- Up to the end of the decade, cumulative investments in CCS are expected to reach USD 80 billion (£60bn).
- Recent turmoil and budgetary pressure in the global economy pose risks to CCS deployment, potentially shifting priorities and removing necessary finance needed.
- CCS will grow to capture 6% (1,300 MtCO2/yr) of global CO2 emissions in 2050, which falls significantly short of what is needed for any net-zero outcome.
Cumulative investment in carbon capture and storage (CCS) is expected to reach USD 80 billion over the next five years, according to DNV’s new Energy Transition Outlook: CCS to 2050 report.
DNV forecasts that capture and storage capacity is expected to quadruple by 2030. Up to now, growth has been limited and largely associated with pilot projects but a sharp increase in capacity in the project pipeline indicates that CCS is at a turning point. The immediate rise in capacity is being driven by short-term scale up in North America and Europe, with natural gas processing still the main application for the technology.
In the longer term, CCS is crucial for addressing sectors that are challenging to decarbonize, such as steel and cement production. These hard-to-decarbonize industries are forecast to be the main driver of growth from 2030 onwards, accounting for 41% of annual CO2 captured by mid-century. Maritime onboard capture is expected to scale from the 2040s in parts of the global shipping fleet.
As the technologies mature and scale, the average costs will drop by an average of 40% by 2050.
Ditlev Engel, CEO, Energy Systems at DNV said 'Carbon capture and storage technologies are a necessity for ensuring that CO2 emitted by fossil-fuel combustion is stopped from reaching the atmosphere and for keeping the goals of the Paris Agreement alive. DNV’s first Energy Transition Outlook: CCS to 2050 report clearly shows that we are at a turning point in the development of this crucial technology.
'But for all this advancement, the trajectory of CCS deployment remains a long way off where it must be to deliver net zero by 2050. Economic headwinds in recent years have put pressure on this capital-intensive technology and corrective action will need to be taken by government and industry if we are to close the gap between ambition and reality.'
CCS will grow from 41 MtCO2/yr captured and stored today to 1,300 MtCO2/yr in 2050, which will be 6% of global emissions. However, CCS will need to scale to six times this level to reach the amount outlined in DNV’s Pathway to Net Zero Emissions.
The roll-out of CCS is reliant on policy support and recent political turmoil and shifting budgetary priorities pose a significant risk to future deployment. Europe's strong price incentives will lead it to overtake North America in CCS deployment.
DNV forecasts that carbon dioxide removal (CDR) will capture 330 MtCO2 in 2050 – one-quarter of total captured emissions. Bioenergy with CCS (BECCS) is generally the cheaper CDR option and will be used primarily in renewable biomass for power and manufacturing.
Direct air capture (DAC) costs on the other hand remain high at around USD 350/tCO2 through to 2050, but voluntary and compliance carbon markets still ensure the capture of 32 MtCO2 in 2040 and 84 MtCO2 in 2050.
As the world has been too slow to reduce emissions, CDR will be important to reduce the large carbon budget overshoot. Beyond DNV’s forecast period, an enormous amount of CDR, alongside nature-based solutions, will be required to ensure net-negative emissions.
Jamie Burrows, Global Segment Lead CCUS, Energy Systems at DNV said 'CCS is entering a pivotal decade and the scale of ambition and investment must increase dramatically. It remains essential for hard-to-decarbonize sectors like cement, steel, chemicals, and maritime transport. But as DNV’s report shows, delays in reducing carbon dioxide emissions will place an even greater burden on carbon dioxide removal technologies. To stay within climate targets, we must accelerate the deployment of all carbon management solutions -from industrial capture to nature-based removal - starting today.'
Energy Transition Outlook: CCS to 2050
Source: DNV
