (like cement plants, waste incinerators or power stations) and store the CO₂ deep underground so it doesn’t end up in the atmosphere.

Bioenergy with carbon capture and storage (BECCS): Here, the CO₂ comes from burning biomass (like wood chips or biowaste) for energy. Since the plants absorbed CO₂ while growing, capturing and storing these emissions actually removes CO₂ from the atmosphere, so-called “negative emissions.”

 

Why are CCS and BECCS important?

There are several reasons why CCS and BECCS are getting so much attention right now:

  • Net zero and the Paris Agreement: Countries and companies have committed to net zero emissions, in line with the Paris Agreement. This means all greenhouse gas emissions must be reduced as much as possible, and any remaining emissions must be balanced by removals.
     
  • Hard-to-abate sectors: Some industries, like cement, steel, waste incineration, and chemicals, are very difficult to decarbonise with electrification or other solutions. CCS is often the only realistic option.
     
  • Scope 3 targets and demand for offsetting: Many companies now have climate targets that include not just their own direct emissions (Scope 1 and 2), but also indirect emissions from their value chain (Scope 3). This creates strong demand for solutions, like BECCS and high-quality carbon credits, that can deliver “negative emissions” and offset those residual emissions that are hard to avoid.
     
  • Regulatory and market incentives: Carbon pricing, government support, and customer expectations are all driving investment in CCS and BECCS.

In short: CCS and BECCS are key tools for reaching net zero, meeting climate targets and staying competitive in a future low-carbon economy.

CCS and BECCS are key tools for reaching net zero, meeting climate targets and staying competitive in a future low-carbon economy.

How does the CCS/BECCS value chain work?

Think of it as a relay race with three main legs:

  • 1. Capture

    CO₂ is separated from flue gases at the source.

  • 2. Transport

    The CO₂ is compressed and moved (by truck, pipeline and/or ship) to a storage site.

  • 3. Storage

    The CO₂ is injected deep underground, usually in old oil/gas fields or saline aquifers.

For BECCS, the process starts with biomass as the fuel.

Monitoring: how do we know the CO₂ stays put?

All CCS and BECCS projects must have robust systems for monitoring, reporting and verification (MRV). This means tracking how much CO₂ is captured, transported and stored, and making sure it stays safely underground. MRV is also essential for projects that want to sell negative emissions or carbon credits, since buyers and regulators need proof that the climate benefit is real and permanent.

Who’s doing what in the Nordics? (with real examples and status in November 2025)

Norway

  • Heidelberg Materials Brevik: The world’s first full-scale CCS installation at a cement plant. As of autumn 2025, the plant is in the commissioning phase and expected to start regular CO₂ capture and shipment to the Northern Lights storage project soon.
     
  • Northern Lights: A joint venture offering CO₂ storage as a service, including for cross-border customers. Phase 1 is currently operational, with expansion plans (Phase 2) under development.
     
  • Hafslund Celcio: CCS at waste-to-energy plant in Oslo is under development as part of the Longship initiative. The project will achieve negative emissions from the biogenic waste fraction. The facility is expected to become operational in 2029.

Denmark

Sweden

Finland

  • Vantaa Energy: Planning CCS at a waste-to-energy plant, with CO₂ to be exported for storage in Norway or Denmark. The project is currently in the feasibility assessment and planning phase.

How are these projects financed?

For industrial CCS projects:

  • CCS is a cost, not a revenue stream. Companies do CCS to avoid carbon taxes, comply with regulations, or improve their environmental, social and governance (ESG) profile.
     
  • Support schemes (like investment grants or operational subsidies) help cover costs, but there’s no direct income from selling CO₂.

What about selling captured CO₂?

Today, selling CO₂ for “utilisation” (for example, to make e-fuels, chemicals, or building materials) is not a significant part of the business case for industrial CCS projects in the Nordics. The markets are small and immature. However, in the future, if demand for green CO₂ grows, such as for synthetic fuels or carbon-based products, industrial capture projects may be able to generate revenue by selling captured CO₂. For now, this is more of a potential upside than a reality.

For BECCS projects:

  • BECCS can generate revenue through multiple channels: selling “negative emissions” to governments via mechanisms such as Carbon Contracts for Difference (CCfD), entering pre-issuance offtake agreements with private companies or trading carbon credits in voluntary markets.
     
  • BUT: If the project receives state support (such as a CCfD in Denmark), the government typically retains the right to claim the negative emissions for its nationally determined contribution (NDC). Consequently, the project cannot sell credits for the same CO₂ removal, to avoid double counting of emissions reductions.

What are the main risks for banks and investors?

For banks and investors looking to finance carbon capture projects, here’s what keeps risk managers up at night:

  1. Policy and regulatory uncertainty: Will support schemes last? Will carbon prices stay high enough?
     
  2. Cross-chain risk: If one part of the value chain (capture, transport, storage) fails or under-perform, the whole project can be in trouble.
     
  3. Counterparty risk: Is the transport and storage provider reliable and financially solid?
     
  4. Technology and utilisation risk: Will the capture technology work as promised? Will the plant run enough hours to deliver the expected CO₂ volumes?
     
  5. Feedstock risk (for BECCS): Is there a secure, long-term supply of sustainable biomass?
     
  6. Economic lifetime: CCS is only viable as long as there are emissions to capture and it’s financially reasonable. If industry decarbonises faster than expected, or new technology emerges, the business case can evaporate.

Bottom line:
Financial institutions need to conduct comprehensive due diligence across the entire value chain, not just on the capture facility itself.

Questions bank advisers are likely to ask clients

  • Business model: Is the project based on cost savings, support or credit sales?
     
  • Regulatory landscape: How secure are the relevant policy and regulatory frameworks?
     
  • Infrastructure agreements: Are there long-term, binding contracts for CO₂ transport and storage?
     
  • Technological maturity: Is the technology proven at this scale?
     
  • Biomass security (for BECCS): Is the biomass supply sustainable and secured for the contract period?
     
  • Operational risk: What happens if the plant runs less than expected?
     
  • Emissions rights: Who owns the negative emissions or resulting carbon credits?

Key takeaway

If you’re considering financing carbon capture and storage (CCS) or bioenergy with carbon capture and storage (BECCS) today, make sure your due diligence covers the entire value chain, from capture to storage, including all contracts, counterparties and policy risks.

CCS & BECCS cheat sheet: Key terms explained

Aquifer:
A layer of water-bearing porous rock or sediment located underground. In CCS, aquifers can hold injected CO₂ because their porous structure allows the gas to move into the tiny spaces within the rock.

Bioenergy with carbon capture and storage (BECCS):
Combines bioenergy (burning biomass for energy) with carbon capture and storage (CCS), resulting in “negative emissions” (removal of CO₂ from the atmosphere).

Carbon capture and storage (CCS):
Technology for capturing carbon dioxide (CO₂) from industrial sources and storing it permanently underground.

Carbon contracts for difference (CCfD):
A government contract guaranteeing a fixed price per tonne of CO₂ captured and stored/removed, to support project economics.

Carbon credit:
A certificate representing one tonne of CO₂ removed from or not emitted into the atmosphere, which can be traded or sold to offset emissions elsewhere.

Carbon dioxide removal (CDR):
Any technology or process that removes CO₂ from the atmosphere, this includes both engineered solutions (like BECCS and direct air capture) and nature-based solutions (like afforestation, soil carbon storage or wetland restoration).

Capture:
The process of separating CO₂ from flue gas at the source (e.g. factory, power plant).

Compliance carbon market:
A regulated market where companies must buy or surrender carbon credits/allowances to comply with government-mandated emission limits (e.g. EU Emissions Trading System).

Counterparty risk:
The risk that a key partner (e.g. transport or storage provider) cannot deliver as agreed.

Cross-chain risk:
The risk that failure in one part of the CCS value chain (capture, transport, storage) affects the whole project.

Environmental, social and governance (ESG):
A framework for evaluating a company’s performance on environmental, social and ethical issues.

Feedstock (BECCS):
The biomass (e.g. wood chips, biowaste) used as fuel in BECCS projects.

Hard-to-abate sectors:
Industries where greenhouse gas emissions are deeply embedded in production processes and cannot be easily eliminated with current low-carbon technologies.

Monitoring, reporting and verification (MRV):
Systems and processes to track, document and prove how much CO₂ is captured, transported and stored, and that it stays underground.

Negative emissions:
When more CO₂ is removed from the atmosphere than is emitted.

Net zero:
A state where all greenhouse gas emissions are balanced by removals (e.g. via CCS, BECCS or other CDR).

National determined contribution (NDC):
A climate action plan submitted by each country under the Paris Agreement, outlining targets and measures to reduce greenhouse gas emissions and adapt to climate change. NDCs are updated every five years and reflect national ambitions toward global climate goals.

Paris Agreement:
Global climate agreement aiming to limit warming to well below 2°C, preferably 1.5°C.

Residual emissions:
Greenhouse gas emissions that remain after all technically and economically feasible reduction measures have been implemented. These must be balanced by removals (e.g. via BECCS or carbon credits) to achieve net zero.

Storage:
Injecting CO₂ deep underground (in saline aquifers or depleted oil/gas fields) for permanent storage.

Transport:
Moving captured CO₂ (by pipeline or ship) to a storage site.

Utilisation (carbon capture and utilisation, CCU):
Using captured CO₂ as a raw material (e.g. for e-fuels, chemicals, building materials) instead of storing it.

Voluntary carbon market:
A market where companies or individuals buy carbon credits to voluntarily offset their emissions, outside of regulatory requirements.

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