The carbon capture, utilisation, and storage market: ready for takeoff

Despite positive progress in the energy transition and the fight against climate change, we confront a stark reality. To stay below 2 degrees warming, we need to eliminate 5 billion tons of expected CO2 equivalent emissions per year by 2030 and 50 gigatons by 2050. 

There is an “easy” way to achieve the world’s climate goals. During COVID we chose to pause much of the world economy and emissions declined by about 3% in 2020. But people are unlikely to choose to de-grow the world’s economy, particularly in parts of the world continuing to lift people out of poverty.

In every credible Net Zero scenario that doesn’t involve choosing lower living standards, half or more of total final energy demand will still be met by fossil fuels in 2050, particularly natural gas.

As the UN Secretary General remarked after the release of the IPCC’s synthesis report, we need an “everything, everywhere, all at once” approach to reach Net Zero. At Baker Hughes we have always taken a portfolio approach to climate-technology solutions. Radically increasing adoption of Carbon Capture, Utilization & Storage (CCUS) is a key element, and one where there is vast room for improvement.

Because last year, global carbon capture activities yielded just 43 million tons (installed capacity today), according to Bloomberg NEF.

The gap between how much carbon is captured or removed today versus how much we need to achieve by 2050 is enormous – but so is the opportunity for carbon technologies. Despite the technology being around for three decades, I believe that the economics, technology, and policy finally are aligning to see exponential growth in CCUS adoption over the next decade.

The global roadmap includes three distinct phases: emissions prevention, emissions capture, and emissions storage. And one that’s not like the others: carbon emissions removals.

The challenge has always been to scale up these solutions for meaningful impact. In the past two years, we’ve seen a dramatic shift in this landscape that promises to change that.

First, we are seeing CCS projects of scale reach FID. At Baker Hughes we supply compression and other turbomachinery equipment to many of the most significant of these projects. To mention just two:

Petronas’ Kasawari project in Malaysia is expected to be the world’s largest offshore CCS facility, able to sequester 3.3MTPA of CO2.

And Santos’ Moomba CCS project in South Australia will see 1.7 MTPA of CO2 stored onshore in depleted natural gas reservoirs.

Second, executives in sectors across energy, hard-to-abate sectors, and beyond tell us that appetite to invest in CCUS is growing rapidly. According to research conducted by the Financial Times’ Longitude team for the Baker Hughes Energy Transition Pulse 2023, the proportion of executives planning to prioritize CCUS in the future is 50% higher than those prioritizing it today.

Given that the evolving policy environment in the US and EU has created incentives to capture emissions across the entire energy value chain, this is not surprising. We anticipate that we will see even more policy to incentivise and require emissions abatement in coming months.

Yet, captured emissions need to be used or stored. Sequestration and storage bring their complexities, such as permitting and liability issues, but these hurdles are not insurmountable – if industry and policymakers are really committed to finding solutions.

Bloomberg NEF forecast that by 2030, 280 MTPA of CO2 would be captured. But as they said themselves, that figure is conservative. With continued progress in creating incentives for capturing carbon from power generation and decarbonising hard-to-abate industries, that represents the very low end of what should be possible.

However, even with widespread adoption of CCUS technology, it alone won’t be enough to reach our climate targets. That’s where Carbon Dioxide Removals (CDR), including Direct Air Capture (DAC) comes in. DAC will only grow in importance to drawdown atmospheric carbon even after the world reaches Net Zero, but at Baker Hughes we are helping to accelerate its growth to commercial scale today. HIF Global, a leading e-fuels company, anticipates potentially deploying our Mosaic DAC technology pilot units at an e-fuels facilities in Chile and Texas. DAC technology, though currently in its infancy, promises to provide the additional firepower we need in our climate fight.

That the CCUS market is finally poised for explosive growth is an incredibly positive development. To make the progress in removing emissions that the world needs, policymakers and the energy sector must continue to collaborate to remove barriers to its growth. At Baker Hughes, we’re proud to be at the forefront of these exciting developments, and we’re committed to driving innovation in CCUS to create a sustainable future for all.

Gastech is at the heart of natural gas, LNG, hydrogen, low-carbon solutions, and climate technologies

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