But environmental campaigners tend to be wary of CCS on the grounds industry can use it to justify the continued use of fossil fuels.
CCS transports CO2 from where it is emitted and stores it, usually in a geological site, to prevent its release into the atmosphere.
Although the technology has existed for decades, it has yet to be widely deployed because it has been uneconomic - until now.
This year, the cost of producing carbon, which was far too cheap to deter many big emitters, has leapt to record highs.
On the most established carbon market, the European Union's Emissions Trading System, pollution permits in July reached their highest yet at nearly 60 euros ($70.33) a tonne.
Many analysts say a European carbon price of around 100 euros is within reach by the end of this decade, tipping the balance in favour of CCS.
Another big economy, Canada, also faces a rise in carbon prices after the country's supreme court in March gave the go-ahead for an increase to C$170 ($135.67) a tonne by 2030, from C$30 now.
OPPORTUNITY FOR SOME
Most roadmaps on how to meet goals set under the Paris Climate agreement to limit a rise in global temperatures to below 1.5 degrees Celsius (2.7° Fahrenheit) require a vast scaling up of CCS.
For companies and countries that get it right, the opportunity is huge. The world would need to go from current capacity of capturing 40 million tonnes of CO2 a year to 7.6 billion tonnes a year in 2050 to realise the International Energy Agency’s net zero scenario.
Apart from the increased interest because of rising carbon prices, greater deployment of CCS would lower costs and help to make it profitable because of economies of scale.
"Part of the reason so many people are now talking about CCS is the movement in the carbon price and higher tax costs," said Syrie Crouch VP of CCS at Shell RDSa.L , which has a target to capture and store 25 million tonnes of CO2 a year by 2035.
Shell is involved in CCS projects in Europe, Canada and Australia.
IEA data finds the cost of capturing CO2, excluding transport and storage, ranges from $15 per tonne at a natural gas processing plant to over $300 a tonne at a direct air capture (DAC) plant, which sucks emissions out of the atmosphere and is the only negative-emission solution.
The cost variation depends on factors such as the concentration of CO2 in the gas being captured.
Transport and storage costs also vary depending on what infrastructure exists, how far the CO2 must be transported and the structure used for storage.
Total CCS costs are already starting to be manageable for some emitters, Nick Cooper, CEO of project developer Storegga, said.
Storegga is leading development of the Acorn CCS project in Scotland, which aims to use existing oil and gas infrastructure to store 5-10 million tonnes of CO2 a year by 2030. Its partners are Shell and oil and gas company Harbour Energy. HBR.L
The majority of existing and developing CCS projects are at power plants or natural gas processing sites, but experts say more projects are needed to put CCS filters on smokestacks for industries such as steel and cement.
Large industrials including HeidelbergCement, LafargeHolcim, ArcelorMittal and Nippon Steel are among those considering CCS to meet their climate targets.
"If you are an industry with high emissions, and you aren’t actively planning for how these emissions are going to be avoided or stored in the future, you are running the risk of stranding your assets, and that risk goes up the more that carbon prices go up," Mark Freshney, energy analyst at Credit Suisse, said.
Chemicals giant Ineos INEOSG.UL hopes to eventually store around 1 million tonnes of CO2 from its Scottish Grangemouth plant at the Acorn site and in July signed an MoU with Storegga.
"Had it not been for that movement (in carbon prices) we wouldn’t be having this conversation on CCS. It has definitely led to a sea change," Colin Pritchard, Energy Business Manager at Grangemouth, said.
Ineos is also developing the Greensands CCS project off the coast of Denmark that it hopes could eventually store up to 8 million tonnes of CO2 a year in depleted oil and gas fields.
The sudden eagerness, especially from oil companies that can use carbon dioxide to increase pressure in old fields to extract more fossil fuel - currently the most common use of CCS - leaves climate campaigners suspicious, even though they grasp the urgency of finding all possible solutions to controlling climate change.
“Putting carbon capture technology on greenhouse-gas emitting facilities enables those facilities to continue operating, effectively providing those emitters with a licence to pollute indefinitely,” a group of over 500 international, U.S., and Canadian organisations said in an open letter to their policymakers in July.
At the same time, some existing projects have struggled with technical problems.
Australia’s A$3.1 billion ($2.3 billion) Gorgon CCS project, a joint venture including Chevron, Shell and ExxonMobil , was designed to store 4 million tonnes a year of CO2 at a liquefied natural gas project.
Since starting injecting CO2 in August 2019, three years later than scheduled, it has injected a total of 5 million tonnes of CO2-equivalent.
“Like anything of this scale there are technical challenges to overcome,” Shell’s Crouch said. Lessons from the project would be shared with the industry and governments and help to progress future projects, she said.
In the longer term, supporters of the technology say it will play an essential role in removing CO2 from the atmosphere, rather than just capturing at source, through methods such as direct air capture or bioenergy, derived from renewable biomass, with carbon capture and storage (BECCs).
British power generator Drax is seeking to develop BECCs at its biomass units, which it said could make it the world’s first negative emissions power plant by 2027.
Drax CEO Will Gardiner told Reuters it would take the company an initial 2 billion pound ($2.8 billion) investment to build the plants capable of removing 8-9 million tonnes of CO2 a year, with the CCS costing around 100 per tonne.
"As carbon prices rise globally, and if we are going to achieve a 1.5 degree pathway, they will have to rise, this will be a very cost effective way of taking CO2 out of the atmosphere," he said. ($1 = 1.3618 Australian dollars) ($1 = 0.7203 pounds) ($1 = 0.8532 euros)
($1 = 1.2530 Canadian dollars)
Susanna Twidale and Shadia Nasralla
(Reporting By Susanna Twidale and Shadia Nasralla, additional reporting by Sonali Paul in Melbourne; Editing by Veronica Brown and Barbara Lewis) ((firstname.lastname@example.org; +44 207 5424753;))