Companies Acknowledge Potential of CCS, Need Government Incentives

Companies around the globe have been looking to deploy carbon capture and storage (CCS) technologies in growing numbers. The potential of CCS in helping corporate sustainability efforts and decarbonizing the economy attracts many companies. The number of CCS project worldwide have been steadily increasing as all CCS facilities in operation or under construction had a capturing capacity of around 40 Mt in 2021.

As decarbonization scenarios from the International Energy Agency (IEA) gets more ambitious, the part CCS plays becomes bigger. If the IEA’s “Announced Pledges Scenario” (APS) comes to fruition, and all governments’ climate commitments are met in full and on time, CCS capacity will grow to 350 Mt per year by 2030.

The capacity will climb further under the Net Zero Emissions by 2050 Scenario (NZE) to around 1.7 Gt per year in 2030. The IEA calculates that CCS could amount to 18% of the emissions reduction needed between 2030 and 2050.

The cost of CCS has so far been the biggest challenge to scale up the technology. However, if the industry wants to reduce emissions, CCS is still one of the cheapest options. For instance in ammonia and ethanol production, while incorporating CCS raises costs by 20%-40%, electrolytic hydrogen increases the cost by 50%-115%. This is why CCS will likely to become attractive for carbon intense industries such as cement, fertilizers and steel. Moreover, the technology is also attractive because of its potential of pairing with bioenergy and create negative emissions.

Despite its perceived position to play a key role in energy transition, CCS is still at a very early stage of development. That’s why corporations rely on government incentives to reduce costs. Governments acknowledge CCS’s potential and many try to embed CCS initiatives in their climate plans.

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