Despite the recent surge in policy incentives for carbon capture projects, there are concerns that the world is not making sufficient progress to achieve the necessary carbon dioxide (CO2) reductions by 2050, according to an outlook for the carbon capture, utilization, and storage (CCUS) market published by S&P Global Commodity Insights last week.
While the last year has witnessed significant efforts to supercharge carbon capture projects, such as a 70% increase in tax credits for such initiatives in the USA and Europe exploring mandatory CO2 storage for oil and gas producers, more work is required to bridge the gap between expected CO2 capture capacities and the emissions reductions needed to meet climate goals.
S&P Global, using an “emitter-driven” methodology, has developed a bottom-up assessment for CO2 capture capacity installations, taking into account factors like country attractiveness, project analytics, emitter profiles, carbon pricing, and emissions.
Their projections suggest that by 2030, operational projects may capture only 25% of the 1 gigaton (Gt) of CO2 per year required to align with the net zero scenario by the International Energy Agency (IEA), highlighting the current shortfall in climate action.
Although North America and Europe are at the forefront, accounting for over two-thirds of projected capture capacity, the CCUS industry needs increased global support to align with climate targets, S&P Global said.
This gap becomes even more evident when the CCUS capture capacity outlook for 2050 is compared to more ambitious scenarios like the goal of limiting global warming to 1.5°C of the Intergovernmental Panel on Climate Change (IPCC).
The S&P Global outlook estimates that capture capacity will reach 2.2 Gt of CO2 per year by 2050, with China playing a crucial role.
However, this figure represents only 4% of the necessary CO2 reductions under the IPCC’s 1.5°C scenario.
To bridge this gap and achieve climate targets, the CCUS industry must see significant advancements in key drivers such as policy support, technological innovation, and the development of CCUS hubs.
The current trajectory suggests that, despite growth in capacity installations over the next three decades, more robust efforts are needed to make CCUS a viable solution in the fight against climate change.