The carbon capture and storage market is estimated to be valued at US$ 5.98 billion in 2024, growing at a CAGR of 12.4% over the forecast period (2024-2031). The market growth can be attributed to rising stringent emission norms across various industries as well as the growing demand for carbon neutral energy sources. Furthermore, favorable government policies and investments are also contributing to the adoption of carbon capture technologies.
Market Dynamics:
The growth of the carbon capture and storage market is driven by two key factors:
Supportive Government Policies: Various governments across the globe are formulating supportive policies and initiatives to reduce carbon emissions. They are providing incentives and subsidies to industries adopting carbon capture technologies. For instance, the U.S. government provides a tax credit of US$ 50 per tonne of carbon captured and stored.
Increasing Investments: Major players in the oil & gas industry as well as technology companies are significantly increasing their investments in developing improved carbon capture technologies. Several pilot projects are being undertaken to assess the technical and commercial viability of various carbon capture solutions. This is expected to lead to the wider adoption of carbon capture over the forecast period.
Market Driver: Increasing regulations around carbon emissions
Governments around the world are implementing strict regulations to reduce carbon emissions and tackle climate change. Many countries have committed to achieve net zero emissions by 2050 and have introduced carbon pricing mechanisms. This is driving up the demand for carbon capture and storage technologies from power and industrial sectors to meet their emission compliance obligations in a cost effective manner. Carbon capture and storage allows them to continue using fossil fuels while meeting regulatory emission norms. The increasing regulatory pressure is a major driver for growth of the carbon capture and storage market.
Market Driver: Growing demand from the oil & gas sector for enhanced oil recovery
Carbon capture and storage technology is also used by oil and gas companies for enhanced oil recovery from mature oil fields. CO2 injected into depleted oil fields can recover 30-60% of the remaining oil. This opens up new revenue streams for oil producers. It also provides an appealing option to store the captured CO2 long term in a safe manner. The rising demand from the oil and gas sector for enhanced oil recovery is another key factor augmenting the carbon capture and storage Market.
Market Restraints: High capital cost of carbon capture projects
One of the major restraints for the widespread adoption of carbon capture and storage technology is its high capital cost. Setting up carbon capture facilities requires huge investments which increase the cost of electricity generation or industrial production. The capture plant, transportation infrastructure, and storage site together involve investments running into billions of dollars. This high upfront cost poses challenges for the commercial deployment of carbon capture projects.
Market Restraints: Concerns around the leakage of stored carbon dioxide
There are also environmental concerns around the long term storage of carbon dioxide. Questions remain around the effectiveness and safety of geological storage over decades and centuries. Potential risks of leakage of stored CO2 back into the atmosphere and its interactions with rocks and groundwater need better understanding. Addressing public and regulatory concerns around safety and integrity of storage sites is essential to accelerate the large scale adoption of carbon capture and storage technology.
Market Opportunities: Emerging markets’ demand for low carbon power generation
Developing economies are experiencing strong growth in the electricity demand to power their industrialization and development. At the same time, they are under increasing pressure to reduce emissions from the power sector and adopt cleaner energy sources. This presents a major market opportunity for carbon capture and storage technology as it allows existing coal fired power plants to operate in a lower carbon mode, providing a feasible solution to address both energy demand and emission goals.
Market Opportunities: Potential revenue from the sale of captured carbon dioxide
The commercial use of captured CO2 provides another incentive to develop carbon capture and storage projects. CO2 can be sold to industries like food and beverage for carbonation or used for enhanced oil recovery projects. This could offset part of the capital cost and make carbon capture investment economically more viable. The development of the CO2 transport infrastructure and markets would stimulate greater deployment of carbon capture and storage.
In conclusion, while increasing regulations around carbon emissions and demand from oil industry are driving factors, high costs remain a challenge for the widespread adoption of carbon capture and storage technology presently. However, emerging opportunities around CO2 utilization and the growing need for cleaner power in the developing world indicates potential for the future growth of the carbon capture and storage market.
Link - https://www.coherentmarketinsights.com/market-insight/carbon-capture-and-storage-market-5065
Key Developments:
- In December 2022, Petroleum Sarawak Bhd (Petros), a state-owned oil and gas company in Malaysia, partnered with a South Korea-based steel-making company, Posco Group, to work together on developing carbon capture and storage (CCS) at a plant in Sarawak, Malaysia
- In December 2022, Oil and Natural Gas Corporation Limited (ONGC) is the largest oil and gas exploration and production company in India collaborated with Shell is a global energy company headquartered in The Hague, Netherlands. to study Carbon Capture, Utilization, and Storage (CCUS). The joint effort will focus on studying CO2 storage and screening for Enhanced Oil Recovery (EOR) in key areas of India including depleted oil and gas fields and saline aquifers.
- In November 2022, Carbon Engineering Ltd is a Canadian-based company that specializes in the development of Direct Air Capture (DAC) technology for removing carbon dioxide (CO2) from the atmosphere. received significant investments from Airbus is a European multinational aerospace corporation with its headquarters in Toulouse, France. and Air Canada to accelerate the development of scalable and cost-effective decarbonization solutions. These investments will support the advancement of Carbon Engineering's Direct Air Capture (DAC) technology, designed to extract carbon dioxide directly from the atmosphere on an industrial scale. The funds will be used to further Carbon Engineering's technological innovation efforts at its CE Innovation Centre, the world's largest specialized research and development facility dedicated to DAC.
Key Players:
Honeywell International Inc., Schlumberger Limited, Aker Solutions, Dakota Gasification Company, Siemens Energy, Sulzer Ltd., Japan CCS Co., Ltd., LanzaTech, Shell PLC, Linde plc, Mitsubishi Heavy Industries, Equinor ASA, Exxon Mobil Corporation, Carbon Engineering Ltd., and Fluor Corporation
