Carbon capture and storage is a growing industry with projected exponential development over the next couple of years. Research by Rystad Energy examines the service sector spending and has come to the conclusion that carbon capture and storage is set to skyrocket this decade, quadrupling from 2022 to 2025.
According to the research, by 2025 cumulative global carbon capture and storage spending is expected to reach $53 billion. Just last year, expenditure totaled $2.8 billion while in 2022 expected commercial projects were estimated to hit $4.4 billion.
It is then expected to nearly triple in 2023, topping $11 billion while 2024 and 2025 should see an additional $18 billion and $19 billion, respectively. That brings the projected total on projects’ spending to $52 billion by 2025. That is, of course, assuming all projects move ahead as planned.
According to the research, there are 56 commercial carbon capture and storage projects already in operation globally, capable of capturing up to 41 million tons of CO2 per year. Newly announced projects bring the total to nearly 140 plants that could be operational by 2025, capturing at least 150 million tons annually of CO2.
These projects are currently in various stages of development, including feasibility, concept and construction. The majority of the new additions come from Europe and North America, which account for 85% of the service purchases expected through 2025.
The research also explains that two-thirds of the total service spending will go towards the engineering, procurement, construction and installation (EPCI) of the facilities. These costs will be the primary driver of spending, coming to $35 billion out of the $55 billion expected by 2025.
Another cost driver is transportation that follows the capture of the CO2. It will require service purchases worth $8.5 billion through 2025. Each project has unique transportation needs – some transport the CO2 as gas or in a liquid form to the storage area using pipelines, trucks, or ships.
The distance and location of the target storage site also differ and the mode of transportation can vary. Pipelines are some of the most economically viable and used means of transportation of carbon dioxide. There are 51 operational onshore pipelines, 38 of which are located in North America.
The third and final step in most cases is storage. The potential storage location needs to be identified and is followed by drilling wells for injection and monitoring purposes. The storage process is estimated to incur at least $9 billion in service purchases through 2025.
Carbon capture and storage is developing rapidly and aims to serve the increasing demand for decarbonization coming from various industries. Large-scale deployment of the technology could ensure costs would continue to come down to make the process economically feasible and affordable.