February 2024 Capture Carbon, Capture Value: An Overview of CCS Business Models OIES Paper: CM08 Bassam Fattouh, Director, OIES Hasan Muslemani, Head of Carbon Management Research, OIES Raeid Jewad, Principal Advisor, GaffneyCline The contents of this paper are the author’s sole responsibility. They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its members. Copyright © 2024 Oxford Institute for Energy Studies (Registered Charity, No. 286084) This publication may be reproduced in part for educational or non-profit purposes without special permission from the copyright holder, provided acknowledgement of the source is made. No use of this publication may be made for resale or for any other commercial purpose whatsoever without prior permission in writing from the Oxford Institute for Energy Studies. ISBN 978-1-78467-228-7 i The contents of this paper are the authors’ sole responsibility. They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its Members. Contents Contents ................................................................................................................................................. ii Figures ................................................................................................................................................... ii Tables ..................................................................................................................................................... ii Acknowledgement ................................................................................................................................ ii Introduction ........................................................................................................................................... 1 1. Key risks involved with CCS ........................................................................................................ 1 2. Frameworks to support investment in CCS ................................................................................ 4 2.1 Supportive legal and regulatory framework ............................................................................ 4 2.2 Mechanisms that allow stacking of revenues .......................................................................... 5 2.3 Diverse approaches: Experiences from different countries .................................................... 9 3. CCS Business Models ................................................................................................................. 16 3.1 Overview of business model theory ...................................................................................... 16 3.2 CCS business models ........................................................................................................... 16 Conclusions ......................................................................................................................................... 23 Appendix: Case studies ..................................................................................................................... 24 Figures Figure 1: Levelized cost of CO2 avoided between CCS and unabated route across sectors ................ 2 Figure 2: Varying Degree of Government Involvement in CCS ............................................................ 10 Figure 3: CCS Value Chain, Ownership and Financing ........................................................................ 17 Figure 4: Full Chain Model Concept ..................................................................................................... 18 Figure 5: Partial Chain Model – Single Hub Concept .......................................................................... 20 Figure 6: Partial Chain Model – Offshore CO2 Transport Concept ....................................................... 21 Figure 7: Partial Chain Model – Free Market ........................................................................................ 22 Figure A1: CRC Business Model .......................................................................................................... 26 Tables Table 1: Summary of hurdles in the CCS Supply Chain ......................................................................... 4 Table 2: Government funding support mechanisms for CCS ................................................................. 6 Table 3: CCS Support Me