Carbon capture and storage (CCS) faces an uncomfortable truth. It is stuck in a deployment paradox that threatens to derail climate ambitions. It thinks too big, when the answer may be to start small.
CCS needs to scale to become economically viable, but investors will not commit without proven commercial success. In order to scale, the industry must invest and learn how to execute on its big plans.
This catch-22 threatens to paralyse progress. Most proposed projects require multi-million tonne annual volumes to justify their economics, creating multi-billion stakes where failure means massive regret costs for all involved.
Perenco’s Poseidon project in the UK North Sea suggests there might be another way. Rather than betting everything on gigascale from day one, could CCS break its deadlock by starting smaller and proving the model works?
Why CCS can’t get started
The technology works, but it is expensive. Current amine-based capture systems can take CO2 from industrial emissions, but costs remain stubbornly high. Next-generation technologies – metal-organic frameworks (MOFs), solid sorbents, advanced amines – promise better economics, but are still largely unproven.
This creates an investment conundrum. If investors jump in now there is a risk of ending up with expensive technology and locking in permanently high costs. But if they wait for better tech, they miss the window for action.
Either way, capital providers want premium returns to compensate for the uncertainty.
And CCS requires large upfront investment, which is typically amortised over 15-year contracts. But with no fungible CCS market, capital providers want assurances that their investment will be protected for the full contract term.
This could take the form of insurance, guarantees from the development companies involved or government backstops. The implied cost of such guarantees can, in many cases, exceed the underlying operating cost of the project.
Most projects require multi-million tonne per annum volumes to make the numbers work. This means multi-billion dollar systems, where any setback risks creating large regret costs for emitters, governments, investors and society.
The UK government support for the CCS sector, initially via the Track 1 process, has helped enable the first wave.
But government cannot meet all the needs of growing the CCS industry.
A different approach
What if, instead of starting with a gigatonne approach, industry opened a road to scale up?
Perenco-operated Poseidon aims to do just this. The project can hold an estimated 1 billion tonnes.
But it should be able to reach final investment decision (FID) with a commitment as low as 0.5 million tonnes per annum. This is a fraction of what most CCS projects require to justify investments.
Poseidon has three points of difference.
It will repurpose existing gas infrastructure, to cut costs and timelines. The wells, pipelines and platforms are already in place, but will need some retrofitting to ready them for CO2.
Perenco has operated the asset, along with over 20 other Southern North Sea assets, for years. It has the knowledge and existing workforce to carry out the planned changes.
The team carried out injection tests early in 2025. They were able to show rates could exceed more than 1 million tonnes per annum. For an industry where much rests on laboratory exercises and scientific papers, a real-world demonstration is a notable advantage.
“Poseidon at Leman offers unique attributes, creating a slip road to a market‑led model,” said Pierre Giraud, CCS manager at Perenco.
The bigger picture
What makes Poseidon especially compelling is its ability to scale. By proving that a large, strategically located storage hub can begin modestly and grow rapidly, Poseidon creates a replicable model for CCS globally.
Rather than locking the industry into expensive, high-regret bets, Poseidon demonstrates it is possible to start smaller, to derisk quicker and to build towards the gigatonne-scale CCS capacity the world will ultimately need.
Poseidon is not just a solution for the UK and Europe’s immediate CCS challenges. It can also be a template for how the industry worldwide can break the deployment deadlock and move forward with confidence.
The benefits extend beyond reducing capex and opex, Fergus Marcroft of Carbon Catalyst, which is partnered with Perenco at Poseidon, explains
“Poseidon has the ability to reduce costs for all future [non-pipeline transport] NPT-based UK CCS storage projects by offering network resilience. This, in turn, reduces the level of financial guarantees required to reach FID. The cost of guarantees can exceed the operational cost of a project, so the potential savings are considerable.”.
The project entered pre-FEED in late 2025, with initial focus on CO2 delivered via ship. However, the implications extend far beyond one North Sea project. Poseidon can lead CO2 imports from the European Union. It is the closest UK storage site for emitters in Belgium, northern France and the Westphalia region of Germany.
The model suggests CCS deployment could follow a more conventional industrial scaling pattern. Start small, prove the economics, then scale as confidence builds.
In a sector desperate for commercial validation, the progress made on Poseidon in 2025 is a significant step forward on the road map to delivering a CCS industry at scale on a cost-effective basis.
Originally published by E-FWD’s Energy Voice: (https://www.energyvoice.com/renewables-energy-transition/591681/starting-small-poseidons-bid-to-crack-ccs-economics/)