Capturing value
Emerging CCUS business models are changing the game for a long-neglected pillar of the net-zero economy.
Stuart Murray
Christian Wasserfuhr
What is CCUS?
Carbon capture utilisation and storage (CCUS) describes a suite of technologies used to capture carbon dioxide (CO2) that would usually be emitted from a physical process. The CO2 is then either utilised to create products with additional value or put into long-term storage to prevent its release into the atmosphere.
The CCUS chain can be considered as consisting of five key parts as shown below.
CCUS chain
A complex chain, but not new
Each part of the CCUS value chain is an interesting area in its own right, with different technology development, value drivers and profit pools. However, the individual elements of the CCUS value chain are not recent inventions. Carbon capture as an industrial scale chemical process has been around for almost 100 years and is an everyday process in many fertiliser, gas processing and petrochemical plants. It is estimated that there are 300-400Mt of CO2 being captured each year at industrial sites globally. Although many sites that capture the CO2 also use it onsite, many millions of tonnes of CO2 are also transported globally in pipes and trucks each year.
The injection of CO2 into sub-surface geological structures is also not particularly new – CO2 has been captured, transported, and injected into US oil fields since the 1970s as a way of enhancing the recovery ratio of those assets.
However, what is novel in CCUS is the scale-up of individual elements (by 1 or 2 orders of magnitude at a site), the linking of complex chain elements with new players, and the emerging array of new business models.
CCUS key climate areas
Key CCUS business use, cases & business models
CCUS is not the biggest pillar of the green-energy transition, nor a replacement for action in many other areas (renewables, electrification, and energy efficiency to name three) however most future modelled pathways that aim to avert catastrophic climate change rely on CCUS technology to contribute significantly to decarbonisation in some or all the four key climate areas.
Most of these prospective business models are covered in more detail in a series of articles, within this edition of AFRY Insights magazine.
The ‘size of the prize’?
The CCUS market today is reasonably small. Globally, carbon capture and storage projects captured ~40Mt CO2 in 2023, with <5Mt captured in Europe but noting that the capacity has been built gradually over 40+ years. As noted previously, the global carbon capture utilisation market is larger, estimated at 300-400Mtpa of CO2 once captive/onsite capture and utilisation is accounted for, with around half of this in the fertiliser industry.
So, what might the future hold? By 2030, the global project pipeline will have reached 326Mt based on AFRY databases, and although other market commentators such as the IEA and the GCSI report slightly different numbers, all point to a rapid potential development of the market over the next decade.
The need for a continuous rapid scale up in CCUS to reach climate goals is well illustrated by leading scenario modelling. IEA’s global energy and climate modelling shows a scale up from ~40Mtpa in 2023 to reach up to ~6000Mtpa by 2050.
The need for CCUS continues into the second half of this century – some longer-term scenarios developed by the IPCC for example show carbon capture volumes reaching >10,000Mtpa. To illustrate the size of such a potential market, the physical CO2 market could reach >€2000Bn per annum if carbon prices keep rising to >$200/tCO2. To provide some context: That would be the same size as the global oil market today!
Companies too are assigning material capital to the matter. Exxon Mobil’s €4.5bn in Q3 2023 of Denbury, a US-focused CO2 transport and sequestration company, was a stand out transaction, however many energy players and utilities are rapidly positioning themselves.
CCUS is a technology with a long history but far too slow a deployment to contribute materially to mitigating the developing climate crisis. The featured AFRY Insights articles show how emerging and exciting business models suggest technologies whose time has come.
Announced regional capture capacity by 2030 (Mtpa)
