Carbon capture and storage—capturing CO2 from industrial processes and storing it permanently underground—operates at commercial scale in several Australian locations. After decades as a theoretical solution, CCS is now reality. The results are instructive: the technology works technically but faces economic challenges and delivers more modest climate benefits than advocates promised.

Operating CCS Projects

The Gorgon LNG facility in Western Australia operates Australia’s largest CCS project, designed to capture about 4 million tonnes of CO2 annually from gas processing and inject it into deep sandstone formations. The Chevron-operated project commenced injection in 2019 after construction delays and cost overruns.

Performance has disappointed. The facility has captured substantially less CO2 than designed capacity due to technical issues with compression equipment and reservoir behaviour that differed from predictions. By 2025, Gorgon had captured about 10 million tonnes cumulatively—well behind the 15-20 million tonnes anticipated by this point.

Other projects include the CO2CRC’s Otway Project in Victoria—a research demonstration facility that successfully stored 80,000 tonnes—and CTSCo’s facility at Santos’s Moomba gas fields in South Australia, which began operations in 2024.

Technical Performance Realities

CCS involves capturing CO2 from industrial exhaust streams, compressing it to liquid, transporting it to injection sites, and pumping it into suitable geological formations where it should remain permanently. Each step presents technical challenges.

Capture technologies work but consume substantial energy. Separating CO2 from other gases requires chemical processes or filtration that demand heat and electricity. This “parasitic load” reduces the net energy output from facilities by 15-25%, increasing per-unit energy costs and, ironically, increasing emissions from generating the additional energy needed for capture.

Geological storage requires appropriate subsurface formations—porous rocks with impermeable cap rocks preventing upward migration. Australia has suitable geology in sedimentary basins, but characterising reservoirs accurately enough to predict injection capacity and ensure permanent containment is difficult. Gorgon’s underperformance partly reflects reservoir complexity that detailed pre-project investigation didn’t fully characterise.

Monitoring and Verification

Proving that stored CO2 stays underground requires comprehensive monitoring. Injection sites use seismic surveys, pressure monitoring, and atmospheric CO2 measurements to detect potential leakage. Research groups at Curtin University and CSIRO have developed monitoring protocols and technologies for Australian conditions.

So far, stored CO2 appears to be staying put. No significant leakage has been detected at operating sites. This is reassuring but doesn’t prove permanent containment—CO2 could potentially migrate slowly over decades or centuries through pathways not captured by current monitoring.

Long-term stewardship remains a policy question. Industrial operators are responsible for monitoring while facilities operate, but what happens after projects close? Governments ultimately bear responsibility for ensuring permanent containment across timeframes extending centuries. Frameworks for this stewardship exist but haven’t been tested at scale.

Economic Challenges

CCS is expensive. Capturing, transporting, and injecting CO2 costs $100-200 per tonne in Australian projects—substantially higher than carbon prices needed to meet climate targets. Without subsidies or regulatory requirements, CCS isn’t commercially attractive for most emissions sources.

Government funding supported initial projects through grants, tax incentives, and preferential treatment in regulatory processes. Industry participation was conditional on this support. As subsidies phase down, whether operators maintain CCS at full capacity or find ways to minimize operations remains to be seen.

Falling renewable energy costs complicate CCS economics. For power generation, renewable energy plus storage now costs less than fossil generation with CCS in most locations. This makes CCS for electricity largely obsolete. Industrial processes that inherently produce CO2—cement, steel, chemicals—represent more plausible CCS applications, but economics remain challenging.

Climate Impact Assessment

Gorgon’s CCS captures emissions from gas processing—CO2 that would otherwise be vented to atmosphere. This is valuable but represents a small fraction of emissions from burning the gas at its final destination. The liquefied natural gas exported from Gorgon generates roughly 100 million tonnes of CO2 annually when combusted, twenty-five times more than the facility’s designed capture rate.

This doesn’t make captured CO2 worthless—preventing 4 million tonnes of annual emissions is meaningful—but context matters. CCS enables continued fossil fuel production rather than necessarily reducing net emissions. Whether this represents climate progress depends on whether gas displaces higher-emission fuels or simply increases total energy consumption.

Some analysts argue CCS for fossil fuel production is counterproductive, enabling continued reliance on fossil energy when the real solution is transitioning to renewables. Industry argues that gas with CCS is lower-carbon than alternatives and that CCS reduces emissions during the necessary transition period. Both perspectives have merit; the debate reflects different assumptions about transition pathways.

Research Advancing Technology

Australian research institutions are investigating improvements to CCS technology. The University of Melbourne’s engineering faculty is developing better capture solvents with lower energy requirements. Monash University researchers are investigating direct air capture—removing CO2 from atmosphere rather than concentrated industrial sources.

Direct air capture is orders of magnitude more expensive than industrial CCS because atmospheric CO2 is much more dilute. Current costs exceed $500 per tonne. But if costs decline substantially, direct air capture could address emissions from diffuse sources like transportation and agriculture where point-source capture isn’t feasible.

Mineral carbonation—reacting captured CO2 with minerals to form stable carbonates—offers permanent storage without geological uncertainty. CSIRO researchers have demonstrated the chemistry works but scaling to industrial volumes faces challenges. Suitable minerals must be mined, processed, and transported, which consumes energy and creates its own emissions.

Application Limits

CCS isn’t suitable for all emissions sources. It requires concentrated CO2 streams from large facilities. Distributed emissions from vehicles, buildings, and agriculture can’t be captured practically. Even among industrial sources, CCS economics only work for large facilities where economies of scale offset high capital costs.

This limits CCS’s total climate contribution. Even universal application to suitable sources would address perhaps 15-20% of Australia’s emissions. CCS is a tool for specific applications, not a comprehensive climate solution. Presenting it as such creates false impressions that CCS can substitute for broader emissions reductions.

Industrial sectors with inherent process emissions—cement production, for example, generates CO2 from limestone decomposition, not just fuel combustion—represent priority applications where alternatives to CCS are limited. Using limited climate policy resources to support CCS for these hard-to-abate sectors makes more sense than subsidising CCS for fossil fuel production that could be replaced by renewables.

Regulatory and Liability Frameworks

CCS requires clear regulatory frameworks addressing liability for potential leakage, long-term stewardship responsibilities, and interaction with other subsurface uses. Australian states have established frameworks but details vary, creating complexity for projects spanning multiple jurisdictions.

Offshore CCS in Commonwealth waters requires separate approvals. The regulatory fragmentation occasionally creates conflicts or gaps where no agency has clear authority. Streamlining these processes would reduce project costs and uncertainty but requires coordination between state and federal governments with different priorities.

Public liability is particularly thorny. If stored CO2 leaks decades after injection stops, who bears responsibility? Requiring companies to maintain financial assurance indefinitely is impractical. Governments accepting liability creates taxpayer risk. Limiting liability might leave damages uncompensated. No perfect solution exists; policy frameworks attempt reasonable compromises.

International Context

Australia’s CCS deployment is modest compared to global leaders like Norway and the United States. Norwegian experience with offshore storage provides valuable lessons for Australian offshore projects. US tax credits for CCS have stimulated substantial deployment, demonstrating that policy support can drive adoption despite unfavourable economics.

Some nations have abandoned or severely curtailed CCS development, judging that renewable energy provides better climate value per dollar invested. Others view CCS as essential for specific industrial applications regardless of economics. Australia’s position between these extremes reflects divided views among policymakers about CCS’s appropriate role.

Future Trajectory

CCS deployment in Australia will likely expand modestly in industrial applications where process emissions make alternatives difficult. Large-scale deployment for power generation seems unlikely given renewable energy economics. Continued operation of existing facilities depends on policy settings and operator commitments.

Research will continue improving capture efficiency and reducing costs, but transformative breakthroughs that make CCS economically competitive without subsidies are unlikely. The technology is mature; further development will bring incremental improvements rather than fundamental changes.

CCS will remain a niche climate tool rather than the comprehensive solution some advocates promoted. That’s probably appropriate—using CCS where it makes sense technically and economically while pursuing cheaper emissions reductions elsewhere represents rational climate policy. The inflated expectations that surrounded CCS a decade ago have given way to more realistic assessment of both capabilities and limitations.