US backtracking on climate action creates opportunity for Europe and UK on carbon dioxide removal

The United States is “squandering its competitive edge” in carbon dioxide removal and creating an opening for Europe and the UK, according to a new report published today (9 July 2025) by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science.

In ‘The innovation race on geological carbon removal: who is best placed to lead?’, the researchers argue that the dismantling by the United States Government of climate departments and the potential revocation of generous subsidies for carbon dioxide removal (CDR) “may spur companies to redirect investments” to other countries. 

The authors state that “while the US has been home to substantial patenting and deployment of relevant technologies to date, many European countries — such as France, Germany, the UK and the Netherlands — appear to be well specialised in geological CDR innovation.”

Alongside rapidly reducing new emissions, existing and future carbon dioxide will need to be removed from the atmosphere to meet global climate goals. The global market for CDR could be large, with various grey literature estimates suggesting that it will be worth over US$40 billion by 2030 and over US$300 billion by 2050.

In the report, the authors analysed data on global patenting between 2000 and 2020 to shed light on countries’ innovative strengths relevant for two CDR technologies: bioenergy with carbon capture and storage (BECCS) and direct air carbon capture and storage (DACCS). 

The report points out that countries that have transferable capabilities from historical efforts in oil and gas and other energy sectors are likely to have a head start in geological CDR innovation. The authors also found that oil and gas companies are responsible for substantial portions of innovation relevant for geological CDR in many countries, including China, India, Saudi Arabia, the UK and the US.  

The researchers found that the United States is by far the largest historical innovator in both bioenergy and carbon capture (BECC) and direct air carbon capture (DAC), followed by Japan, Germany and China in both instances (in a different order). But the researchers highlight that the most specialised innovators are a largely different set of countries, including many in Europe. According to their analysis, Denmark, Belgium, the Netherlands, Spain, France and the UK are among the top 10 most specialised innovators in BECC, while France, the UK, the Netherlands, and Germany are among the most specialised innovators in DAC.

The authors highlight that the UK has the potential to be a leading player with its abundant geological storage capacity, relatively low-carbon electricity supply and a transferable skills base from a long-standing oil and gas industry. The UK Government has recently launched its industrial strategy, which identifies carbon capture, usage and storage (CCUS), including geological CDR, among the frontier industries it will prioritise.

The authors state that UK’s performance in DAC “particularly stands out”. The authors found that the UK is the third most specialised innovator in DAC globally and its specialism in DAC exceeds its specialism in all other clean technologies analysed, except one (tidal stream energy). Analysed technologies that DAC comes ahead of include offshore wind, nuclear, hydrogen and clean cars.

The report is a partnership between the CO₂RE Hub at the Smith School of Enterprise and the Environment at the University of Oxford and the Grantham Research Institute, the Centre for Economic Performance (CEP), the Programme on Innovation and Diffusion (POID) and the Productive & Inclusive Net Zero (PRINZ) research project at the London School of Economics and Political Science.

Esin Serin, Policy Fellow at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, said:

“The United States has been the main country innovating on geological carbon removal for a long time, but the current policy uncertainty means it is squandering its competitive edge. With the United States deciding to take a back seat on climate action, other countries can step up and capitalise on the opportunity from geological carbon dioxide removal. The UK should seek to take the lead to benefit both its economy at home and the global effort against climate change. 

“As countries race to capture the market for carbon dioxide removal, predicted to be worth billions of pounds, it will be crucial to ensure investments in this field only complement, not replace, ambitious investment in near-term emissions reductions.” 

Siyu Feng, Postdoctoral Research Associate at the Smith School of Enterprise and the Environment at the University of Oxford, said:

“Our research shows that countries with longstanding oil and gas industries are uniquely positioned to take the lead on carbon dioxide removal, if public investment is prioritised now. 

“Well-targeted policy support for carbon removal can accelerate deployment in the right sectors and, if designed carefully, will complement rather than compromise broader climate goals.” 

*BECC and DAC cover the processes along BECCS and DACCS up until ‘Storage’, respectively. Patents relevant for the permanent storage of the captured CO₂ are looked at separately in the analysis.cc

ENDS

Notes to editors

• Geological CDR refers to the process of taking concentrated CO₂ streams chemically or biologically captured (either directly from the air, or from processes where biomass is converted into fuels or directly burned to generate energy) and injecting them into geological formations such as depleted oil and gas fields, saline aquifers or reactive mineral deposits underground. Various processes then act to sequester the CO₂ in these formations, including physical trapping by impermeable rocks, dissolving of the CO₂ in water, and eventual mineralisation. The predominant technologies are BECCS and DACCS.
• The analysis captures patents relevant for, but not necessarily explicitly about, geological CDR. That means patents originally developed in other fields which have functions transferable into geological CDR also feed into these insights.