Wood Mackenzie Says Carbon Capture Will Need $196B Through 2034

Wood Mackenzie Says Carbon Capture Will Need $196B Through 2034 - Carbon Herald

A new report by Wood Mackenzie, a leading energy research firm, predicts significant growth in the carbon capture, utilization, and storage (CCUS) market. 

The report, titled “CCUS: 10-year market forecast,” estimates that global carbon capture capacity will reach 440 million tonnes per year (Mtpa) by 2034, requiring a total investment of $196 billion.

According to the June 26 report, nearly half of this investment will be directed towards capturing carbon dioxide (CO2), with the remaining funds split between transportation ($53 billion) and storage ($43 billion).

The report highlights North America and Europe as the regions expected to attract the majority of investments (around 70%) across the entire CCUS value chain. 

Hetal Gandhi, Wood Mackenzie‘s Asia Pacific CCUS lead, emphasizes the crucial role of government funding in jumpstarting large-scale CCUS adoption.

“While no single mechanism has been used predominantly and each country devises novel methods to incentivise investments, nearly US$80 billion is directly committed to CCUS across five key countries,” she adds.

Relevant: Wood Mackenzie: Australia Could Become $600B Carbon Storage Hub

The United States takes the lead in government funding, contributing 50% of the total, followed by the United Kingdom (33%) and Canada (10%). Denmark and Australia round out the top five.

Development in other regions like China, India, Latin America, the Middle East, and Africa is currently hampered by a lack of clear policies, regulations, and financial support.

The report acknowledges the ongoing debate surrounding the role of CCUS in decarbonization efforts. 

Relevant: U.S. CLDP Unveils Its CCUS Handbook For Policymakers

“Some insist it should be strictly an interim technology for hard-to-abate sectors including cement, chemicals, steel, refining and power generation,” writes Gandhi. “Others see it as a deep decarbonisation tool.”

Regardless of its ultimate role, several factors will determine the success of CCUS in the next decade, according to the report. 

These include motivating high-emitting industries to adopt decarbonization strategies, ensuring cost-effectiveness and efficiency of the technology itself, and developing viable options for utilizing or storing captured carbon.

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