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 capturing 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 in Figure 1.
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.
Key CCUS business use, cases & business models
CCUS is not the biggest pillar of the transition, nor a replacement for action in many other areas (renewables, electrification, and energy efficiency to name three) but most future modelled pathways that avoid catastrophic climate change rely on CCUS technology to contribute significantly to decarbonisation in some or all the four areas shown in Figure 2.
Most of these prospective business models are covered in more detail in a series of articles in the remainder of this AFRY Insights Magazine.
CCUS use cases & business models overview
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? The global project pipeline by 2030 has reached 326Mt based on AFRY internal databases – although other market commentators such as the IEA and the GCCSI 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. For context, that is the same size as the global oil market today!
Companies too are committing material capital to the opportunity. Exxon Mobil’s €4.5bn purchase of Denbury, a US-focused CO2 transport and sequestration company in Q3 2023, was a stand-out transaction but many energy players and utilities are rapidly positioning. CCUS is a technology with a long history but far too slow a deployment to contribute materially to mitigating the developing climate crisis. The upcoming AFRY Insight articles show how emerging exciting business models
suggest a technology whose time has come.
Figure 3. Announced regional capture capacity by 2030 (mtpa)
