The new research from Wood Mackenzie shows the world is facing key challenges on its course to reach the 1.5-degree warming target that need to be addressed now.
According to the findings, the world is currently on course to achieve 2 billion metric tons of CO2 capture and removal by 2050, which aligns with a 2.5-degree global warming scenario. However, it needs to capture 7 billion metric tons of CO2 annually to align with the more stringent 1.5-degree compliant scenario for net-zero by 2050.
Mhairidh Evans, head of CCUS research for Wood Mackenzie spoke at Wood Mackenzie’s Carbon Capture, Utilization and Storage Conference in Houston that took place on Oct 11th, saying that urgency is needed to meet the 7 billion metric tons carbon capture goal.
“Energy efficiencies, renewables and alternative fuels will not be enough to meet net zero by 2050… We need a huge amount of carbon to be captured out of our industries and the power sector to decarbonize the last miles that can’t be easily reached by green electrification or alternatives. Right now, we are on track to meet our base case scenario, which forecasts 2 Btpa of CO2 capture and removal by 2050 – though this corresponds to a 2.5 degree global warming scenario. For net zero by 2050 and a 1.5 degree compliant scenario we would need 7 Btpa. To come close, we need to get shovels in the ground quickly,” Mr Evans elaborated.
As the research confirms, waiting for projects to become more economically viable will directly increase the risk of the world missing its climate target which could lead to imperative economic consequences that climate change is expected to cause.
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In his speech, Evans stressed the need to initiate CCUS projects swiftly, highlighting the urgency of the global situation. Wood Mackenzie is presently tracking 1,400 million metric tons of CO2 per annum in planned CCUS capacity across various project types worldwide, encompassing capture, transport, and storage.
The United States is hosting 33% of all such projects which ensures its leading position. That is primarily due to supportive initiatives like the Inflation Reduction Act’s 45Q tax credit, which encourages decarbonization among emitters, and the Infrastructure Investment and Jobs Act which facilitates the expansion of the CO2 transport and storage infrastructure value chain.
Despite economic support, costs still remain a concern for companies. Even with the 45Q tax credit, all expenses are not covered for every project which makes companies wait for prices to fall down further.
Wood Mackenzie anticipates that project development costs will drop up to 30% during the decade. That would make companies wait until that happens, as the 45Q tax credit extends to projects commencing construction as late as 2033. Waiting, however, will potentially delay project impact from emission reductions which is something that does not fit with the present reality we are faced with of mitigating the climate crisis urgently.