Carbon Capture Utilization and Storage Market Size, Share & Segment By Service (Capture, Utilization, Transportation, and Storage), By Technology (Pre-Combustion Capture, Post-Combustion Capture, and Oxy-Fuel Combustion Capture), By End-Use Industry (Oil & Gas, Power Generation, Iron & Steel, Chemical & Petrochemical, Cement, Others), And By Region | Global Market Forecast 2024-2032

Carbon Capture Utilization and Storage Market Size:

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Carbon Capture Utilization and Storage Market Overview:

The Carbon Capture Utilization and Storage Market Size was valued at USD 3.62 billion in 2023, and is expected to reach USD 24.2 billion by 2032, and grow at a CAGR of 23.5% over the forecast period 2024-2032.

The carbon capture utilization and storage market has been one of the critical factors in the global strategy towards mitigating climate change. Carbon capture utilization and storage incorporates technologies that capture CO2 from industrial processes, transporting them to storage sites, and sometimes utilizing them for various applications. The urgency to achieve international climate targets drives the resort to carbon capture utilization and storage technologies, as set by the Paris Agreement. For example, the Boundary Dam project in Canada represents an application of carbon capture utilization and storage to coal-fired power plants with dramatic reductions in carbon footprint.

The carbon capture utilization and storage market is driven by technology and economics. Many material and process-related innovations have reduced costs and increased efficiency in capturing carbon. For instance, the Petra Nova project in the U.S. combines carbon capture utilization and storage with enhanced oil recovery, which captures CO2 for increased additional oil production, thus yielding revenue while cutting emissions. Government policies and incentives, such as those of the U.S. Department of Energy and the European Union, spur growth through financial support and research aid in this sector. Similarly, the European Commission assigned four-fifths of its latest cross-border energy infrastructure funding package, worth EUR 594 million, to investments in carbon dioxide transportation and storage. This would ensure that the supply chain for the new carbon capture utilization and storage sector is secured. The EU has set itself a target to store at least 400 million tons of CO2 annually by mid-century, but that won't all be buried underground forever.

While the carbon capture utilization and storage market holds huge potential, it may also be influenced by high up-front investments, technology uncertainties, and problems concerning public acceptance of CO2 storage. Effective carbon capture utilization and storage infrastructure for transport and storage of captured CO2-demonstrated through projects such as Northern Lights in Norway-forms the base for scaling up these technologies. carbon capture utilization and storage may play the most relevant role in managing global emissions at a time when the global community is increasing its ambitions toward enabling a low-carbon economy.

However, the large-scale deployment of carbon capture utilization and storage faces several obstacles: high costs, fragmented markets, limited infrastructure or information about storage, and lack of policy support. This implies that multiple vectors of revenue will be needed to make the prospects for financing projects more viable. In this context, with clarity regarding the need to meet climate goals through carbon capture utilization and storage steadily increasing, many governments and private participants have been working to surmount such barriers.

Market Dynamics:

Drivers:

• Growing demand for CO2-EOR techniques.

A major driver of the carbon capture utilization and storage market is the increasing demand for Carbon Dioxide Enhanced Oil Recovery (CO2 EOR), a process by which carbon dioxide is injected into oil reservoirs to have more crude oil extracted. This has picked up some momentum as a solution that could work for enhanced recovery as well as mitigate climate change. By capturing CO2 from industrial processes or even directly from the air and using it for EOR, companies can reduce greenhouse gas emissions and enhance oil production simultaneously. This dual benefit proves particularly useful to an energy company that could be under some compulsion to meet regulatory requirements regarding reductions in emissions while bettering its bottom line.

One leading example of CO2-EOR in action is the Weyburn-Midale project in Saskatchewan, Canada-one of the world's largest and most enduring operations based on CO2-EOR. Since 2000, over 30 million tons of CO2 have been captured and injected into the oil fields of this project, increasing additional oil recovery while storing captured CO2 underground. The project demonstrates the basic feasibility and efficiency of CO2-EOR, not only in the domain of enhancing oil extraction but also in contributing to carbon sequestration. Finally, such project successes imply solidifying CO2-EOR as a keystone component in integrated carbon management strategies that enable greater carbon capture utilization and storage technology deployment and investment.

Rising Demand for CO2-EOR: Primarily, it is driven by its potential to aid in low-carbon economic transitions. As countries and industries are subject to increasingly tighter carbon emission regulations, the ability to use captured CO2 for EOR provides a practical pathway to attain these regulations while still making use of the already existing fossil fuel infrastructures. This demand is mirrored in increasing investment and research into the betterment of techniques for CO2-EOR, such as advancing the technology on capture and optimizing the injection process. The appeal of CO2-EOR is enhanced by the fact that it can be integrated with other low-carbon technologies and renewable energy sources that are essential in the broader Carbon Capture Utilization And Storage landscape and help drive overall market growth.

• Rapid industrialization led to a surge in CO2 emissions.

The surge in CO2 emissions through rapid industrialization has increased the requirement for effective carbon capture utilization and storage. As countries expand industrially, the number of manufacturing plants and heavy industries, power generation facilities, etc., increase, resulting in growing carbon emissions described as the main drivers of climate change. Industrial processes, most of which are energy-intensive and often run by fossil fuel power, contribute greatly to worldwide CO2 emissions. The technologies for carbon capture utilization and storage have therefore been very instrumental in their contribution to assuaging the effect of industrialization on the environment. carbon capture utilization and storage capture CO2 at source, either uses or stores it, therefore reducing these greenhouse gases that might contribute to global warming.

For instance, large-scale deployment of carbon capture utilization and storage is going on within the cement industry—one of the biggest industrial sectors with excessive emissions of CO2. Man-made CO2 is connected with cement production from the combustion of fossil fuels and the chemical processes of limestone calcination. Advanced projects, such as that at the Norcem cement plant in Norway, capture and store CO2. Norcem's plant will capture as much as 400,000 tons annually, then transport it and store it underground. The initiative has therefore clearly confirmed that carbon capture utilization and storage technologies can be integrated into industrial sectors for the reduction of their carbon footprint while continuing to contribute to meeting global infrastructure demands.

Global climate change agreements and national regulations entail reducing the carbon footprint; the urgent tone brought to the table by CO2 emissions from industries is further underlined by more stringent emission standards and carbon pricing mechanisms that industries are facing, and with these, the adoption of carbon capture utilization and storage technologies. This is evident in the growing number of public and private investments in carbon capture utilization and storage projects and research. The transition to associating carbon capture utilization and storage with industrial processes helps industries comply with regulatory legislation and strives toward their set goals of sustainability. Integration of carbon capture utilization and storage technologies with industrial practices is greatly relevant to tackling the challenges from rapid industrialization and associated environmental concerns.

• Increasing global focus on reducing CO2 emissions

An important driver of the growth in carbon capture utilization and storage is the increasing global focus on reducing CO2 emissions. As awareness of climate change impacts continues to grow, with knowledge of probable climate change impacts, governments, businesses, and organizations commit to stringent emission reduction targets for the limitation of global warming and the realization of international climate agreements like the Paris Agreement. Most of the attention is paid to CO2 reduction, and carbon capture utilization and storage technologies take their place under increased focus as a credible solution for capturing and managing carbon dioxide in industrial processes, power generation, and other sources. Such reduction in CO2 would therefore go in line with broader agendas of sustainability and low-carbon transition, where carbon capture utilization and storage technologies emerge as one of the core elements in global strategies to mitigate climatic change.

For instance, the ambitious climate policies set out by the European Union are aimed at reaching net-zero greenhouse gas emissions by 2050. To achieve such targets, the EU has provided funding for various projects on carbon capture utilization and storage, such as the Porthos project in the Netherlands. This will capture CO2 from industry in Rotterdam and transport it for storage underneath the North Sea. The EU commitment to reduce CO2 emissions provides impetus not only to the further development of advanced Carbon capture utilization and storage technology but also to regulatory and financial mechanisms that will underpin large-scale deployment. This exemplifies how global climate objectives in themselves may drive the growth and deployment of carbon capture utilization and storage solutions.

Besides, increased attention to CO2 reduction is also observed at the level of corporate sectors when companies set very high sustainability goals and are willing to execute carbon capture utilization and storage within their corporate social responsibility strategies. For example, energy companies like Royal Dutch Shell and ExxonMobil are currently developing and applying carbon capture utilization and storage technologies in an effort to lower their respective carbon footprints in tandem with global reduction targets for emissions. Matching these corporate initiatives are the policy and funding opportunities that will spur the use of carbon capture utilization and storage technologies. The rising emphasis on CO2 reduction is therefore accelerating the market demand for carbon capture utilization and storage solutions, speeding up innovation, and diffusing the deployment of these technologies across sectors and regions.

Restraints:

• High cost associated with carbon capture and storage.

The high cost of carbon capture and storage acts as one of the major restraints in this market. This will ultimately hamper wider diffusion. Capture of CO2 from power plants and industrial processes, its transportation, and storage underground safely are very expensive and need considerable investments in technology and supporting infrastructure. For instance, one of the world's largest CCS projects, Petra Nova in Texas, is facing cost challenges where total investment was pegged at more than $1 billion. High capital and operational costs—further compounded by continuous expenses accruing from maintenance and monitoring—may drive CCS into economic infeasibility for some industries or projects without huge government subsidies or carbon pricing mechanisms to offset these costs. Financial barriers underline the need for future technological improvement and cost reduction strategies if CCS is to become accessible and scalable.

Opportunities

• Upcoming projects in Asia-Pacific and Europe.

• Establishment of CO2 capture and storage plants by governments worldwide.

Challenges

• Declining crude oil prices impacting market growth.

KEY MARKET SEGMENTS

By Service

By service, the capture segment led the carbon capture utilization and storage market with the highest revenue share of more than 35% in 2023 due to its role in carbon capture technology in mitigating emissions from industrial processes and energy production. By capturing CO2 at the source, this segment significantly contributes to reducing greenhouse gas emissions, aligning with global efforts to combat climate change. Furthermore, the increasing implementation of capture initiatives in various industries, exemplified by current operational CCS projects globally utilizing technologies like pre-combustion capture, underscores the significance of capture services in driving revenue growth within the carbon capture utilization and storage market.

By Technology

Pre-combustion capture took the lead in the technology segment of the carbon capture utilization and storage market in 2023, capturing over 40% of total revenue. This dominance is attributed to its efficacy in capturing carbon emissions at the source before combustion, thus minimizing environmental impact. Operational CCS projects employing pre-combustion technology include the Val Verde Natural Gas Plants in the US, the Petrobras Lula Oil Field in Brazil, the PetroChina Jilin Oil Field in China, and the Great Plains Synfuel Plant in Canada, demonstrating its widespread adoption and success globally. These projects underscore the significance of pre-combustion capture in driving revenue growth within the Carbon Capture Utilization And Storage market.

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By End-Use Industry

The Oil & Gas segment dominated the carbon capture utilization and storage market in 2023 owing to the huge use of CO2 Enhanced Oil Recovery, involving the injection of captured CO2 into oil fields for enhanced recoveries. The infrastructure already available in the oil and gas industry, coupled with the economic incentives associated with CO2-EOR, raised this industry's share in the carbon capture utilization and storage market. For instance, projects like the Weyburn-Midale CO2-EOR project in Canada represented the dominance of this sector. This project had been running effectively for over two decades, in which millions of tonnes of CO2 were captured and stored, while more than additional oil production was increased. "It is projected that, by 2023, the share of the oil and gas market would be around 45% of the carbon capture utilization and storage because industry-wise it is a huge area with immense potentiality for investment in carbon management technologies.

Regional Analysis

In 2023, North America dominated the carbon capture utilization and storage market. It held more than 40% of the market share, due mainly to the massive deployment of carbon capture utilization and storage technology in the region. This was especially the case with the US leading in a huge number of projects and heavy investments in that sector. For example, the Petra Nova project in Texas and the Weyburn-Midale CO2-EOR project in Canada have become legendary in terms of leadership for the North American region. These projects not only showed advanced capability in capture and storage but also set some guidelines for carbon capture utilization and storage practices worldwide. Further, through regulations and policies in North America, fiscal incentive schemes, and government funding, carbon capture utilization and storage technologies have been very fast diffused and developed at an unprecedented scale to consolidate this leading position in the regional market.

Moreover, the Asia Pacific region is rapidly turning into a significant contributor, and in 2023, it was the fastest-growing region with a market share of 25%. Although unfavorable geology faces most countries, Australia, Malaysia, and Indonesia are fast emerging as key hubs because of their CO2 storage potential in depleted oil and gas reservoirs, coupled with stricter environmental regulations. According to studies by Rystad Energy, these countries will host their fair share of the up to $15 billion that might be invested in carbon capture utilization and storage in the next decade. It has also put Southeast Asia on the map due to cost-effective CO2 storage options. This has seen countries like Japan and South Korea team up with regional companies such as Malaysia's Petronas, Indonesia's Pertamina, and Australia's Santos and Woodside Energy in the face of a high population and limited domestic infrastructure.

Key Players:

Aker Solutions, Mitsubishi Heavy Industries Limited, Fluror Corporation, Equinor ASA, Royal Dutch Shell Plc, Linde Plc, JGC Holdings Corporation, Exxon Mobil Corporation, Total Energies SE, Schlumberger Limited, Honeywell International Inc.

Recent Development:

• June 2024: Enerflex Ltd. and BASF signed an MoU to jointly advance the commercial deployment of carbon capture utilization and storage applications through the combined leading expertise of Enerflex in gas processing and compression, with the OASE® blue technology of BASF for CO2 Capture.

• April 2024: Aker Carbon Capture was awarded a pre-FEED for Statkraft’s Heimdal waste-to-energy plant to capture 220,000 tonnes of CO2 annually.

• March 2024: Aker Carbon Capture ASA announced an agreement with SLB to merge their carbon capture businesses to support large-scale industrial decarbonization.

• January 2024: Linde began supplying captured carbon dioxide and clean hydrogen to Celanese, a global chemical and specialty materials company.

• January 2024: The European Commission committed EUR 594 million to the development of CO2 transport and storage, underpinning the carbon capture utilization and storage industry. The EU had set goals to store 400 million tons annually by mid-century, although not all would be stored permanently underground