CCS widely seen having major transition role, but challenges remain
Carbon capture is seen as a key component of future global low-emissions pathways, for use in hard-to-decarbonize sectors. However, CCS has a patchy track record, with only few projects advancing in recent years. Challenges include complex projects, unclear business models, uncertain policy and doubts over effectiveness.
Costs – the focus of this Energy Transition Service report – are critical, and vary widely (from ~$15/ton to $160/ton) depending primarily on emissions source. CO2 capture typically makes up the majority of value-chain costs. These should fall due as scale grows and technology advances, yet the pace of decline may prove slow. Direct air capture could also play a wide role, and costs may decline faster, aided by modularity – but current costs have far to fall.
Policy support is growing, and is vital for CCS to scale up and compete against low-carbon alternatives. Governments are increasing backing for CCS using a range of policy levers, especially in North America and Europe.
At the same time, oil and gas firms’ interest in CCS has risen sharply, with all peer groups expanding activity as firms seek to cut their own emissions and to develop CCS hubs with industrial partners. However, across the industry most projects remain at an early stage, with only a few schemes – typically those involving simpler capture from gas-related emissions – currently under construction.
You can learn more about the “CCS Costs in Focus” report – and our Energy Transition Service – in the executive summary.
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The “CCS Costs in Focus” report is part of the Energy Transition Service which helps guide the energy industry through the low-carbon transition. We offer an unparalleled combination of intelligence, data, independent analysis and direct client engagement. The Energy Transition Service helps energy firms, investors and governments understand how the low-carbon energy transition is unfolding, with a focus on key technologies, costs, market developments and policy drivers.