Global Carbon Capture and Sequestration Market - 2022-2029

Market Overview

The "global carbon capture and sequestration market" reached US$ XX million in 2021 and is expected to reach US$ XX million by 2029, growing at a CAGR of XX% during the forecast period (2022-2029).

Carbon Capture and sequestration (CCS) is an effective way of reducing carbon emissions, which can be key to helping to tackle global warming. It is a three-step process involving capturing the carbon dioxide created by power generation or industrial activity, transporting it and storing it underground. CCS involves the capture of CO2 emissions from industrial processes, such as cement and steel production, or the burning of fossil fuels in power generation. CO2 is transported by pipeline, but it can also be transported by truck, train or ship. Geologic formations appropriate for sequestration include depleted oil and gas fields, saline formations and deep coal seams.

While CO2 emissions from fuel combustion have declined in Europe, industries like aluminum, cement, iron and steel, pulp and paper and refineries have CO2 emissions resulting from energy-intensive industrial processes. Carbon capture, use and storage can contribute to tackling these sectors' emissions. Furthermore, it can help remove carbon from the atmosphere through bio-energy carbon capture and storage, direct air carbon capture and storage and be a platform for low-carbon hydrogen production.

According to the Global CCS Institute, 24 facilities capturing & injecting CO2 facilities were operational in 2020, of which 12 in U.S. Facilities capturing CO2 and projects under development operate in five industry sectors: fertilizer production, chemical production, hydrogen production, natural gas processing and power generation. These facilities inject CO2 to sequester the CO2 in underground geologic formations or use the CO2 to boost oil production from aging oil fields, known as enhanced oil recovery.

Market Dynamics

The global carbon capture and sequestration market are expected to boost the growing demand to reduce global warming.

Growing demand to reduce global warming

According to the Intergovernmental Panel on Climate Change, to achieve the ambitions of the Paris Agreement and limit future temperature gains to 1.5 degrees, there should be more than just increased efforts to reduce emissions. Deploying technologies to remove carbon from the atmosphere is also essential. Carbon dioxide is a commonly produced greenhouse gas. Carbon sequestration secures CO2 to prevent it from entering the Earth's atmosphere. The vision is to stabilize carbon in solid and dissolved forms so that it does not cause the atmosphere to warm. According to the International Energy Agency report, CCS technology's mark to restrict global warming to 2ºC aims to capture 400 million tons of CO) emissions a year by 2025.

In 2018, over two million tons of rubbish were treated in the EU, with under half of this going to landfills, where it emits climate-damaging methane emissions. Instead of being landfilled or shipped, residual waste is burned in waste-to-energy plants. In doing so, they create energy and recover certain materials, like metals. While incineration is better for the environment than landfills, waste-to-energy plants still create emissions that contribute to global warming. CCS will allow plants to resume incinerating waste, but the emissions will be captured and transported to a storage site. If the incinerator uses the waste of biological origin, CCS could reach negative emissions by bringing more carbon from the atmosphere than is produced.

High capital investments required

Commentators often cite CCS as too expensive and incapable of competing with solar and wind electricity, given their stunning fall in costs over the last decade, while climate policies, including carbon pricing, are not strong enough to make CCS economically attractive. Looking at carbon capture, the cost can vary by CO2 source, from a range of US$ 15-25/t CO2 for industrial processes producing highly concentrated CO2 streams (such as natural gas processing or ethanol production) to US$ 40-120/t CO2 for processes with dilute gas streams, such as power generation and cement production. Capturing CO2 from the air is the most expensive approach but could play a remarkable role in carbon removal. Some carbon capture technologies are commercially available while others are still under development and this further contributes to the extensive range in costs.

However, various companies are working on R&D to reduce the cost of carbon capture and sequestration technologies. For instance, In 2021, ker Solutions has established a research project to cut costs by 70% for new carbon storage facilities. It will be achieved by optimizing the CO2 value chain, focusing on transport and permanent storage of carbon after it is captured.

COVID-19 Impact Analysis

The lockdowns imposed worldwide and the collapse of economic activity have generated large reductions in greenhouse gas emissions from industrial activity. For example, in February 2020, China's industrial shutdowns have caused a 25% drop in CO2 emissions compared with 2019. The IEA estimates global CO2 emissions to drop by 8% in 2020 compared to 2019. The temporary drop in emissions will be inconsequential for climate change unless followed up with climate policy action. Beyond the temporary drop in emissions, the COVID-19 pandemic has triggered permanent behavioral changes in the way industries work, which may support climate change mitigation.

It has been notable that some governments have included increased abatement ambitions in their COVID-19-response packages and carbon capture and storage were featured in several instances. For instance, in 2021, the Norwegian parliament approved the Longship project, the CCS demonstration project (lank). The Norwegian Government will cover two-thirds of the costs during the project's first phase. The EU's Connecting Europe Facility funds the project. It has been clear that achieving net-zero emissions and temperature increases below 2°C will need the rapid deployment of all available abatement technologies, the early retirement of emission-intensive facilities and the retro-fitting of others with technology like CCS.

Segment Analysis

The global carbon capture and sequestration market are segmented based on service, end-user and region.

Significant carbon emissions coming from the power plants will boost the usage of CCS in the sector

The current fleet of fossil fuel combustion power plants causes significant amounts of carbon dioxide emissions (more than 12 billion tons of CO2 per year), which are considered the main cause of climate change. According to the International Energy Agency, electricity production from fossil fuels will increase by about 30% by 2035, inevitably leading to more CO2. Power plants are responsible for one-third of global CO2 emissions. Carbon Capture and Storage has the potential to play a significant role in reducing them at a considerable cost. If applied today to existing power plants, the electricity generation cost would double. The advantage of using post-combustion capture is that it can integrate with existing power plants without altering combustion. For example, for amine-based absorption/desorption post-combustion systems, large amounts of low-pressure steam will be needed to be extracted from the turbine. It will cause a high energy penalty, reducing the electricity output of a plant by about 20-30%.

Based on early and advanced deployment projects, the potential capture capacity of all CCS deployment in power is projected to reach around 60 Mt CO2 in 2030. Momentum for CCS has grown substantially in recent years: plans for 30 new CCUS-equipped power plants (totaling a capture capacity of over 30 Mt CO2 per year) were announced between 2020 and 2021, prompted primarily by new investment incentives in the U.S. While there are currently plans to provide over 40 power plants with CCUS globally, it isn't very certain they will all move without additional policy support.

Geographical Analysis

Continuous governments funding and support for development of carbon capture and storage will boost the demand in North America

Carbon dioxide capture and sequestration can play an important role in reducing greenhouse gas emissions while allowing low-carbon electricity generation from power plants. According to the U.S. Inventory of Greenhouse Gas Emissions and Sinks, over 40% of CO2 emissions in the U.S are from electric power generation. CCS technologies can dramatically reduce CO2 emissions by 80-90% from power plants that burn fossil fuels.

When installed to a 500 MW coal-fired power plant, which emits 3 million tons of CO2 per year, the GHG emissions avoided ( 90% reduction efficiency) will be equivalent to planting more than 62 million trees and waiting 10 years for them to grow and bypassing annual electricity-related emissions from 300,000 homes. U.S. Department of Energy has funded R&D in aspects of CCS since at least 1997 in its FECM portfolio. Since FY2010, Congress has provided US$ 7.3 billion in appropriations for CCS-related activities, including annual gains in recent years. In FY2021, Congress offered US$ 750 million to FECM, of which US$ 228.3 million was directed to CCUS.

The U.S. Environmental Protection Agency regulates CO2 injection through its Underground Injection Control program to protect underground sources of drinking water. While the agency sets minimum standards and criteria for UIC programs, most states are responsible for regulating and permitting wells injecting CO2 for EOR. Congress has incentivized the development of CCS projects by creating the Internal Revenue Code Section 45Q tax credit for CCS or its use as a tertiary injectant for EOR or other purposes. Recent Internal Revenue Service guidance on this tax credit is intended to provide industry certainty by establishing standards for "secure geologic storage of CO2," among other requirements.

Competitive Landscape

The global carbon capture and sequestration market are moderately competitive because of the high investments and R&D required to develop cost-effective technologies. Major players in the market include Linde AG, Carbfix, Fluor Corporation, Climeworks, Mitsubishi Heavy Industries, General Electric, NET Power, Siemens, Global Thermostat, Shell CANSOLVamong others.

The players in the market are known to incorporate numerous market strategies to achieve growth in the global carbon capture and sequestration market; these include new projects, collaborations with governments and R&D.

Linde AG

Overview: Linde is a global industrial gases and engineering company with sales of US$ 27 billion (€24 billion) in 2020. The company offers high-quality technologies. solutions and services that make its customers more successful and help sustain and protect the planet.

The company serves a variety of end markets, including chemicals & refining, manufacturing, food & beverage, electronics, healthcare and metals. Linde's industrial gases are utilized in countless applications, from specialty gases for electronics manufacturing to life-saving oxygen for hospitals, hydrogen for clean fuels and more. Linde delivers state-of-the-art gas processing solutions to support its customer efficiency improvements and emissions reductions.

Product Portfolio:

Carbon capture: The company offers carbon capture through the following options:

Pre-combustion

Oxyfuel combustion

Post-combustion

Key Development: In 2021, Linde Engineering Americas was selected by the U.S. Department of Energy's National Energy Technology Laboratory to install and test a 200 tons CO2 capture large pilot plant at the CWLP power plant in Springfield, IL, through funding made to the Board of Trustees of the University of Illinois. The project will collaborate with CWLP, BASF, the University of Illinois at Urbana Champaign and ACS.

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To visualize the global carbon capture and sequestration market segmentation by service, end-user and region and understand key commercial assets and players.

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Target Audience 2022

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