On September 23rd, 2025, the Global CCS Institute and EPRI convened a side event at the 2025 New York Climate Week focused on “Decarbonizing the Power Sector with CCS: Meeting the Demands of AI Growth.” Many thanks to Latham & Watkins for graciously hosting over 200 of our members and guests in their Manhattan office.
Carbon Capture and Storage (CCS) remains an essential and proven solution for delivering decarbonized power at scale. As data centers drive the anticipated electricity demand, their reliance on firm power is non-negotiable and ideally low-carbon as well. Natural gas power plants equipped with CCS could play a pivotal role, ensuring the reliable low-carbon power needed for companies to meet their climate commitments.
Global Markets Show Momentum
CCS is transitioning from a policy concept to an operational, commercially bankable asset. In the ‘Global Market Developments and CCS’ panel, speakers highlighted several major global strides. Europe’s Northern Lights project achieved its first cross-border CO₂ injection, marking a physical milestone. The Jubail CCS Hub in Saudi Arabia, aiming to store up to equivalent annually by 2028 and backed by a consortium of global energy and technology firms, demonstrates growing confidence in the bankability of CCS.
At a high-level, the panel noted:
- Europe is policy-rich, with the EU Emissions Trading System (ETS) creating investable conditions, but still faces a cost gap in supporting projects getting to FID. The United States boasts one of the strongest financial incentive via the 45Q tax credit, which has been maintained under the recently signed ‘One Big Beautiful Bill Act’ (OBBBA) and is helping to drive domestic investments. However, dedicated geologic storage deployment is being constrained by Class VI well permitting speed.
- Asia, led by Japan, is pioneering cross-border CCS models, shipping CO₂ between nations, while China is rapidly scaling multi-megaton projects through state mandates and pipeline networks.
The AI Imperative: Speed, Cost, and Carbon
Hyperscale tech companies, the architects of the AI boom, are driving the most urgent new demand for low-carbon, firm power. During the Fireside Chat, discussions ranged from a host of topics including increased electricity consumption from U.S. data centers which are projected to climb from 1.5% to as much as 4% of national demand, forcing these companies to prioritize “speed, cost, and low ,” respectively.
CCS coupled with natural gas power plants is an ideal solution for their needs, offering both reliability and deep decarbonization (90-95% capture) potential. However, panelists stated that the primary challenge with CCS and natural gas power plants is a fundamental timing mismatch: the urgency of AI-driven power plant construction runs headlong into the multi-year regulatory and infrastructure development timelines of CCS. Developers discussed how capture components could be developed on a quicker timeline, modular and scalable designs. Yet, storage capacity must be ready first, or “no storage = no project.” Therefore, the CCS storage providers will need to have the storage resources characterized for safe and permanent geologic storage and secured legal rights to the subsurface pore space.
The Infrastructure Bottleneck and Policy Headwinds
In addition, supply chain challenges, including delays in turbines, transformers, and other large equipment, along with skilled labor shortages, could also create another bottleneck that may threaten progress to scaling CCS.
Some recommendations discussed include:
Streamlined permitting with open dialogue calling for public-private partnerships to increase EPA capacity; states applying and obtaining Class VI primacy could also help accelerate the permitting process.
Advocacy for financial stability for inflation-adjusted tax credits and long-term policy clarity to combat political uncertainty
Early planning for building new power plants, especially gas-fired turbines intended to meet AI demand with plans to be designed as “capture-ready” or capture-integrated from the outset.
In conclusion, the success of CCS hinges on breaking the infrastructure logjam. The energy transition is not an on/off switch; it’s a phased and collaborative journey. For the power sector to successfully meet the ‘Gigawatt Moment’ created by AI, collaboration across the entire CCS value chain, from capture, transport, and storage, must move to a coordinated, commercialized reality now. Natural gas with CCS will need to be part of the all-inclusive clean technology portfolio, which includes renewables, nuclear, and geothermal.
