System-level value of carbon capture and utilization under emission caps, power-sector decarbonization, and industrial electrification: A spatial optimization analysis for Japan

Carbon capture and utilization (CCU) can supply low-carbon fuels to hard-to-abate sectors, but its value depends on conditions across the energy system. Existing studies have not identified when CCU creates system-level value while jointly considering spatial matching of CO 2 sources with utilization and storage sites, multi-resource competition, and endogenous price and demand responses. We embed price-responsive industrial demand in a spatially explicit electricity–fuel–CO 2 optimization model for 46 of Japan’s 47 prefectures. We evaluate the system-level value of CCU, the difference in optimal objective values with and without CCU, across 1331 scenarios combining 11 levels each of the emission cap, power-sector decarbonization, and industrial electrification. Their interactions explain 74.9% of the variation in CCU deployment. CCU has positive value in only 7.4% of scenarios, reaching about 1.66 trillion USD where a stringent emission cap coincides with low-carbon electricity. Improving the electricity consumption coefficient of synthetic-fuel production by 20% enlarges the positive-value region by only about 0.7 percentage points. Positive value requires a grid carbon intensity below about 0.109 t-CO 2 /MWh, just inside the bound set by the electricity needed for synthetic-fuel production; this boundary hardly depends on calibration or structural assumptions. Read as a long-run cross-sectional screening under the modeled conditions, the results show that CCU is not a universal decarbonization option but a contingent flexibility mechanism, creating value only when low-carbon electricity, stringent emission constraints, and residual fuel demand coincide.