Carbon Capture and Storage—Hard-To-Pass Decision Gates

Summary Socio-economic criteria for climate projects were used in analyzing the value of the climate benefit of a reduction in carbon dioxide. These reports are optimistic, yet European carbon-capture-and-storage (CCS) demonstration plants are not implemented as expected. Little attention was devoted to profitability assessments on the basis of commercial considerations. Economic valuation of climate projects, seen from the perspective of the commercial companies that are to implement the projects, is the subject of this article. We examine key economic parameters of 27 oil and gas projects and compare them to a CCS project. We find that the CCS project ranks the lowest and is unlikely to be implemented by a private company. Our findings may explain why it is hard for oil companies to justify climate projects in their portfolios.