CARBON CAPTURE AND STORAGE MARKET ANALYSIS

Market Size and Trends

The carbon capture and storage market is estimated to be valued at US$ 5.98 Bn in 2024 and is expected to reach US$ 13.59 Bn by 2031, growing at a compound annual growth rate (CAGR) of 12.4% from 2024 to 2031.

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The carbon capture and storage market is expected to witness significant growth over the forecast period. This can be primarily attributed to the stringent government regulations regarding emission control and carbon reduction targets globally. The increasing utilization of CCS technology in applications such as enhanced oil recovery is also boosting the market growth. Moreover, rising environmental concerns resulting from high carbon emissions from industries, such as cement, mining, and power generation, is prompting market players to adopt carbon capture technologies and offer solutions. However, high capital investment associated with carbon capture and lack of overall infrastructure is a major restraint challenging the market growth. But increased government investments and subsidies in key markets are expected to counter this effect.

Stringent government regulations and norms

Many governments across the globe have mandated strict regulations and norms to curb carbon emissions and combat climate change. Carbon capture and storage (CCS) is being strongly promoted as an important technology by international organizations to reduce greenhouse gas emissions from large stationary sources like fossil fuel-based power plants and industrial facilities. Several countries have formulated policies that stipulate carbon pricing and cap the amount of emissions that can be released by heavy polluting sectors. Non-compliance would attract hefty financial penalties. This is compelling private companies and power generators to explore CCS as a viable option to curtail their carbon footprint in a cost-effective manner. Regulations in Europe, Aisa Pacific, North America, and other regions require emission sources exceeding certain thresholds to deploy carbon capture. Government subsidies and tax incentives are incentivizing the adoption of CCS projects. Stricter emission norms being drafted for the future would increase the need for end-of-pipe carbon abatement technologies like CCS. The policy push is expected to be a key driver boosting demand for CCS systems from energy intensive industries and utilities over the coming years.

Market Concentration and Competitive Landscape

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More people are focusing on smoothly shifting from using fossil fuels to renewable energy and other clean options. Rapid decarbonization runs the risk of leaving certain assets stranded and impacting energy security if not planned and executed carefully. CCS provides an important bridging technology that can help lower such transition risks by providing a means to decarbonize existing fossil fuel-based infrastructure in a graduated, cost-effective manner. CCS allows the continued utilization of resources invested in coal and gas-fired power plants and refineries by facilitating their operation in a carbon neutral way. This buys valuable time to scale up renewable sources and implement disruptive emission reduction strategies while maintaining grid stability. CCS also provides solutions for industries like aviation, shipping, and heavy manufacturing, which find it tough to reduce emissions. They heavily depend on liquid fuels and encounter difficulties in quickly switching to low-carbon options.

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The technologies needed for viable commercial-scale carbon capture are still quite expensive compared to its alternatives. Public acceptance of underground carbon storage also remains uncertain. Regulatory frameworks for long-term liability and monitoring of stored carbon are still being developed in many jurisdictions. Significant transportation infrastructure would be required to transport captured carbon from emission sources to suitable storage sites. The market also lacks financial incentives for first movers, as the social cost of carbon is not yet reflected in energy prices.

Market Opportunities: Climate Change Mitigation Initiatives: Driving Demand for Emission Reduction Solutions

Government investments and regulations around climate change mitigation are driving the demand for options to reduce hard-to-abate industrial emissions. Developing expertise in carbon capture and storage technologies and services presents an opportunity to export knowledge and projects to other regions. 

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In terms of technology, post-combustion contributes the highest share of the market owing 39.7% in 2024 to its ability to efficiently reduce carbon emissions from existing fossil fuel power plants and industrial facilities. Post-combustion captures carbon dioxide after the combustion of fossil fuels such as coal, natural gas, or oil. This allows the existing fossil fuel power generation infrastructure to continue operating while significantly reducing their carbon footprint. The captured CO2 can then be stored underground or utilized for enhanced oil recovery. Post-combustion is considered the most economically viable option for retrofitting carbon capture technologies to existing power plants and industrial facilities without requiring major infrastructure changes or process modifications. Its flexibility makes it well suited for a variety of applications ranging from natural gas combined cycle plants to cement factories. Advanced amine solvents offer higher absorption rates and lower regeneration energy requirements compared to first generation technologies, improving the business case for implementation. Government policies incentivizing carbon capture deployment and utilization of captured CO2 for enhanced oil recovery further boost the adoption of post-combustion systems. These factors consolidate post-combustion's dominant position in the carbon capture and storage market by enabling cost-effective reduction of emissions from current fossil fuel assets.

Insights, By Application- Rise in oil and gas production drives demand for carbon capture in the Oil and Gas segment

In terms of application, oil and gas contributes the highest share of 27.3% for year 2024 of the carbon capture market due to the rising need to curb emissions from production activities. Carbon capture technologies play a vital role in reducing the carbon footprint of oil and gas operations which contribute over 20% of global greenhouse gas emissions. They allow operators to meet increasingly stringent emission regulations while continuing production from both conventional and unconventional reserves. Captured CO2 can also be utilized for enhanced oil recovery which improves production rates from mature oil fields. This dual benefit of lowering emissions and boosting reserves drives considerable investment in carbon capture projects linked to oil and gas facilities. Depleted oil and gas reservoirs provide suitable geological storage locations for captured CO2. Meanwhile, natural gas processing emits high purity CO2 streams which are relatively easy to capture. These synergies consolidate the oil and gas segment's lead in the carbon capture industry. As global energy demand increases production from sources like oil sands with higher emission profiles, deployment of carbon management technologies in this sector will continue growing rapidly.

Insights, By Service- Value of captured CO2 drives focus on Capture services

In terms of service, capture contributes the highest share of 33.6% for 2024 of the carbon capture market given the high commercial value attributed to captured carbon dioxide. While transportation and storage are essential components, capture technology and related services generate the most revenue as they guarantee the supply of the high value CO2 commodity. Advanced amine systems and other emerging post-combustion capture technologies offer efficiency gains that slash the cost of separating and compressing CO2. Their improved performance relies on sophisticated process engineering, specialized solvent formulations, and proprietary equipment customized for each project. This reliance on innovative technologies and expertise drives the strong demand for carbon capture system design, installation, commissioning, and operational services. Carbon dioxide also commands a market price when utilized for enhanced oil recovery or other commercial uses like urea production. Its value as a product or tradable emission offset incentive increases capital spending on capture facilities and performance optimization services. Carbon capture projects are also intricate engineering feats requiring extensive feasibility planning, risk assessment, and verification services. These factors collectively reinforce capture services as the highest revenue segment in the evolving carbon management industry.

Regional Insights

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The North America region currently dominates the global carbon capture and storage market with 45.3% in 2024. This region has a strong presence of leading CCS technology providers and early movers in the domain. Countries like the U.S. and Canada have implemented supportive policies and regulations to promote CCS projects. Various pilot projects capturing emissions from natural gas processing and power plants have allowed operators to gain valuable operational experience in the region.

The U.S. in particular has emerged as the global leader with around 15 large-scale CCS facilities capable of capturing over 25 million tons of CO2 annually. Several oilfields located near emission sources help facilitate CO2 injection and storage. Recognizing CCS as a key element in its decarbonization strategy, the U.S. government has allocated attractive tax credits for new CCS projects. Leading energy companies are investing heavily to reduce the cost of emission separation and compression technologies.

Another growing region is the Asia Pacific. Countries like China, Japan, and South Korea are aggressively pursuing CCS to meet stringent long-term climate goals. This region accounts for over 50% of global CO2 emissions, presenting an opportunity for growth in carbon capture and storage market. China especially has shown determination with pilot projects capturing CO2 from coal and gas facilities. A positive regulatory framework and strong state funding augur well for wide commercial deployment in the coming decade. Energy companies from the region are now jointly developing advanced technologies suitable for their large emitting industries. The availability of suitable geological storage options further boosts the region’s attractiveness for CCS infrastructure development.

Market Report Scope

Key Developments

• In July 2023, Fluor Corporation Fluor Corporation is a global engineering, procurement, fabrication, construction, and maintenance company announced a new agreement where it obtained a license to deploy its advanced carbon capture technology, Econamine FG PlusSM, at Federated Co-operatives Limited's (FCL) Co-op Renewable Diesel Complex in Saskatchewan, Canada. This partnership fits into FCL's broader energy plans, including a significant investment strategy of USD 2 billion focusing on developing an integrated agricultural complex. The target for this project to be operational is set for 2027.
• In January 2023, ADNOC Group The Abu Dhabi National Oil Company (ADNOC) Group is a state-owned oil and gas company based in Abu Dhabi initiated an unprecedented project, launching the world's first fully Sequestered CO2 Injection Project. This involves implementing a CO2 injection well where all the injected CO2 will be carefully captured and stored within Abu Dhabi's saline aquifer. This project is a crucial part of ADNOC's long-term strategy of reducing its carbon footprint, aiming to cut its carbon intensity by 25% by 2030 and achieve Net Zero status by 2050.
• In January 2023, Equinor is a Norwegian multinational energy company headquartered in Stavanger entered into a significant contract with Linde is a multinational industrial gases and engineering company for the H2H Saltend project, a 600-megawatt low-carbon hydrogen production facility with carbon capture technology.
• In June 2023, ExxonMobil signed an agreement with Nucor Corporation, a major steel manufacturer in North America, as part of their commitment to help industrial clients reduce emissions. This marks the third carbon capture agreement in seven months, following partnerships with Linde and CF Industries. These collaborations demonstrate ExxonMobil's dedication to driving positive environmental impact across various industries.

*Definition: The carbon capture and storage market involves the technologies and services that capture carbon dioxide emissions produced from fossil fuel power plants and industrial processes, transport it to a storage site, and inject it into suitable underground geological formations for long-term isolation from the atmosphere. The goal is to prevent large quantities of carbon dioxide from being released into the air and contribute to global warming while still allowing for the continued use of fossil fuels in energy production and industrial operations.

Market Segmentation

•  Technology Insights (Revenue, US$ BN, 2019 - 2031)
  • Pre-combustion
  • Post-combustion
  • Oxy-fuel Combustion
•  Application Insights (Revenue, US$ BN, 2019 - 2031)
  • Oil and Gas
  • Power Generation
  • Iron and Steel
  • Chemical and Petrochemical
  • Cement
  • Others
•  Service Insights (Revenue, US$ BN, 2019 - 2031)
  • Capture
  • Transportation
  • Utilization
  • Storage
• Regional Insights (Revenue, US$ BN, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • Honeywell International Inc.
  • Schlumberger Limited
  • Aker Solutions
  • Dakota Gasification Company
  • Siemens Energy
  • Sulzer Ltd.
  • Japan CCS Co., Ltd.
  • LanzaTech
  • Shell PLC
  • Linde plc
  • Mitsubishi Heavy Industries
  • Equinor ASA
  • Exxon Mobil Corporation
  • Carbon Engineering Ltd.
  • Fluor Corporation