Carbon capture is the initial stage in removing carbon dioxide from the atmosphere. Carbon capture, utilisation and storage (CCUS) is an established technology with steadily decreasing costs. The cost of CO2 capture is a function of the CO2 source and separation technique. CCUS costs are often lower for high-concentration sources. CO2 emissions can be captured at the source, such as power plants, or directly from the air using membranes or solvents. Captured concentrated CO2 can be transported via pipes and used as feedstock later or stored underground.
While some CCUS technologies, such as CO2 extraction from high-purity sources or enhanced oil recovery as a storage alternative, may be deemed mature, the deployment of integrated, commercial CCUS projects remains an aspiration. CO2 capture demonstration projects in the power generation and heavy industries, which have been deployed on a wide scale, are either in operation or in the planning stage. More work is required to scale up and overcome the lack of experience in constructing and integrating CO2 collection, transport, and storage infrastructure.
According to McKinsey, for countries to meet their net-zero promise, CCUS use must increase 120 times by 2050, capturing at least 4.2 gigatonnes per annum (GTPA) of CO2, with estimates ranging from 6.0 to 10.0 GTPA of CO2. As a result, CCUS has the potential to decarbonise 45% of emissions in the hard-to-abate industrial sector. CCUS needs will exceed 2GTPA by 2050, representing a 60-fold increase over projects in the pipeline, in the most conservative scenario.
Given that growing the CCUS sector is projected to cost approximately US$130 billion each year until 2050, governments are unlikely to be willing to bear all the expenditures. According to McKinsey, the required investment by 2050 is comparable to worldwide investments in liquefied natural gas (US$120 billion per year), electric-vehicle charging (US$140 billion per year) and hydrogen (US$140 billion per year). Beyond 2035, annual investments in CCUS are estimated to reach US$ 120-150 billion. Beyond 2045, the investment will fall on stable growth rates in CCUS adoption (mostly for cement), while the iron and steel sectors will likely progressively choose green hydrogen as a decarbonisation route.
The global CCUS market is expected to increase at a 15.1% CAGR to US$4.9 billion during the forecast period (2022 to 2027) from US$2.4 billion in 2022, thanks to the rising demand from the oil and gas and power-generating industries. North America will likely dominate the CCUS market because of strong CO2 emission laws.
According to the IEA, in setting up 15 large-scale CCUS projects, around $15 billion has been invested over the last 10 years including $2.8 billion in public grant funds. Furthermore, governments from many nations, as well as allied companies, have declared plans to invest US$27 billion in CCUS projects. Figure 1 depicts the declared agreements and equity funding in US dollars from 2017 through 2021.
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