DNV’s newly published ‘Energy Transition Outlook – CCS to 2050’ report finds that cumulative investment in carbon capture and storage (CCS) is expected to reach about $ 80 billion over the next five years, with CCS capacity likely to quadruple by 2030. To date, growth has been limited and largely associated with pilot projects but a sharp increase in capacity in the project pipeline indicates that CCS is at a turning point. The immediate rise in capacity is being driven by short-term scale up in North America – which has significant onshore geological storage potential, with about 80% of its storage capacity in saline aquifers and 20% in depleted oil and gas fields – and Europe, with natural gas processing still the main application for the technology.
In the longer term, CCS is crucial for addressing sectors that are challenging to decarbonise, such as steel and cement production. These hard-to-decarbonise industries are forecast to be the main driver of growth from 2030 onwards, accounting for 41% of annual CO2 captured by mid-century. Maritime onboard capture is expected to scale from the 2040s in parts of the global shipping fleet. As the technologies mature and scale, the average costs will drop by an average of 40% by 2050.
Ditlev Engel, CEO, Energy Systems at DNV said “Carbon capture and storage technologies are a necessity for ensuring that CO2 emitted by fossil-fuel combustion is stopped from reaching the atmosphere and for keeping the goals of the Paris Agreement alive.
“But [despite] all this advancement, the trajectory of CCS deployment remains a long way off where it must be to deliver net zero by 2050. Economic headwinds in recent years have put pressure on this capital-intensive technology and corrective action will need to be taken by government and industry if we are to close the gap between ambition and reality.”
CCS will grow from 41 MtCO2/yr captured and stored today to 1300 MtCO2/yr in 2050, which will be 6% of global emissions. However, CCS will need to scale to six times this level to reach the amount outlined in DNV’s Pathway to Net Zero Emissions.
The roll-out of CCS is reliant on policy support and recent political turmoil and shifting budgetary priorities pose a significant risk to future deployment. Europe’s strong price incentives will lead it to overtake North America in CCS deployment.
DNV forecasts that carbon dioxide removal (CDR) will capture 330 MtCO2 in 2050 – one-quarter of total captured emissions. Bioenergy with CCS (BECCS) is generally the cheaper CDR option and will be used primarily in renewable biomass for power and manufacturing.
Direct air capture (DAC) costs on the other hand remain high at around $350/tCO2 through to 2050, but voluntary and compliance carbon markets still ensure the capture of 32 MtCO2 in 2040 and 84 MtCO2 in 2050.
Jamie Burrows, Global Segment Lead CCUS, Energy Systems at DNV said “To stay within climate targets, we must accelerate the deployment of all carbon management solutions – from industrial capture to nature-based removal – starting today.”
