Abstract: Carbon capture, utilization, and storage （CCUS） has emerged as a pivotal technology in combating climate change, garnering significant attention worldwide. However, despite its potential, CCUS commercialization faces numerous challenges, including technological advancements, cost-effectiveness, policy frameworks, business models, and public acceptance. With a focus on coal-fired power plants, this study delves into the investment decisions surrounding CCUS under the integrated “carbon capture-utilization-storage” business mode. Drawing upon the real option theory, we formulate an investment decision model that accounts for the uncertainty of carbon prices and the diminishing cost of CCUS ventures. Additionally, we assess the impact of carbon price volatility and various incentive policies such as extra power quota, electricity price subsidy, and investment subsidy on the investment decisions of coal-fired power plants. Our findings highlight several key points: ① Higher CO₂ utilization rates favor better CCUS investments. When the CO₂ utilization rate is higher than 47.27%, coal-fired power plants can invest immediately; ② Stable carbon prices positively influence CCUS investment promotion; ③ Electricity price subsidy proves to be the most effective incentive policy.