The border turns off the smoke. The new race for carbon capture between Mexico and the U.S.

If the northern border has been a binational factory for decades, 2025 threatens to turn it into a massive CO₂ sink as well. The evidence is clear: in 2024, global carbon capture and storage (CCS) capacity “under construction” was on track to double to over 100 million tons per year once projects currently being built go online—a leap that shifted the conversation from technological promise to industrial deployment.

In the United States, two drivers are pushing adoption in industrial corridors adjacent to Baja California–California and Sonora–Arizona–New Mexico: regulatory certainty and fiscal incentives. First, the 45Q tax credit remains intact in 2025, guaranteeing up to $85 per ton for point-source capture with geological storage and up to $180 per ton for direct air capture (DAC), with transferability and inflation indexing. This ensures the viability of projects in cement, steel, refining, and gas-fired power across Texas and California. Second, the regulatory “pipeline” of Class VI well permits (geological storage) expanded rapidly. By April 2024, there were 130 applications covering 44 projects in 12 states and one tribal territory, signaling a robust expansion across the Gulf and Southwest.

The flagship of this wave is STRATOS, the DAC plant built by 1PointFive (Occidental) in Ector County, Texas. Designed to capture up to 500,000 tons of CO₂ annually, it secured Class VI injection permits in April 2025 and is expected to begin operations this year. STRATOS matters to the border ecosystem because of its demonstration effect and its ability to set benchmarks: it establishes cost, regulatory, and offtake precedents that cement and chemical plants on both sides of the border can replicate.

On the Mexican side, 2024 brought fewer inaugurations but greater advances in mapping and coordination. Mexico’s national geological storage atlas, together with its participation in the North American Carbon Storage Atlas (NACSA), allowed for the identification of saline formations and basins with potential for pilot projects. These steps—along with renewed debate on CCUS policy in 2025—set the foundation for clusters near Tijuana, Puerto Peñasco, La Laguna, and the industrial northeast.

The anchor industry on both sides remains construction materials. CEMEX, a Mexican multinational with facilities in California, Arizona, and Texas, deepened its CCUS strategy in 2024 by investing in KC8 Capture Technologies. The goal is to lower capital and operational costs for carbon capture in cement kilns and accelerate deployment across plants that supply public works and infrastructure projects throughout the border region.

Diplomatic cooperation also plays a role. In March 2025, California and Sonora announced a joint alliance for cleaner air and renewable energy. While the agreement emphasizes renewable power and transportation, it also opens the door to shared measurement, reporting, and verification (MRV) protocols and supply chains for solvents, absorbents, and compressors required for CCUS—particularly in the Puerto Peñasco–Imperial Valley cluster.

What do the 2024 numbers reveal for the binational frontier? First, supply of storage still lags demand: doubling global capacity under construction to over 100 Mt per year is not enough for the industrial load of the border region, but it creates the “first floor” for decarbonizing cement, steel, refining, and chemicals without driving away investment. Second, regulation dictates the pace: with 130 Class VI applications filed by April 2024 and Texas advancing primacy processes in 2025, the bottleneck is no longer technical but administrative. Third, financing is available: 45Q and the Inflation Reduction Act provide bankable structures, while voluntary offtakes by major tech firms cover the learning curve needed to reduce per-ton costs.

Looking ahead to 2025, the competitive advantage of the border will be political and methodological, not just technological. Mexico must execute on three priorities: harmonize site and monitoring standards with U.S. Class VI regulations while integrating social and groundwater protections to secure community buy-in; fast-track CCUS pilot projects in cement plants and power stations with streamlined regulatory windows and performance guarantees; and design fiscal tools or public procurement schemes (for example, “Net-Zero Public Works”) to complement U.S. incentives and prevent industrial relocation. The U.S., meanwhile, must accelerate permitting without sacrificing transparency. The STRATOS lesson is clear: when regulatory certainty exists, offtakes and capital flow. Cross-border frameworks like the California–Sonora agreement could be replicated by Baja California–California and Chihuahua–New Mexico, where universities such as UT Austin (GCCC) and Arizona State University (CNCE) can contribute MRV systems, risk assessments, and technical talent for shared clusters.

The main risk lies in framing CCUS as competing with renewables. It does not—it complements them. The border economy will continue to rely on steel, cement, and chemicals even as electrification and renewables expand. Without CCUS, those “hard-to-abate” sectors may migrate to jurisdictions with stronger incentives, taking jobs with them. With well-designed CCUS, the border can transform from a symbol of smokestacks into a hub of climate innovation: capturing carbon where wealth is produced and safely storing it beneath our feet.

Written by: Editorial

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