Carbon Capture, Utilization, and Storage Market by Service (Capture, Transportation, Utilization, and Storage), Technology (Pre-combustion Capture, Oxy-fuel Combustion Capture, and Post-combustion Capture), End-use (Oil & Gas, Power Generation, Iron & Steel, Chemical & Petrochemical, Cement, and Others), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021–2028

Global Carbon Capture, Utilization, and Storage Market Analysis

The global carbon capture, utilization, and storage market accounted for $1,912.9 million in 2020 and is predicted to grow with a CAGR of 13.7%, by generating a revenue of $5,306.7 million by 2028.

Market Synopsis

Carbon capture, utilization, and storage market is gaining huge popularity owing to its role in reducing the emission of harmful greenhouse gases. For instance, carbon capture, utilization, and storage (CCUS) technology captures the carbon dioxide emissions from coal-fired power plants which is then utilized or reused and stored to prevent its emission into the atmosphere. Tackling the emissions from existing industrial and power plants can reduce 600 billion tons of carbon dioxide emissions in next five years.

However, technology is expensive as more energy is needed to concentrate CO₂ molecules that can be captured and utilized further. In addition, the cost of purchasing the equipment for capturing CO₂ and its compression is high. These factors are anticipated to restrain the carbon capture, utilization, and storage market size during the analysis timeframe.

The role of CCUS in sustainable development and in transition to net-zero emission is estimated to attract excellent growth opportunities. This is majorly owing to the role of CCUS in reducing the carbon emissions across the energy systems which is technically expensive. In addition, carbon capture, utilization, and storage can offset the carbon emission from outside the energy sector. Also, CCUS accounts for 15% of cumulative CO₂ reduction worldwide.        

According to regional analysis, the North America carbon capture, utilization, and storage market accounted for $807.1 million in 2020 and is predicted to grow with a CAGR of 13.9% in the projected timeframe.

Carbon Capture, Utilization, and Storage Overview

Carbon capture, utilization, and storage is an important technology that plays a major role in reducing the carbon dioxide emissions from fossil-fuel powered power plants as well as from various industrial activities. CCUS technology is vital in offering dispatchable and low-carbon electricity. By 2040, CCUS is estimated to generate 5% of the global power. Along with reducing the emissions from fossil fuels such as oil, coal, and natural gas-based power plants, CCUS can also capture the carbon emissions from concrete, cement, or aggregate plants from the construction sector. Hence, the ambitious targets for climate neutrality by preventing CO2 emissions into the atmosphere can be achieved. 

COVID-19 Impact on Carbon Capture, Utilization, and Storage Market

The global crisis caused by COVID-19 pandemic has driven the world into deep recession. This has led to slump in economic activities that has negatively affected the carbon capture, utilization, and storage market. This is majorly owing to shift in government focus and investments in the healthcare sector. The global economy is set to shrink along with significant decline in the gross domestic product (GDP) in every country affected by COVID-19 pandemic. The International Energy Agency (IEA), the Paris-based autonomous intergovernmental organization, states that the investments in clean energy technologies including CCUS could plunge by as much as 20%. In addition, delays and cancellation in the new CCUS projects owing to economic downturn as majority of the oil & gas companies involved in CCUS projects have faced significant reductions in the capital spending in 2020.

Various government initiatives and plans to invest massively for economic recovery and to stimulate investments in carbon capture, utilization, and storage market are estimated to generate huge growth opportunities. For instance, significant increase in the number of new funding announcements in CCUS projects across the world is estimated to drive carbon capture, utilization, and storage market growth post-pandemic. For instance, in March 2020, the UK government announced an investment of USD 995 million for the development of CCUS infrastructure. This investment will facilitate the development of CCUS plants in at least two industrial locations along with gas-fired power plants. In addition, in September 2020, the U.S. government announced USD 72 million in CCUS grants which is estimated to boost the carbon capture, utilization, and storage market share post-pandemic.  

Reducing Carbon Emissions from Power Sector to Drive the Market Growth

The power plants fueled by coal and gas dominate the global electricity generation sector. Despite the advent of renewable energy sources for power generation, the power generated from fossil fuel still dominates the energy sector. Coal is the largest source of power generation followed by gas. Hence, power is the largest carbon emitting sector that accounts for more than 40% of carbon emissions. Hence, to lower the emissions from such power plants, the carbon capture, utilization, and storage technology plays a vital role. For instance, retrofitting the power sector with CCUS technologies can help in reducing the carbon emissions from the existing plants. Hence, this technology plays a major role in promoting energy security and meeting net-zero climate objectives and enhancing the portfolio of low-carbon supply sources. IEA estimates that by 2040, CCUS-equipped plants will provide 1900 TWh of global power. These factors are estimated to drive the carbon capture, utilization, and storage market demand during the forecast period.  

To know more about global carbon capture, utilization, and storage market drivers, get in touch with our analysts here.

High Capital Investment Cost and Implementation Cost to Restrain Market Growth

High implementation cost is one of the major barriers for the implementation of CCUS technology across the world. For instance, the cost of carbon capturing, and its compression is high as it decreases the efficiency of power plants and increases the water requirement. This creates a major issue for the power plants that are already facing scarcity of water. In addition, research & development cost associated with the full-scale deployment of carbon capture, utilization, and storage is estimated to restrain the market growth during the forecast period. 

Increase in the Number of CCUS Projects in Asia-Pacific Region to Generate Excellent Growth Opportunities

The carbon capture, utilization, and storage technologies are set to play a major role towards clean energy transitions in Asia-Pacific region. This is majorly owing to the role of CCUS technology in addressing the carbon emissions from existing power plants & industrial assets. This will also promote the development of new economic opportunities for producing low carbon hydrogen and ammonia. For instance, as stated on June 22, 2021, in the Argus Media, the independent media organization, Japan drives the carbon capture, utilization, and storage projects in the Asia-Pacific region. This is majorly owing to growing investments and funding for these projects to achieve carbon neutrality by 2050. For instance, in June 2021, the Japanese government proposed $10 billion funding to support renewable and low-cost projects under the Asia Energy Transition Initiative. 

To know more about global carbon capture, utilization, and storage market opportunities, get in touch with our analysts here.

Source: Research Dive Analysis

The capture sub-segment is anticipated to have a dominant market share and generate a revenue of $3,753.2 million by 2028, growing from $1,318.3 million in 2020. Carbon capture is the first step in the CCUS technology which is an integral process to reduce the emission of carbon dioxide from various industrial processes. Some of the widely adopted carbon capture technologies are chemical absorption, physical separation, chemical looping, calcium looping, and others. Carbon capture process can be applied to any large-scale emission process such as coal-fired power plants, oil & gas plants, cement industry, and iron & steel industry for capturing CO₂ from the source and preventing its release into the atmosphere. These factors are estimated to drive the growth of capture sub-segment during the analysis timeframe.

The utilization sub-segment is anticipated to show the fastest growth and shall generate a revenue of $564.6 million by 2028, growing from $195.9 million in 2020. The captured CO₂ finds variety of applications which include direct used of CO2 which is not chemically altered for various chemical and biological processes. Some of the potential applications include the use of CO₂ for yield boosting, heat transfer fluids, and in solvents. For instance, the International Energy Agency, the Paris-based Organization for Economic Co-operation and Development, at present 230 Mt of CO₂ is utilized for producing fertilizers and for enhanced oil recovery process.

Source: Research Dive Analysis

The post-combustion capture sub-segment is anticipated to have a dominant market share and generate a revenue of $2,450.4 million by 2028, growing from $873.5 million in 2020. The post-combustion process involves capturing CO₂ from flue gas which is generated via combustion of fuels such as coal or natural gas. As stated in National Energy Technology Laboratory, which delivers integrated solutions to enable transformation to a sustainable energy future, out of 4 trillion kilowatt hours of electricity generated in 2019 in the U.S., 38% of it was generated from natural gas and 23% was generated from coal. As more than 60% of electricity is generated from fossil fuel power plants, deployment of post-combustion capture technologies is vital to minimize the CO₂ emissions.

The oxy-fuel combustion capture sub-segment is anticipated to show the fastest growth and shall generate a revenue of $1,920.2 million by 2028, growing from $663.2 million in 2020. The oxy-fuel combustion capture involves the process of burning the fuel with nearly pure oxygen instead of air. This method is gaining popularity as it produces exhaust gas which is mainly water vapor and CO₂ which can be easily separated for the production of high purity CO₂ stream. This process successfully removes all the nitrogen from the air yielding approximately 95% oxygen.

Source: Research Dive Analysis

The oil & gas sub-segment is anticipated to have a dominant market share and generate a revenue of $2,917.6 million by 2028, growing from $1,075.8 million in 2020. In oil & gas industry, the carbon capture, utilization, and storage technology is widely used to prevent the release of greenhouse gases into the atmosphere. The oil & gas industry stores the carbon dioxide for the deep, offshore, or onshore geological formations, where it is used for enhanced oil recovery. For instance, in 2019, around 24 million tons of CO₂ was captured, stored, and utilized by the oil & gas sector which was majorly extracted from natural gas processing plants. As per the Energy Information Administration (EIA), which offers official energy statistics from the U.S., natural gas generation is estimated to show a growth rate of approximately 2.7% every year between 2012 and 2040. This is estimated to account for 30% of global energy generation by 2040. Hence, the utilization of captured CO₂ in oil & gas sector is estimated to boost the demand for carbon capture, utilization, and storage market in the upcoming years.   

The iron & steel sub-segment is anticipated to show the fastest growth and shall generate a revenue of $721.4 million by 2028, growing from $232.2 million in 2020. Iron & steel production process is one of the leading carbon emission sources. For instance, steel mills comprise of number of furnaces and subunits that are involved in the emission of carbon dioxide. Among these, blast furnaces and on-site power plants emit more CO₂. Hence, to reduce the carbon footprint and to promote sustainable development in iron & steel sector, adoption of CCUS technologies is gaining huge popularity.

Source: Research Dive Analysis

The Market for Carbon Capture, Utilization, and Storage in North America to be the Most Dominant

The North America carbon capture, utilization, and storage market accounted $807.1 million in 2020 and is projected to grow with a CAGR of 13.9%. North America region leads the world in carbon capture, utilization, and storage with enhanced oil recovery (EOR) contributing to the significant growth. This is majorly owing to legal and regulatory landscape that focuses on incorporating CCUS in oil & gas sector across federal, state, and provincial levels. In addition, the Biden-Harris Administration’s goal of net zero emissions by 2050, is anticipated to drive the CCUS demand in this region. For instance, as stated on October 18, 2021, in the Gas World, the leading news portal for global industrial gas sector, the US Department of Energy (DOE) announced a funding of $20 million in October 2021, for four CCUS projects in the U.S. In addition, the emission reduction policy introduced by the Canadian government in July 2015, that places limit on CO₂ emissions from coal power plants is estimated to boost the CCUS market demand.  

The Market for Carbon Capture, Utilization, and Storage in Europe to Show the Fastest Growth

The Europe carbon capture, utilization, and storage market accounted $522.6 million in 2020 and is projected to grow with a CAGR of 14.3%. The ambitious target set by European Union that focuses on at least 40% reduction of greenhouse gases by 2030 is estimated to drive the carbon capture, utilization, and storage market size in the Europe region. Decarbonizing the electricity supply, industrial process such as oil & gas sector and others is a major growth driving factor. At present there are two large scale CCUS projects operational in Norway that captures CO₂ emissions from natural gas processing sector. The combined CO₂ capturing capacity of these two plants is 1.7 Mt/year. The International Energy Agency (IEA), the Paris-based autonomous intergovernmental organization established in 1974, states that CO₂ capture is estimated to rise to 35 Mt in 2030, 350 Mt in 2050, and to more than 700 Mt in 2070 in Europe to boost sustainable development.

Competitive Scenario in the Global Carbon Capture, Utilization, and Storage Market

Project development and partnership are common strategies followed by major market players.

Source: Research Dive Analysis

Some of the leading carbon capture, utilization, and storage market players are Royal Dutch Shell plc, Fluor Corporation, Mitsubishi Heavy Industries, Ltd., Linde plc, Exxon Mobil Corporation, JGC Holdings Corporation, Schlumberger Limited, Aker Solutions, Honeywell International Inc., and Halliburton.

Porter’s Five Forces Analysis for the Global Carbon Capture, Utilization, and Storage Market:

• Bargaining Power of Suppliers: The bargaining power of suppliers is moderate as the carbon capture, utilization, and storage producers largely depend on raw material suppliers for purchasing the necessary equipment required for setting up and deploying CCUS project. However, government investments in CCUS projects to achieve climate neutrality goals, decreases the bargaining potential of suppliers to some extent. 
  Thus, the bargaining power of suppliers is moderate.
• Bargaining Power of Buyers: The bargaining power of buyers is moderate as the buyers are eligible for various government subsidies, tax credits, and funding required for setting up the carbon capture, utilization, and storage plants.  
  Thus, buyer’s bargaining power will be moderate.
• Threat of New Entrants: New entrants entering this market have to invest significant capital amount for carbon capture, storage, and utilization technology. Also, the new players have to adhere to the government norms and regulations for retrofitting the CCUS across oil & gas and industrial other industrial processes. Active participation of government of several countries in CCUS projects provides help to the new entrants to enter this market. 
  Thus, the threat of the new entrants is moderate.
• Threat of Substitutes: The adoption of renewable energy decreases the demand for CCUS technology as this technology is retrofitted to natural gas, coal fired, or fossil fuel-based power plants. Growing focus towards adoption of renewable energy sources increases the threat of substitution to some extent. 
  Thus, the threat of substitutes is moderate.
• Competitive Rivalry in the Market: The companies operating in this market are focusing on new projects, partnerships, and increasing their CO2 capturing capacity. 
  Therefore, competitive rivalry in the market is moderate.