Carbon Capture and Sequestration Market

The global Carbon Capture And Sequestration Market was valued at USD 2.1 Billion in 2022 and is projected to reach a value of USD 7.49 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 19.9% between 2023 and 2030.

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Carbon Capture And Sequestration is a method of lowering carbon emissions, which may be essential in the fight against global warming. It is a three-step process that captures the carbon dioxide produced by energy or industrial processes, like producing steel or cement, transporting it, and storing it underground. Here, we examine the operation of CCS and any potential advantages. CCS captures carbon dioxide (CO2) emissions from industrial processes, such as manufacturing steel and cement or burning fossil fuels to produce electricity. Afterward, this carbon is shipped or piped from the point of production to a deep geological formation for storage.

The Intergovernmental Panel on Climate Change (IPCC) emphasized that to meet the Paris Agreement's goals and keep future temperature increases to 1.5°C (2.7°F), we must use technology to remove carbon from the atmosphere in addition to boosting our efforts to cut emissions. One of these technologies, CCS, has the potential to be crucial in the fight against global warming. The Global CCS Institute's 2022 report states that at the end of the year, there were 194 large-scale CCS facilities worldwide, up from 51 in 2019—61 of which were new CCS facilities that were added to the project pipeline in 2022. Of these projects, 30 are currently in operation, 11 are being built, and the remaining projects are at various stages of development. Out of the total number of projects, 94 (80 in the U.S.), 73 (27 in the UK), 21 (in Asia-Pacific), and 6 (in the Middle East) were located in the Americas. All CCS facilities currently under development have a combined CO2 capture capacity of 244 million tonnes per year, a remarkable 44% increase from 2017.

The main factors driving the global carbon capture, utilization, and storage market are the growing emphasis on lowering CO2 emissions, support for government initiatives, and rising demand for CO2-EOR techniques. Carbon dioxide emissions have increased due to quick industrialization around the world. The governments of numerous developed and developing nations, including the United States, the Netherlands, the United Kingdom, China, and India, are constructing numerous CO2 capture and storage facilities to reduce their carbon footprints. Over the forecast period, this factor is anticipated to fuel the carbon capture, utilization, and storage market.

Economic Insights

Following the COVID-19 crisis, the current and seemingly unavoidable recession is significantly lowering energy use and greenhouse gas emissions. Depending on how long and severe the recession is, this will contribute differently to reaching the 2030 goal. At the UN COP27 climate summit in Egypt, Ukraine stated that a significant amount of warming gases had been released into the atmosphere due to Russia's invasion of its country.

Top Market Trends

1. Growing Stringent Policies: Various governments have put forth strict action plans to control climate change and reduce overall carbon emissions over the short and long term. Stern efforts to track and reduce greenhouse gas (GHG) emissions from power plants are expected to increase the market size further. In response, the International Energy Agency (IEA) reported in February 2020 that global energy-related CO emissions increased to 33.3 gigatonnes (Gt) in 2019 from 32.2 Gt in 2015, demonstrating an increase of over 3.4% in just five years.

2. Investments by Government Organizations: Many governments are making significant investments in creating new substitutes to effectively capture carbon from various sources. Additionally, the organizations concentrate on gathering information about potential new sites for storing and using sequestered gases. Additionally, they support the creation of numerous carbon capture technologies. For instance, the FLExible Carbon Capture and Storage (FLECCS) project received a USD 11.5 million grant from the US Department of Energy (DoE) in July 2020. With urgent Carbon Capture And Sequestration needs, the program aims to enable new natural gas power generation systems and renovate existing units.

3. Growing Number of Projects: With a total annual capture capacity of almost 45 Mt CO2, about 35 commercial facilities use CCUS for industrial processes, fuel transformation, and power generation. Although CCUS deployment has historically lagged behind expectations, momentum has increased significantly in recent years. Across the entire CCUS value chain, 300 projects are currently in various stages of development. By 2030, project developers hope to have over 200 new capture facilities up and running, capturing more than 220 Mt of CO2 annually. However, as of June 2022, only about ten commercial capture projects still in development had received FID. Even at this level, the CCUS deployment would still be far below what is needed in the Net Zero Scenario.

4. Rising Demand for CO2 for Enhanced Oil Recovery: Over 65% of the total recoverable oil in place that was not produced through primary and secondary phases is recovered using the tertiary oil recovery technique known as enhanced oil recovery (EOR). The carbon capture and storage market is being driven by increased efforts to reduce the maximum levels of carbon dioxide produced by the production and use of fossil fuels.

Market Segmentation

The global Carbon Capture And Sequestration market can be categorized as End Use, Capture Source, and Region. Based on End Use, the market can be categorized into Enhanced Oil Recovery (EOR) and Dedicated Storage & Treatment. Additionally, based on the Capture Source, the market can be further split into Chemicals, Natural Gas Processing, Power Generation, Fertilizers Production, and Other Capture Sources. Likewise, based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on End Use

Dedicated Storage & Treatment Segment to Lead with the Largest Market Share Owing to Growing Demand for Fossil Fuels

The dedicated storage & treatment segment will dominate the Carbon Capture And Sequestration market during the forecast period. Due to the high storage potential in both onshore and offshore deep geological formations, the dedicated storage & treatment segment is expected to make significant progress. Additionally, the abundance of low-pressure aged oil and gas reserves combined with the rising demand for fossil fuels across various residential, commercial, and industrial operations is expected to favor the outlook of the EOR segment.

Based on the Capture Source

Natural Gas Processing to Account for the Largest Market Share Owing to Rising Energy Demand in Power Generation Industry

During the forecast period, the natural gas processing segment will dominate the global Carbon Capture And Sequestration market. Due to rising oil and gas production, new processing facilities will likely be set up, which will help this industry grow. It is also anticipated that rising energy demand and high-capacity manufacturing facilities will change the face of the power generation industry. The demand for various chemicals to produce various raw materials and finished goods for various industries is expected to grow exponentially, likely boosting the chemicals source segment.

Based on Region

North America to Lead Global Sales Owing to Growing Number of Projects

The global Carbon Capture And Sequestration market is expected to be dominated by the region of North America during the forecast period. The region's expanding ongoing and upcoming planned carbon capture and storage projects are to blame. For instance, in October 2022, Flour Corporation was hired to provide project integration and engineering services for Project Bison by CarbonCapture, a climate technology firm with U.S. headquarters that produces direct air capture (DAC) devices. A multi-megaton atmospheric carbon removal facility for this project will be built in Wyoming, United States, and it is planned for operation by the end of 2023. Moreover, the U.S. Department of Energy (DoE) announced in June 2022 that the federal government would contribute USD 12 million to six research and development projects promoting direct air capture (DAC) technology to create new instruments for effectively removing CO from the atmosphere.

The Europe market has been very active in CCU-related R&D. More European nations than other nations in the region are engaged in CCU activities through testing phases or pilot projects. Countries like the U.K. and Germany were major in developing European CCU projects. Companies in the industrial and power sectors could buy and sell emission allowances thanks to the Emission Trading System of the European Union. In previous years, the volume that was made available was reduced, raising the permit's price by EUR 25. CCU technology was adopted throughout Europe due to the market participants' increased incentives.

Competitive Landscape

The key players in the global Carbon Capture And Sequestration market include - Fluor Corporation (U.S.), Exxon Mobil (U.S.), Carbon Engineering Ltd. (Canada), ADNOC Group (UAE), Equinor (Norway), China National Petroleum Corporation (China), Dakota Gasification Company (U.S.), Shell (Netherlands), BP (UK), Chevron (U.S.), Linde (Ireland), Total (France), Aker Solutions (Norway), NRG Energy (U.S.) among others.

Recent Market Developments

· October 2022: Carbon Engineering has begun front-end planning for Direct Air Capture facilities in Texas. This location is anticipated to make it easier to construct several DAC facilities with a combined annual removal capacity of about 30 million tons of CO2 for targeted sequestration.

· March 2022: CO2CRC and Santos collaborated with Korea Trade Insurance Corporation, SKE&S, and Korea-CCUS Association (K-CCUS) to implement carbon capture and storage (CCS) projects in Timor-Leste and Australia. Santos claims that these businesses have a memorandum of understanding (MOU) in place to work together to construct carbon capture and storage (CCS) facilities in Australia and surrounding areas.

· July 2021: Shell plans to build a sizable carbon capture and storage (CCS) facility in Canada. Over its lifetime, the plant is expected to capture 300 million tonnes of carbon dioxide from the company's chemical and refinery plants.

Segmentation of the Global Carbon Capture And Sequestration Market