GLOBAL CARBON CAPTURE CAPACITY DUE TO RISE SIXFOLD BY 2030:BNEF

The global capacity for carbon capture in 2030 is set to increase sixfold from the current level to 279 million tonnes of CO2 captured per year, according to a study done by the research company Bloombergnef (BNEF).

The newly released ‘2022 CCUS Market Outlook,’ BNEF indicated that the drastic growth in the market has led to a 44% increase in expected 2030 capacity compared to the 2021 outlook.

Carbon capture, utilisation and storage (CCUS) is a key technology needed to decarbonise hard-to-abate sectors such as petrochemicals and cement and to provide round-the-clock clean power through gas plants fitted with capture equipment.

“Still, despite the significant acceleration in the sector in the past two years, the world’s capacity for carbon capture is not being deployed fast enough to meet climate goals at the end of the decade, the BNEF study pointed out.

Today, most capture capacity is used to collect carbon dioxide (CO2) from natural gas processing plants and used for enhanced oil recovery. By 2030, most capture capacity will be used for the power sector, for the manufacture of low-carbon hydrogen and ammonia, or to abate emissions from industrial sources.

The amount of CO2 being captured today is 43 million tonnes or 0.1% of global emissions. If all the likely projects that have been announced come online, there would be 279 million tonnes of CO2 captured every year by 2030, accounting for 0.6% of today’s emissions, BNEF said.

The destination for captured CO2 is also due to change significantly from the status quo. In 2021, some 73% of captured CO2 went to enhanced oil recovery operations, and by 2030, storing CO2 deep underground will overtake oil recovery as the primary destination for CO2, with 66% of it going to dedicated storage sites, the BNEF study revealed.

“This change is being driven by legislation that incentivizes storage over CO2 utilisation, and by projects that aim to use carbon capture and storage (CCS) as a decarbonisation route and must store the CO2 to meet their goals,” it pointed out.

According to David Lluis Madrid, CCUS analyst at BNEF, “CCS is starting to overcome its bad reputation. It is now being deployed as a decarbonization tool, which means the CO2 needs to be stored. A lack of CO2 transport and storage sites near industrial or power generation point sources could be a major bottleneck to CCS development. But we are already seeing a big increase in these projects to serve that need.”

More capacity needed

Despite rapid growth in capture project announcements, the industry is still far from making a dent in global emissions. In order to be on track for net zero and less than 2 degrees Celsius of warming by 2050, between one and two billion tons of CO2 would need to be captured in 2030, an order of magnitude higher than current plans. Legislators have recognised this mismatch and are ramping up their support for the industry.

As per the study, the Inflation Reduction Act passed in the US increased tax credits for CCUS by 70%, making a viable business case for the technology in petrochemicals, steel, cement, and power in some region. Emphasising on the need for more action, Julia Attwood, head of sustainable materials at BNEF said “We haven’t seen the full impact of these credits yet, making this outlook a fairly conservative view of the future of carbon capture and storage. We expect to see another jump in announcements in 2022, especially in the US as developers there rush to make sure they meet the 2032 deadline for credits.”