For much of the past two decades, the loudest voices in the debate over carbon capture and storage (CCS) were often the critics: The equipment was too expensive or too prone to breaking down. Perhaps most damning was the accusation that the technology would extend the life of fossil fuels and delay cleaner, longer-term solutions.

Now the dynamics have shifted. CCS projects are growing at record rates. The technology continues to improve, economic incentives have aligned and the growth of AI and data centers has increased demand. The critics have not been mollified, but the momentum is with the industry — suggesting that any company with hard-to-abate emissions in its supply chain should engage with the arguments.

“It’s been like a snowball rolling down a hill in terms of corporate interest and investment in the sector,” said Jessie Stolark, executive director of the Carbon Capture Coalition, an industry group.

Global growth

CCS offers a seemingly simple decarbonization solution: Rather than replace coal power stations, steel plants and other facilities that rely on fossil fuels, why not capture and store the carbon dioxide that the infrastructure emits? In many cases, this involves pushing the gas over an absorbent material, compressing the captured CO2 and piping it to a geological reservoir for permanent storage.

The idea is simple, but during the first half of the 2010s high costs and technological setbacks led to a decline in the capacity of projects in development. Then the tide turned. A federal CCS tax credit, known as 45Q, was made more valuable in 2018 and more valuable still, as part of the Inflation Reduction Act, in 2022. The number of projects operational or in development globally grew from 392 to 628 between 2023 and 2024, according to the Carbon Capture Coalition. The U.S. is the leader, with more projects than the next four countries — the U.K., Canada, Norway and China — combined.

The Louisiana Clean Energy Complex, a hydrogen production facility under construction in Ascension Parish, illustrates the trend. Air Products, the industrial giant behind the project, says that 95 percent of the 5 million tons of CO2 emitted annually by the facility will be captured and stored, which the company claims makes it the world’s largest capture and permanent sequestration project. 

Air Products did not return a request for more information, but an analysis published this month by the capture coalition puts capture and storage costs at between $100 and $200 per ton of CO2. The exact price depends on the maturity of the technology used and the concentration of the gas in the waste stream, with higher concentration streams — which includes hydrogen facilities — tending to have lower costs.

More million-ton projects

Other huge projects are coming soon. In early April, a consortium of companies announced plans for an ammonia plant, also in Ascension Parish, that will capture and store more than 2 million tons of carbon dioxide annually. (The parish is part of “Cancer Alley,” a heavily industrialized area with elevated rates of the disease.) Two weeks later, ExxonMobil revealed plans to capture 2 million tons of CO2 from a natural gas power plant near Houston, Texas. 

The bullishness of CCS investors is also evident at the 140,000 square-foot factory opened in Burnaby, British Columbia earlier this month by Svante, a manufacturer of filters that capture carbon dioxide from industrial emissions. 

The factory can produce enough filters to capture 10 million tons of CO2 annually and its opening follows a $145 million investment round for the company.  A confluence of factors is driving the industry forward, said Claude Letourneau, Svante’s CEO, including tax credits and the green premium that some manufacturers can charge for low-carbon commodities, such as hydrogen. 

Smaller companies with innovative solutions are waiting in the wings, hoping to ride the industry’s momentum. Carbon Clean, a London-based startup, has designed a capture unit that fits into a shipping container, which it says is half the size of conventional systems. 

“The biggest challenge for implementing carbon capture is the real estate,” said Aniruddha Sharma, Carbon Clean’s CEO “Nobody has any space.” Following a successful test at a fertilizer plant in Abu Dhabi, the company is now working on further tests in Saudi Arabia and Canada.

Companies that have emissions from hard-to-abate sources — fertilizer, steel, cement — in their Scope 3 inventory stand to benefit from the reductions that CCS brings. And there are other reasons for sustainability professionals to track the technology, noted Sangeet Nepal, a technology specialist at the Carbon Capture Coalition.

The rising demand for uninterrupted supplies of low-carbon electricity can be met by gas power plants with CCS attached, for example. In December, ExxonMobil announced plans to build a gas and CCS facility in Texas to supply low-carbon electricity to nearby data centers.

CCS technology is also opening up new classes of carbon credits.

Svante is targeting its technology at pulp and paper facilities, some of which are using credit revenue to fund the installation of carbon capture. One recent project was funded by a purchase by Microsoft of credits covering 3.7 million tons of carbon dioxide over 12 years.

Criticisms linger

This progress has changed the narrative around CCS, but it has not altered the opinions of critics. They continue to question the calculations that underlie the claimed climate benefits of CCS, notably around the issue of where to draw boundaries when assessing the impact of the technology. 

CCS equipment requires energy, for instance. Most developers hope to use renewables, thus avoiding additional emissions. But there’s an opportunity cost in doing so because those renewables could be used to replace fossil power plants, argued Mark Jacobson, an energy systems expert at Stanford University. 

“You can’t just add things to the grid willy nilly,” said Jacobson. “There’s a queue. If you’re adding stuff and using it for carbon capture, you’re not replacing fossils on the grid.”

In one recent study, Jacobson and colleagues compared global decarbonization scenarios in which renewables were used to power either CCS or electrified versions of industrial facilities. After accounting for health costs due to air pollution from continued use of fossil fuels, along with other factors, they found that annual costs in the CCS scenario were at least nine times greater than the electrification alternative. Because CCS systems do not capture all the carbon dioxide that passes through them, atmospheric levels of the gas were also much higher.

Jacobson’s study is global in scope, but individual projects have also been criticized, including Air Products’ hydrogen facility in Louisiana. In a study published in March, researchers at the Institute for Energy Economics and Financial Analysis, a think tank, claimed that the benefits of the project rest on faulty assumptions about the amount of carbon that will be captured, leak rates of the methane feedstock and other factors. Once the assumptions are corrected, claims the institute, the project becomes a heavy emitter.

Just 10 years ago, debate of this nature played a role in slowing the deployment of CCS. But there is a sense among industry insiders that things have changed. The financial case for the technology has been rewritten. And while the Trump administration appears to have no interest in tackling climate change, backing from oil majors and GOP members in states that house capture projects means that CCS might be one decarbonization technology it can get behind.

“We are making the case,” said Stolark, “and we feel that carbon management squarely fits within this administration’s energy dominance framework.”

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The Greenhouse Gas Protocol is considering emissions accounting rule revisions that will make the process of claiming reductions from corporate renewable energy contracts more complicated, especially for companies with smaller electricity loads or highly distributed operations, according to those with knowledge of the discussions.

The GHG Protocol is the nonprofit that manages the guidelines that 97 percent of companies use to calculate and report on greenhouse gas emissions. Many of its rules are being overhauled after a major call for feedback two years ago, including the one covering Scope 2, emissions associated with energy purchases.

Many clean energy buyers agree that an update is overdue: the Scope 2 guidance was originally created in 2015. Those familiar with proposed changes in the current revision, however, worry that making them mandatory will make it tougher for corporate buyers to justify new deals.

Two influential trade groups, the Clean Energy Buyers Association (CEBA) and the American Council on Renewable Energy (ACORE), sent letters to the chair of the GHG Protocol’s standards board urging it not to make the revisions too strict.

“The Clean Energy Buyers Association is deeply concerned with the current direction of the Scope 2 guidance revision process,” the organization’s CEO, Rich Powell, said in a two-page letter, made public May 23. “If the process stays this course, we fear that many corporate clean energy buyers may pull back on investments in clean energy.”

ACORE’s six-page missive, dated April 25 (shared with Trellis but not made public), sounds a similar alarm: “At a time when clean energy companies face significant global and domestic headwinds, an overly restrictive approach for GHG reporting requirements that shrinks the number of voluntary purchasers could be a breaking point for many companies in the clean energy market.” 

Why the guidance matters

The current Scope 2 rule lets companies claim emissions reductions by buying enough renewable energy certificates from solar, wind and other zero-carbon sources to match their annual electricity load in the same broad market. For example, a company could claim credits from a wind farm in Nebraska or solar installation in Texas to reduce its U.S. emissions, regardless of where their operations are located. 

This framework has inspired hundreds of corporations to sign contracts that put more than 100 gigawatts of clean electricity on the U.S. grid since 2014 — 21.7 gigawatts in 2024 alone. 

Both supporters and critics of the methodology say an update is long overdue, and welcome changes that would give corporate claims about renewable electricity purchases more integrity.

“There is a lack of rigor in the current rules,” said Lee Taylor, CEO of REsurety, a firm that facilitates transactions. “The gaps between the dirtiest grids and the clean ones is getting bigger. The carbon intensity of grids is changing. That reality has been true for some time and it’s only growing.”

What’s on the table

The proposed changes as of April 30 are definitely more rigorous. 

One revision being considered would require big energy consumers to match actual electricity loads to renewable sources on an hourly basis; those using less than 5 gigawatt-hours per year could still report on a monthly or annual basis.

Another potential modification would narrow market boundaries, requiring companies to make their renewable energy purchases on the same regional grids that serve their physical locations.

Alongside the bigger changes, a subgroup is debating metrics to recognize corporate deals that are “consequential.” That might include, for example, providing a way to account for energy storage installations or to recognize contracts that add more renewables in places where grids are heavily dependent on fossil fuels, even if the buyer doesn’t have a physical presence there. 

Minutes of meetings by the technical working group developing the Scope 2 revisions are publicly available and include more details about changes being considered.

GHG Protocol declined to comment on the record, citing the ongoing nature of the process.

What buyers would like to see

Corporate renewable buyers, speaking on background, suggested that the future rules be tiered and some elements made optional. This would give sophisticated buyers a framework for making more specific emissions reduction claims without discouraging companies with smaller loads or that are new to corporate renewable procurement from participating, they said.

“I do think the next phase of procurement needs to be more meaningful than just an annual match and putting it wherever the economics make sense,” said Joey Lange, senior managing director for global renewable energy advisory services at consulting firm Trio. “But you can’t penalize the companies that played by the rules to begin with.”

If GHG Protocol makes the suggestions for more hourly matching and narrower market boundaries mandatory, a majority of CEBA’s 400-plus members would face “serious implementation challenges,” the organization said in its letter. “These accounting changes would fundamentally change the practical context of voluntary procurement.”

A separate survey of clean electricity practitioners conducted between November and February underscores CEBA’s position: 80 percent “lacked confidence” they would be able to comply with scenarios being considered.

“There are companies that feel stuck,” said Roger Ballentine, president of consulting firm Green Strategies, which conducted the survey. Uncertainty over both the rule change and broader macroeconomic conditions is paralyzing the market, he said: “If they want to execute a big deal, are they sure that deal will be okay? It really makes it very tough on procurement people to decide what they should do right now.”

Both CEBA and ACORE urged the GHG Protocol standards board to seek more input from corporate practitioners and renewables developers as the technical working group finalizes its draft. Some of their ideas:

• Solicit more feedback from corporate practitioners.
• Address concerns of renewable energy buyers before a draft is finalized for public consultation.
• Accelerate development of metrics for “consequential” deals, so they are aligned with the broader Scope 2 changes.
• Offer more clarity immediately about how existing contracts will be recognized, so companies don’t postpone new contract negotiations.
• Make some of the stricter proposed revisions optional.  

GHG Protocol is expected to publish a draft outlining high-level changes to Scope 2 in the fourth quarter of 2025. Revisions based on that feedback will be circulated in 2026, according to the GHG Protocol website. A final draft isn’t anticipated until 2027, and it’s likely that there will be a grace period before the changes take effect.

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Microsoft, which usually leaves buying construction materials to its contractors, has signed a long-term contract to buy low-carbon cement by startup Sublime Systems. It will use a new form of environmental credits related to that purchase to claim emissions reductions related to data center construction.

Under the deal, announced May 22, Microsoft will claim 622,500 metric tons of emissions reductions over a six-to-nine-year period against its Scope 3 footprint — which accounted for 96.5 percent of the technology company’s total footprint in its 2023 fiscal year. 

For perspective, Microsoft used 605,000 carbon credits that year to make its carbon neutral claim. It has also purchased credits for close to 20 million tons of carbon removal.

Microsoft plans to use Sublime’s cement in data centers, infrastructure and offices wherever geographically possible. Most cement is used within a few hundred miles of where it is produced. 

Microsoft’s footprint rose 31 percent between 2020 and 2024, largely because of data center expansion. Concrete and steel are carbon-intensive materials that together contribute 13 percent of global carbon dioxide emissions. With much ado being made about the huge energy appetite of data centers that fuel artificial intelligence, Amazon, Google and Microsoft are all seeking ways to address their construction-related emissions.  

Sublime uses an electrochemical process instead of a combustion-driven kiln to manufacture a replacement for ordinary portland cement. The company, spun out of research at the Massachusetts Institute of Technology, has raised $200 million. That includes funding from venture capital firms including The Engine, Lowercarbon Capital and Energy Impact Partners, along with an $87 million award by the Department of Energy in 2024 — funding that so far has not been affected by the Trump administration’s shifting priorities.

“We see a big opportunity to both domesticate and modernize U.S. cement making,” said Sublime CEO and Co-founder Leah Ellis. The U.S. imports more than 20 percent of its cement, and Sublime’s technology could change that locus. Two factories in the Northeast have closed in the past 18 months because of outdated technologies. 

Microsoft is the anchor customer for Sublime’s first commercial facility being built in Holyoke, Massachusetts, slated to begin deliveries in 2028. One of the biggest construction companies in the Northeast, Suffolk, announced a $3 million investment on May 21 to buy cement from the factory.

“Sublime’s mission is no less than fundamentally reshaping a cornerstone of the global built environment landscape, and we are proud to support them through our capital, our network and our commitment to building a more sustainable world,” said Jit Kee Chin, executive vice president and chief technology officer for Suffolk’s investment arm, Suffolk Technologies.

Source: Mikhail Glabets Photography

Credits for low-carbon cement and steel

Terms of the Microsoft-Sublime deal weren’t disclosed, but the company is positioning the contract as a way to provide early demand signals for the startup’s first factory, which will produce about 30,000 tons of cement annually. “Microsoft is a market maker,” Ellis said.  

Sublime’s first commercial deliveries are slated for 2028; the startup hopes to support a full-scale facility with a capacity of 1 million tons potentially by 2030, she said.

Microsoft is using a new category of environmental attribute certificate (EAC) for concrete and steel to justify its investment. The certificates are legal mechanisms companies use to calculate emissions reductions. One common type is renewable energy certificates, which many businesses use to offset emissions from purchased electricity. 

Environmental attribute certificates are used to spur investments in technologies that decarbonize hard-to-abate sectors including aviation, freight rail and maritime shipping. The new ones that will be issued under the Microsoft-Sublime deal are based on a methodology Microsoft developed with carbon management consulting firm Carbon Direct.

“While we prioritize deploying physical material whenever possible, this EAC approach helps both buyers and sellers overcome geographic, supply chain, cost and other barriers that make it challenging to introduce new technologies,” said Katie Ross, director of carbon reduction strategy and market development at Microsoft.

Goal: Scale availability of low-carbon cement

Microsoft’s purchases will be independently verified, although the details of how that will happen haven’t yet been determined, said A.J. Simon, director of industrial decarbonization at Carbon Direct. The certificates will be managed by a book and claim system, similar to what’s in place for sustainable aviation fuel.

The methodology published as a guide for other companies recommends that certificates be vetted using seven criteria, such as whether purchases will complement direct procurement of steel, cement and concrete. 

“The intention is to set high-integrity standards for commodity EACs that will improve confidence in this mechanism,” Simon said. “The thresholds for quality in the report reflect Microsoft’s decarbonization; other companies may decide to weight the criteria differently.”

The prepurchase commitments made possible by the EACs act as accelerants for startups, Ellis said. Despite uncertain macroeconomic conditions, Sublime isn’t making big adjustments, and it’s working closely with three of the world’s largest cement producers — Holcim, Amrize and CRH — to focus on the long term. “This isn’t an industry that pivots quickly,” Ellis said.

[Connect with more than 3,500 professionals decarbonizing and future-proofing their organizations and supply chains through climate technologies at VERGE, Oct. 28-30, San Jose.]

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Monetizing reforestation and other nature-based carbon removal projects is hampered by the difficulty of verifying outcomes such as soil carbon absorption across vast swaths of land and over multiple years. “Accountability is vital for the success of nature-based solutions,” states the Nature-based Solutions Initiative.

Now, AI’s firepower as a problem solver for a host of business challenges because of its ability to analyze — and act on — large amounts of data is being harnessed to provide an answer.

Canadian startup veritree is applying AI to nature-based solutions and carbon credits. Founded in 2022 as a spinoff from apparel company tentree, veritree provides an AI- and blockchain-enabled platform that connects businesses to about 50 nature-based projects in North America and Africa that use geo-sensors, computer vision cameras, satellites and on-the-ground monitoring to track changes. 

The sensors and monitors feed data into the veritree AI platform, which then reports progress on such metrics as carbon sequestration and species replenishment.

Businesses using veritree’s solution for AI-verified restoration projects include Samsung, ASML, Hopper, Sunrun and GreenFi in a list that has grown to 300 companies in three years. As of mid-May, those businesses have connected with reforestation projects to plant 100 million trees, according to the company.

Veritree closed a $6.5 million Series A funding round last week led by Pender Ventures and plans to use the capital to roll out projects in Latin America and integrate more auditing technologies into its platform.

“They come to us because their investors want to see progress audited and verified,” said Derrick Emsley, CEO and co-founder of veritree. “Confidence is one of the critical aspects that’s missing in this space right now, particularly in nature-based projects. Our platform is a utility for making sure that the projects that need to be funded have high-quality outcomes.”

The veritree platform “brings accountability to a space that’s long needed it,” said Pender Ventures Partner Isaac Souweine, in a statement as veritree announced its Series A round.

Mangroves in Madagascar

Ever since COP 27 in Egypt in 2022, nature-based solutions have been held up as essential to the climate struggle: reaching Paris goals requires not only reducing emissions but removing carbon already in the atmosphere. Moreover, widespread drought and biodiversity loss have led to a society-wide wake-up call about the need to protect nature.  

Some of veritree’s customers, such as GreenFi and Hopper, have built brands around restoring nature. Others have climate goals embedded in strategy, such as ASML, the photolithography chip company, or Samsung, its first customer, which turned to veritree for a carbon sequestration project that replanted 2 million mangroves in Madagascar. Veritree has been named by Deloitte, Forbes and Fast Company as a tech company to watch.

Other companies are also turning to AI technologies for similar purposes: Cultivo gathers data from geo-sensors, satellites and ground-monitoring devices to track progress on nature-based carbon credits, which it lists on the Verra registry of voluntary carbon credits. Blue Sky Analytics offers data-collecting satellites with remote sensing technology to monitor nature-based projects. 

Still, the market for nature-based carbon credits is much smaller than the need. According to the U.N. Global Compact and the Intergovernmental Panel on Climate Change, nature-based solutions could provide about a third of the reductions in greenhouse gas emissions needed to reach 2030 Paris goals. Yet, they receive less than 3 percent of global climate funding, said the Boston Consulting Group. A great deal of skepticism persists about voluntary carbon markets because of a lack of confidence in the outcomes. Thus the need for verifiable impact. 

AI capital flows elsewhere

To date, AI’s entry into the sustainability world has mostly been in energy optimization. 

Certain sustainability problems are such costly bottlenecks that investors know there’s a bankable business case for them. The years-long process of integrating renewable energy projects onto electric grids and optimizing grid efficiency are two such problems. This spring, National Grid Partners announced a $100 million investment in AI startups focused on electric grid efficiency, including AiDASH, Exodigo, Luminance, Sensat and Urbint. Last fall, KKR and Energy Capital Partners announced plans to invest $50 billion in renewable power generation to accelerate AI growth.

Another driver of applying AI to energy optimization is that AI’s huge energy demand is influencing infrastructure decisions, a case of “the tail wagging the dog,” Gupta said in an interview. AI proponents who care about climate want to streamline energy use while investing in AI.

About 2,600 gigawatts of renewable energy is waiting to be connected to U.S. electricity grids, an amount that’s double the existing grid capacity, Ajay Gupta, founder of venture capital firm CLAI vc and a fellow at Stanford University’s Distinguished Careers Institute, noted during San Francisco Climate Week. He listed Rhizome Data and Tapestry at Google X as AI startups trying to address bottlenecks and grid resiliency.

Veritree’s work fits the bill, said Souweine. “Veritree is solving one of climate-tech’s biggest blind spots — trust in nature-based solutions.”  

[Join a vibrant community of leaders and innovators driving cutting-edge tools, business strategies, and partnerships to protect and regenerate nature at Bloom, Oct. 28-30, San Jose.]

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