Global carbon capture capacity set to grow sixfold by 2030, BloombergNEF says
Energize Weekly, October 26, 2022
Global carbon capture capacity, with more than $3 billion invested in the technology this year, is set to increase sixfold from current levels by 2030, according to an analysis by energy research firm BloombergNEF.
That increase, however, will come from a small base of 43 million tons of carbon dioxide captured in 2022. Even the 279 million tons of CO2 Bloomberg projects for 2030 accounts for only 0.6 percent of current global emissions.
“The industry is still far from making a dent in global emissions,” the Bloomberg analysis said. “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.”
Still, carbon capture and storage (CCS) technology – removing CO2 from process waste gases or directly from the air – is seen as a key technology to decarbonize “hard-to-abate” sectors, such as petrochemicals, cement production and natural gas-fired electricity generation.
“CCS is starting to overcome its bad reputation,” David Luis Madrid, a BloombergNEF analyst, said in a blog post. “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.”
The Global CCS Institute, an industry-backed group promoting the technology, said that there are 190 CCS projects in the pipeline around the world, with 61 added in 2022.
The bulk of carbon capture capacity is currently used to collect CO2 from natural-gas processing plants, and it is pumped into oil formations to enhance oil recovery.
By 2030, Bloomberg projects most carbon capture will be used at power plants, factories and for the manufacture of low-carbon hydrogen and ammonia. It will be stored in geological formations.
CCS in the U.S. is set to receive a big boost from the federal Infrastructure Investment and Jobs Act and the Inflation Reduction Act.
The Infrastructure Act, passed in November 2021, includes $12 billion to be spent over the next five years for CCS research, development and demonstration projects, and market development.
The legislation also includes funding for four regional hubs for direct air capture with storage.
The Inflation Reduction Act, which went into law this past August, increased tax credits by 70 percent for carbon capture, utilization and storage projects, making a viable business case for the technology in petrochemicals, steel, cement and in some regions, power, Bloomberg said.
“These 279 million tons of capacity in 2030 is just the tip of the iceberg,” Julia Attwood, head of sustainable materials at BloombergNEF, said in a statement. “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.”