Carbon Capture’s Next Test Lies Underground

Recent deals and proposed rules show carbon capture moving toward execution, even as capacity remains small and many agreements are still taking shape

23 Jan 2026

The effort to build a national network of carbon dioxide pipelines in the US is entering a more practical phase, as energy groups and developers focus on securing transport and storage alongside capture projects.

A key signal came in 2023 when ExxonMobil completed its acquisition of Denbury, gaining control of one of the country’s largest existing CO₂ pipeline systems. The network was originally developed to move carbon dioxide for enhanced oil recovery and underground storage. For ExxonMobil, the deal offered a way to bypass the lengthy permitting and construction process that has slowed many proposed pipelines.

Access to infrastructure is becoming central to project viability. In Texas, Net Power is advancing its Project Permian power plant with plans to integrate carbon capture technology supplied by Entropy. Beyond reducing emissions, the project is structured to ensure the captured CO₂ has a clear outlet. Occidental has been identified as a potential buyer of the carbon dioxide, as well as a portion of the plant’s power output, although such arrangements remain subject to further negotiation and definitive agreements.

Developers and investors increasingly see this kind of coordination as essential. Early carbon capture projects were often assessed on technical performance alone. Today, analysts say projects are judged on whether capture, pipeline transport and underground storage are planned as a single system. Those that demonstrate integration across the value chain are generally viewed as easier to finance.

Regulators are also paying closer attention. The Pipeline and Hazardous Materials Safety Administration has proposed tougher federal safety standards for CO₂ pipelines, though the rules have yet to be finalised. While stricter oversight could increase costs and extend timelines, industry participants argue that clearer standards may help build public confidence in new infrastructure.

Despite growing activity, the scale remains modest. Operational carbon capture capacity in the US accounts for only a small share of national emissions, and pipelines require large upfront investment and long development periods. Public opposition has also delayed or altered several proposed routes.

Even so, recent transactions and project structures suggest a shift in emphasis. For companies pursuing carbon capture and storage, progress is increasingly defined not by long-term pledges but by the ability to execute projects that link capture, transport and storage in practice.