Carbon Capture and Storage Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Carbon Capture and Storage Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The carbon capture and storage market was valued at over 1.7 billion ton in 2021, and the market is projected to register a CAGR of greater than 10% during the forecast period (2022-2027).

The major factor driving the market are the emerging demand for CO2 injection techniques for enhanced oil recovery (EOR) and strict government norms toward GHG emissions.

Huge CCS technologies implementation costs and growth in shale investments are expected to hinder the growth of the market studied.

Augmenting prominence for bioenergy carbon capture and storage (BECCS) is likely to act as an opportunity in the future.

Carbon dioxide stored in deep, onshore, or offshore geological formations uses CCS technologies for enhanced oil recovery that have been developed in the oil and gas industry.

Carbon dioxide is extensively used in the oil industry for enhanced oil recovery (EOR) from mature oilfields. When carbon dioxide is inserted into an oilfield, it can mix with the crude oil, triggering it to swell and drop its viscosity, helping to maintain or raise the pressure in the reservoir. The combination of these processes permits more of the crude oil to flow to the production wells.

In other circumstances, the carbon dioxide is not soluble in the oil. Here, the injection of carbon dioxide raises the pressure in the reservoir, helping to sweep the oil toward the production well.

In Texas (United States), for more than three decades, carbon dioxide has been used in enhanced oil recovery projects. EOR constitutes over 20% of total oil production, and some fields achieve recoveries of nearly 70%.

Kyoto Clean Development Mechanism is mostly applied among the OPEC Nations, which support CCS technology. For instance, Abu Dhabi National Oil Company (ADNOC) achieved dramatic reductions in gas flaring. ADNOC has reduced the volume of natural gas flared by more than 72% since 1995.

All the aforementioned factors are likely to increase the usage of carbon capture and storage technology in the oil and gas segment during the forecast period (2022-2027).

The North American region dominated the global market. The growing demand for clean technology, accompanied by the growing use of CO2 in EOR practices, is likely to drive the CCS market in the countries like United States and Canada.

Chemical production, hydrogen production, fertilizer production, natural gas processing, and power generation are among the industries in United States where CO2 is captured and injected. These facilities capture and inject CO2 to store it underground in geologic formations or to use it to boost oil production from aged oil fields, a process known as enhanced oil recovery (EOR).

Since at least 1997, the US Department of Energy's Fossil Energy and Carbon Management Research, Development, Demonstration, and Deployment program (FECM) has financed research and development (R&D) in components of CCS.

The government has funded USD 7.3 billion for DOE CCS-related programs since FY2010, including annual increases in recent years. The country allocated USD 750 million to FECM in FY2021, with USD 228.3 million going to CCUS.

In December 2020, the Canadian government proposed regulations for the Clean Fuel Standard. Projects that employ CCS to minimize the lifecycle carbon intensity of fossil fuels are one of the approaches to earn compliance credits for the Clean Fuel Standard. In addition, Canada's recent Budget 2021 suggested an investment tax credit for capital spent in CCUS projects, with a target of lowering CO2 emissions by at least 15 Mtpa, which would take effect in 2022.

Therefore, all the above projects and initiatives may significantly enhance the usage of carbon capture and storage technology in North America during the forecast period (2022-2027).

The carbon capture and storage market is consolidated in nature. The major players in the market (not in a particular order) include Occidental Petroleum Corporation, Exxon Mobil Corporation, Dakota Gasification Company, NRG Energy Inc., and Air Liquide, among others.

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