Aug 29, 2026
A growing number of Carbon Capture and Storage (CCS) projects are reaching 2026 with a different problem than outright cancellation: their timelines are moving further into the future. That distinction matters because a deferred project can still consume development capital, preserve future demand and remain strategically important, while giving investors more time to test whether its economics can work.
For chemical manufacturers, this creates an unusual market signal. CCS remains central to decarbonising emissions-intensive production, yet developers increasingly need stronger commercial structures before committing billions to capture equipment, transport networks and storage infrastructure.
The issue is therefore not simply whether carbon capture technology works. The bigger question is whether the entire CCS value chain can generate predictable returns that lenders, industrial sponsors and procurement teams can support.
The current CCS pipeline shows both progress and caution. The International Energy Agency reports that more than 30 CCUS projects reached final investment decisions over the previous two years, while investment in the sector exceeded $5 billion in 2025. At the same time, the IEA says much of the planned capacity has shifted toward later deployment dates because of permitting, construction and market uncertainties.
This creates a two-speed market. Projects with strong government support, established industrial partners and access to transport and storage infrastructure can continue moving forward, while projects exposed to weaker commercial signals may remain in development without reaching construction.
For investors, that makes the distinction between deferred and cancelled projects increasingly important. A delay can represent capital discipline rather than abandonment, particularly when developers believe policy support, carbon prices or low-carbon product premiums could improve later.
CCS has a structural financing challenge because captured carbon does not automatically create a valuable product. Developers must build a business model around avoided emissions, carbon pricing, government incentives, low-carbon product premiums or contracted CCS services.
The IEA identifies commercial viability as a central challenge because CO2 itself has limited intrinsic market value. Projects also have to coordinate capture facilities, pipelines or shipping, storage sites and long-term liability arrangements across multiple participants.
That creates several questions for financiers:
Who pays for the capture system? The industrial emitter may need to absorb a significant upfront investment before receiving any long-term benefit.
Who guarantees CO2 transport and storage capacity? Capture assets become harder to finance when downstream infrastructure remains uncertain.
Who carries long-term storage liability? Investors need clarity about responsibility for monitoring, leakage and post-closure obligations.
Where does the revenue come from? Carbon prices, tax incentives, contracts and low-carbon product premiums must provide enough visibility to justify investment.
When these answers remain unclear, delaying an FID can become financially rational.
Chemical plants often produce emissions through energy consumption and process chemistry. Facilities making ammonia, hydrogen, methanol and other carbon-intensive products can therefore represent attractive CCS opportunities, but the capture system must compete with other decarbonisation investments.
The economics become more difficult when chemical markets are weak. A producer facing pressure on margins may prefer to preserve liquidity rather than commit large amounts of capital to infrastructure that produces limited immediate commercial revenue.
This is particularly relevant to procurement teams. A delayed CCS project can postpone demand for compressors, solvents, membranes, catalysts, process equipment, construction materials and supporting chemicals.
It can also delay the expected premium for low-carbon products, affecting purchasing strategies throughout downstream supply chains.
Carbon pricing plays a critical role in CCS economics because a stronger carbon cost can improve the financial case for capturing emissions. But prices differ significantly across jurisdictions and can fluctuate over the life of a project.
Recent project developments demonstrate the problem. Heidelberg Materials delayed its Edmonton CCS project in Canada in August 2026, with lower-than-anticipated carbon prices weakening the business case for the investment. The project had targeted more than 1 million tonnes of annual CO2 capture.
The implication extends beyond cement. Chemical producers also need confidence that future carbon costs will remain sufficiently high to justify capture investments compared with alternative decarbonisation pathways.
A project that works at one carbon price may become difficult to finance if its revenue assumptions depend on a significantly higher future price.
One reason developers defer projects is that capture represents only one part of the investment equation. A functioning CCS chain requires dependable infrastructure from the point where CO2 leaves the industrial facility to its final storage location.
The IEA highlights the cross-chain risks created when capture, transport and storage projects depend on one another. A capture facility cannot operate commercially if transport capacity arrives late, while a storage project cannot generate expected revenue if contracted CO2 volumes fail to materialise.
This creates a coordination problem that traditional chemical procurement does not always face.
Key dependencies include:
Capture equipment: Absorption, compression and separation systems must deliver reliable performance at commercial scale.
CO2 conditioning: Captured gas needs suitable treatment and compression before transport.
Transport infrastructure: Pipelines, ships and terminals require coordinated development and investment.
Storage capacity: Geological storage must provide predictable injection capacity and long-term containment.
Contract structures: Each part of the chain needs commercially compatible agreements.
A weakness anywhere in this chain can delay the entire project.
The strongest CCS markets increasingly rely on government mechanisms that reduce specific project risks rather than simply providing broad political support.
The IEA says more than $15 billion in commercial debt has been raised for CCUS over the past two years, with financing concentrated in markets where governments reduced risks across capture, transport and storage. The United Kingdom accounted for around 85% of this financing during that period, supported by long-term contracts, cross-chain compensation mechanisms and government-backed risk arrangements.
This suggests an important shift in how policymakers approach CCS.
Instead of treating subsidies as a simple contribution toward construction costs, governments increasingly need to structure mechanisms that make future revenue more predictable.
Possible tools include:
Long-term contracts for carbon management services
Carbon contracts for difference
Tax credits
Government-backed infrastructure
Storage liability frameworks
Demand support for low-carbon industrial products
For investors, the quality of the risk-sharing structure can matter as much as the headline subsidy value.
Project deferrals can create both risks and opportunities for chemical traders and industrial suppliers.
A large CCS investment normally creates demand across multiple categories. Delayed construction can push those purchases into later years, changing inventory planning and sales forecasts for suppliers.
For procurement teams, the most important effects may include:
Delayed equipment demand: Capture projects require substantial quantities of industrial equipment and process components. A postponed FID can shift procurement schedules by years.
Slower demand for supporting chemicals: Carbon capture systems can require specialised solvents, treatment chemicals and other process inputs. Slower project deployment can delay new consumption patterns.
Longer transition periods: If CCS projects move more slowly, industrial producers may continue relying on conventional production routes for longer than originally expected.
Greater value for flexible suppliers: Traders capable of sourcing across multiple regions may benefit when project schedules become less predictable.
The market therefore needs to distinguish between permanent demand destruction and demand that has simply moved further down the project timeline.
The CCS market is not uniformly deteriorating. Some projects continue to advance while others face delays, creating a more selective investment environment.
The IEA recorded growth in operational and under-construction capture capacity between its 2025 and 2026 database updates. It also reported that storage capacity increased by around 25%, showing that infrastructure development continues even as some planned projects move toward later dates.
Europe provides a useful example of this divergence. The Porthos project in the Netherlands continues construction and is expected to store around 2.5 million tonnes of CO2 per year from 2027, despite earlier delays.
This reinforces the importance of looking beyond headline project announcements.
For chemical-sector investors and suppliers, a project at the announcement stage carries very different commercial implications from one with completed engineering, contracted storage, secured financing and a defined procurement schedule.
Procurement professionals should avoid treating every announced CCS project as an immediate source of future demand.
A better approach is to monitor project maturity and commercial readiness. Important indicators include:
FID status: Has the developer committed capital or simply announced an ambition?
Offtake agreements: Are customers committed to buying low-carbon products or CCS services?
Storage contracts: Is permanent storage secured with defined capacity?
Policy support: Does the project have access to stable incentives or carbon-price mechanisms?
Engineering progress: Has front-end engineering and design advanced to a meaningful stage?
Financing structure: Can the project demonstrate access to debt or committed sponsor capital?
Projects that score strongly across these areas are more likely to create near-term procurement opportunities.
Projects that remain dependent on several unresolved commercial conditions should instead form part of a longer-term pipeline forecast.
The bankability problem does not necessarily indicate that CCS is losing strategic importance. Instead, 2026 is exposing the difference between technological ambition and commercially financeable infrastructure.
The Sustainable Markets Initiative has identified a structural financing gap in CCS, particularly for independent capture developers that struggle to obtain late-stage capital and predictable revenue before FID. Its proposed solutions include dedicated pre-FID development capital, stronger demand aggregation and improved financing knowledge across the sector.
At the same time, European analysis points to a weakening project pipeline, with technical, economic and regulatory hurdles continuing to affect progress from announcement to operation.
This means 2027 and beyond may bring a smaller but more commercially mature CCS pipeline.
The projects that survive the current bankability test are likely to have clearer revenue structures, stronger infrastructure integration and better-defined responsibility across the carbon management chain.
The 2026 CCS market should not be read simply as a story of projects failing. It is increasingly a story of developers reassessing timing, financing structures and exposure to uncertain carbon economics.
For chemical traders, procurement managers and industrial buyers, the most useful signal is not the number of projects announced. It is the number progressing toward FID with financing, offtake, transport and storage arrangements aligned.
That distinction can improve purchasing forecasts and reduce the risk of building supply expectations around projects that remain commercially immature. As CCS moves toward a more disciplined investment phase, suppliers with flexible sourcing strategies and buyers with better visibility into project milestones will be better positioned to respond when deferred projects finally move forward.
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