The market for carbon capture, utilization, and storage technologies (CCUS) could be at a turning point following a decade of project cancelations, and concerns about cost and scalability, according to the International Energy Agency.
The global pipeline of CCUS facilities more than doubled in 2021 with more than 100 new projects announced since 2020, IEA data shows. The surge can be attributed to net-zero ambitions, interest in low-carbon hydrogen, and an improved investment environment.
"The unprecedented momentum in 2021 provides cause for optimism that CCUS may finally be shrugging off an underwhelming track record to emerge as an important contributor to addressing the climate challenge," Samantha McCulloch, head of the IEA's CCUS unit, said. "This is both welcome and necessary. If net zero is to remain within reach, CCUS cannot spend another decade sitting on the sidelines of climate mitigation efforts."
Three-quarters of global CCUS projects in development are located in the U.S. and Europe. Growth in the U.S. has been aided by expansion of the 45Q tax credit in 2018, McCulloch said. Billions of dollars for research and deployment of CCUS technologies, meanwhile, is included in the bipartisan infrastructure bill passed by the U.S. Congress earlier this month.
CCUS technologies are crucial for net-zero goals because of the difficulty of decarbonizing heavy industries. Many clean energy advocates do, however, doubt CCUS's scalability and worry about the impact of methane leaks.
"The growth in the project pipeline in 2021 represents a major departure from the years 2010 to 2017, when plans for CCUS facilities were being cancelled and the pipeline of potential projects shrank. This trend only started to reverse in 2018, which saw a net increase of six planned projects," McCulloch said. "Of course, there is no guarantee for success.
"Undoubtedly, not all of the 100 projects announced this year will reach commercial operation. IEA analysis highlights the need for increased policy support together with accelerated efforts to identify and develop CO2 storage resources. Boosting innovation will also be important for faster commercialization of key CCUS technologies and applications."
