Carbon capture utilisation and storage (CCUS) is a vitally important element of the movement towards a more sustainable future. Now, the CCUS capacity pipeline is being boosted by both a growing number of projects and an increase in their scale and scope.
The oil and gas industry continues to be a major driver of development within the CCUS market, with companies such as ExxonMobil, Chevron and QatarEnergy featuring in the current ranking of leading owners of CCUS capacity.
However, despite the vitality of the CCUS market, there are still barriers that hinder its wider implementation. These include its relative high cost; too much regulation; a lack of public awareness of the benefits; a lack of sufficient financial incentives; limited available technology; and the need to develop a focused CCUS industry – not just as an add-on to an oil company.
The high costs and a lack of incentives continue to be a huge hindrance to CCUS’ expansion and its widespread adoption. New projects can incur high operating costs, varying from $15 to $120 per tonne of CO₂ captured.
The full cost consists of CO₂ captured at the emission source, followed by the dehydration, compression and liquefaction process, transportation, and, lastly, the injection and storage cost.
The energy consumption associated with capturing and compressing CO₂ adds to the cost burden. Despite the technological development of capture techniques, CCUS projects and their supporting infrastructure are very capital intensive, which, when combined with an inflationary environment, has posed a challenge to pipeline projects looking to acquire financing over the past few years.
Moreover, the economic viability of CCUS projects is hindered by the lack of financial mechanisms that would incentivise companies to invest and establish a viable return on investment. Carbon pricing can serve as an effective economic driver of CCUS adoption, yet schemes are not yet widely implemented.
According to research from GlobalData, Offshore Technology’s parent company, the US is expected to lead the global CCUS market. However, uncertainty surrounds eligibility for tax credits and whether funding packages previously offered to low-carbon technologies may be diluted or repealed. This has significantly impacted industry confidence in CCUS and associated industries such as low-carbon hydrogen.
An ongoing issue is that the regulatory framework for CCUS varies from country to country. The absence of clear and streamlined policies for CCUS leaves uncertainties and delays, and navigating procedures and obtaining permits is time-consuming and costly. Developing clear regulations is essential to provide a predictable and supportive environment for CCUS projects.
There are clear signs of promise for CCUS, however. In 2024, many new projects were announced, and if they are all are seen through to completion there will be more than 430 by 2030, according to GlobalData, a significant increase from the 71 that were online at the end of 2024.
Public awareness of the technology also continues to be an issue, one that presumably decreases once all the expected projects commence. Jenny McCahill, project manager, Carbon Engineering, said: “To some people, it seems like something that is way down the road, but the technology is ready for us to use now.”
This comment summarises the awareness of the technology and raises the question as to why it hasn’t been implemented further and become a ‘must-have’ element of oil and gas production? Do companies have the will to incorporate CCUS into their operations? Regardless, it serves as proof that more effective communication and an increase in public awareness is required.
Brian McCarthy, national hydrogen market lead at professional services company WSP, said: “In the long run, adoption of CCUS technology firmly fits into most emitters’ plans, as the life of their assets span decades and often over numerous federal administrations.
“The possibility of re-implementation of CO₂ reduction mandates over the life of an asset is real. In today’s economic climate, the value of the expanded tax credits established as part of the 2022 Inflation Reduction Act may not be enticing enough to pull forward investment.
“All hope is not lost, however. For projects currently in the planning and development phase, the costs to implement the technology are relatively small in proportion to overall project costs, so I think there is still a will and a way to advance adoption.”
Scaling CCUS capacity largely depends on the rapid rollout of supporting infrastructure such as carbon pipelines, which are needed to connect emitting facilities to storage sites. During a GlobalData webinar titled CCUS Outlook and Emerging Trends, analyst Francesca Gregory commented that although “the CCUS market is growing, a lot more work needs to be done in terms of its rapid scaling to fulfil the emissions reduction potential”.
A big shift towards post-combustion capture techniques is expected between now and 2030, with this capture technology dominating 67% of active capacity by 2030. This will largely come because of increased adoption across power generation and heavy industry facilities. While many new projects have been announced, Gregory adds that the “announcements will decrease as focus shifts to implementing the current project pipeline”.
The remaining 33% of active capacity is made up of pre-combustion (21%), oxyfuel combustion (8%) and direct air capture (4%).
While the shift towards post-combustion capture techniques appears to be solving the big problem of getting these projects off the ground, it runs into another big barrier of the high costs of CCUS.
