Carbon capture, utilization and storage (CCUS) developers continue to struggle with the economics of their planned projects, according to Wood Mackenzie.
“We are tracking 1,200 announced projects globally, but only 10% of those are now operational," said Peter Findlay, WoodMac's research director and head of CCUS economics. “More than 60% of those are in the early stage of development, and they would need a lot more investment and market certainty to move into advanced development.”
There is a need for appropriate CCUS regulation and support, he added, with present incentives not great enough. However, there are potential opportunities for utilization products, for instance in e-hydrocarbons, minerals and agriculture, and fuel cells.
“Another case for optimism is the current funding and interest in the market. The US Department of Energy recently announced more than $2 billion in CCUS funding and a lot of major players are getting into the market," he said. “As competition increases, costs should come down; we estimate costs will fall 50% by 2050 in real terms.”
But other projects may take decades from initiation to completion, with the current system of incentives not supportive of these timelines.
“If a policy may not be in place in 10 years, developers don’t have the certainty they need to move forward and invest," Findlay concluded.
