Determinants of Carbon Capture and Utilization ( CCU ) Deployment: Evidence From Leading CCU Economies

ABSTRACT This study investigates the determinants of carbon capture and utilization (CCU) deployment and expansion across high‐emission sectors, with a focus on four central determinants of national CCU activity over 2000 to 2024 by employing a two‐part (hurdle) panel model with a control‐function instrumental variables structure that serves as the primary analytical framework, complemented by Poisson pseudo‐maximum likelihood (PPML) model and fixed‐effect 2‐step least squares (FE‐2SLS) model for robustness. The results show that carbon‐intensive electricity systems consistently promote CCU deployment across all specifications. Furthermore, oil production strongly increases both the probability and intensity of CCU deployment, while natural‐gas production tends to discourage CCU participation. Clean‐energy R&D investment does not stimulate CCU activity and is frequently associated with lower deployment. Evidence for moderating effects of renewable energy on the emissions‐CCU relationship is mixed, but indicates that renewable expansion can strengthen the link between industrial emissions and CCU intensity in some specifications. In sum, the results highlight the importance of energy‐system characteristics, hydrocarbon sector structure, and technology‐allocation choices in shaping the global deployment of CCU. The findings will help clarify why CCU growth has been heterogeneous worldwide and point to areas where policy intervention may be most effective.