CCS Growth Is Set To Continue With Challenges Ahead

4th March 2024

The carbon capture and storage (CCS) market is anticipated to witness growth despite facing challenges in initiating significant momentum in 2024, according to global financial services provider ING. ING suggests that expectations for rapid expansion this year should be tempered, giving way to more pragmatic anticipation of steady progress in the emerging carbon capture sector.

One of the obstacles hindering the CCS market is the prevailing uncertainty stemming from various factors, including upcoming elections in the EU and US. CCS serves as a critical technology for facilitating the transition towards a net-zero economy, and while its growth is expected to gather momentum in 2024, overly optimistic projections of rapid advancement are likely to moderate. Additionally, elections in key markets such as the US and EU will further compound existing uncertainties.

Another challenge lies in the substantial cost associated with carbon capture technology, which remains a significant impediment to market expansion, hindering its growth rate necessary for mitigating the climate crisis. However, governments worldwide are increasingly demonstrating support for CCS solutions, with some anticipating an eightfold increase in carbon capture capacity by 2030, as reported by Bloomberg New Energy Finance.

Presently, the global carbon capture and storage effort captures and stores only a minute fraction – 0.1% – of global CO₂ emissions. However, to effectively curb rising temperatures, this figure must escalate to 15% by mid-century. Efforts to decarbonize the global economy are approaching a critical juncture, evidenced by agreements reached at the COP28 climate conference to transition away from fossil fuels and triple investment in renewables. Nonetheless, renewables alone cannot achieve a net-zero economy, underscoring the indispensable role of carbon capture and storage in preventing CO₂ emissions and mitigating global warming.

In 2024, CCS technologies are poised to gain further traction. More companies in hard-to-abate sectors are committing to decarbonization and recognizing CCS as a cost-effective technology for emission reduction, particularly in industries like steel or plastics production. Concurrently, government support for CCS is on the rise. Bloomberg New Energy Finance projects an eightfold increase in CCS capacity by 2030, contingent on the realization of all announced projects.

However, forecasting capacity growth in the nascent CCS market presents challenges, as not all project announcements carry the same weight. While numerous projects are in the pipeline, only a fraction have progressed to the final investment decision stage, with construction either underway or imminent.

Despite these challenges, ING views CCS as a promising market in the long term. Nonetheless, the company is attuned to real-world factors that will influence the market in 2024, including elections in the US, EU, and India, demand from major emitters for CCS, carbon pricing, and social acceptance. Protea has a complete Carbon Capture and Storage (CSS) section here at https://www.protea.ltd.uk/carbon-capture-and-storage-ccs for more information.

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