The deployment of carbon capture and storage (CCS) technologies needs to increase by over 100 times to achieve global net zero targets by 2050, according to a new report by McKinsey.
The CCS sector is adopting technology “far too slowly” to contribute to emission-mitigation reports meaningfully, the global management consulting group said in its research published Oct. 28.
CCS at scale could decarbonize as much as 45% of emissions from the industry sector. To achieve this goal, however, the deployment of carbon capture infrastructure needs to increase 120-fold and capture at least 4.2 gigatons of CO2 per year by 2050.
McKinsey estimated that this scaling would require an investment of $130 billion per year, which is to come from both public and private sources.
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According to the new report, several challenges must be overcome to achieve scaling. One is the uneven and uncertain policy around CCS projects, which are often one-of-a-kind and therefore still unproven. McKinsey argued that a successful approach would require a combination of direct incentives such as support for shared infrastructure and indirect incentives such as voluntary markets, as well as regulatory enablement, and risk management.
Another challenge ahead of scalable CCS technology is the establishment of revenue streams other than government subsidies. Companies are, however, hesitant to commit capital without regulatory certainty, the report said.
The CCS projects are also large and unproven, McKinsey’s research stated. “Essentially, every CCUS project to date has been unique, creating all the delivery challenges of first-of-a-kind projects, but they are also commercially fragile, making success all the harder to achieve,” the study said.
The research also discovered that the cost benefits of scaled projects come with coordination complexity, where all components of the value chain need to work in a synchronized way.
Controversial public opinion is also among the major challenges ahead of CCS, according to McKinsey. While CCS is part of many serious analyses on how to achieve net zero, opponents of the technology still see it mostly as a tool to enable the continuation of the fossil fuel sector.
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