Most of the world’s current CCUS capacity is located in the US, owing to a combination of government-supported pilot projects, significant numbers of natural gas processing plants (a good fit for CCUS because they separate out CO 2 by design), and demand for CO 2 for use in enhanced oil recovery (which relies on the gas to increase the amount of oil extracted from a reservoir). Key policy developments are taking place in the following regions: They are realizing that CCUS can play a key role in future-proofing high-emissions industries, enabling them to compete in an increasingly carbon-constrained world. However, leading governments are beginning to implement policies that provide sufficient economic incentive-through higher carbon prices, tax incentives, and greater support for individual projects-for businesses to consider CCUS. Most significant, when governments have established a carbon price (a charge on emitters for every metric ton of CO 2 they produce), the level has typically been too low to incentivize investment in CCUS. Scaling up would also support and require a network of suppliers, investors, and users.ĭespite the consensus view that CCUS will need to be an essential part of any plan to tackle climate change, government policy worldwide has remained a long way from making the technology economically viable. Getting there will depend on increasing CCUS deployment to capture 140 to 290 times the 32 million tons of capacity available today. However, they will need to plan ahead to maximize their competitive advantage and manage risk as the market develops.Īccording to the International Energy Agency, CCUS technology would need to prevent nearly 4.4 gigatons of CO 2 a year from entering the earth’s atmosphere by 2040, increasing to 9.4 gigatons annually by 2060, The Economic Case for Combating Climate Change, the upper-limit scenario set in Paris. By moving early and investing in low-hanging fruit (projects that become commercially attractive thanks to new incentives), companies can secure their market position in readiness for the opportunities to come. The use of CCUS in these areas could accelerate the development of the technology in ways that make it suitable in higher-cost applications.Įnergy and industrial companies that act now can create, and benefit from, a global industry that could be worth $90 billion in the next decade-and far more in the following decades if the CCUS industry matures. These include industries with concentrated CO 2 emissions, which are easier to capture, including natural gas processing, ammonia production, ethanol production, and other petrochemical applications. While most supporters and opponents of CCUS focus on its use in power generation, where the cost of using the technology is high, we believe that recent tax incentives and policy initiatives, mainly in the US and Europe, create a credible near-term investment opportunity in industries where the cost of CCUS is relatively low. As a result, even though CCUS is 40 years old, fewer than 100 projects have been developed worldwide, with a combined estimated capacity of around 32 million metric tons of CO 2-a small fraction of global emissions. Concerns about its long-term sustainability, the feasibility of technical advances, and the economic viability of expensive but high-volume applications (particularly in coal- and gas-fired power generation) have also led to skepticism about CCUS among public and private players. According to international energy and climate change agencies, the technology offers one of the few means of dealing with large, stationary emitters of CO 2.īut so far, carbon capture, utilization, and storage (CCUS) has proved to be too costly to be commercially viable, and governments have largely failed to offer policies to support the technology. The widespread adoption of carbon capture technology is crucial for meeting the Paris Agreement’s goal of limiting the rise in the global temperature to well below 2☌. Technology, Media, and Telecommunications.
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