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A system dynamics-based comprehensive investment benefit and carbon reduction evaluation for CCUS-EOR projects

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  • Sun, Xiaorong
  • Zhao, Xiangxiang
  • Gu, Lichen
  • Jin, Chenhao
  • Pan, Xueping
  • Jang, Shinae

Abstract

The Carbon Capture, Utilization, and Storage (CCUS) with Enhanced Oil Recovery (EOR) is one of the most promising technologies for reducing carbon emissions due to its substantial potential for environmental benefits. However, the large-scale development of CCUS-EOR projects faces challenges mainly from imbalanced investment returns. To address the difficulties, this paper develops a novel integrated CCUS-EOR business model and conducts comprehensive investment benefit assessment based on the system dynamics approach. It selects typical cases for comprehensive benefit evaluation and establishes various scenarios to analyse and assess long-term impacts of different benefit enhancement strategies, considering both enterprise and government perspectives. Simulation results indicate that fluctuations in oil prices can jeopardize projects with insufficient economic benefits. Companies can improve project economics by adjusting the initial production scale within a certain range, but excessive reductions may have adverse effects. Government investment subsidies provide the most significant boost to economic benefits but do not necessarily enhance the project's environmental benefits. Conversely, subsidies for electricity prices and carbon storage can improve both economic and environmental outcomes, although the economic benefits do not have significant improvement. This study can be a reference for CCUS-EOR project investments and provide suggestions and measures for enterprises and governments to improve the investment returns of these projects for sustainable development.

Suggested Citation

  • Sun, Xiaorong & Zhao, Xiangxiang & Gu, Lichen & Jin, Chenhao & Pan, Xueping & Jang, Shinae, 2025. "A system dynamics-based comprehensive investment benefit and carbon reduction evaluation for CCUS-EOR projects," Technological Forecasting and Social Change, Elsevier, vol. 220(C).
    • Handle: RePEc:eee:tefoso:v:220:y:2025:i:c:s0040162525003518
    DOI: 10.1016/j.techfore.2025.124320
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    References listed on IDEAS

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    1. Wang, Nan & Akimoto, Keigo & Nemet, Gregory F., 2021. "What went wrong? Learning from three decades of carbon capture, utilization and sequestration (CCUS) pilot and demonstration projects," Energy Policy, Elsevier, vol. 158(C).
    2. Gordon Sick & Andrea Gamba, 2010. "Some Important Issues Involving Real Options: An Overview," Multinational Finance Journal, Multinational Finance Journal, vol. 14(1-2), pages 73-123, March-Jun.
    3. Alexey Mikhaylov & Nikita Moiseev & Kirill Aleshin & Thomas Burkhardt, 2020. "Global climate change and greenhouse effect," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 7(4), pages 2897-2913, June.
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