United Kingdom – Through 2022, the pipeline of carbon capture, utilization, and storage (CCUS) projects worldwide has grown by more than 50%, and announcements made in every sector demonstrate great momentum. However, more is required if businesses and nations are to achieve their net zero goals.
Wood Mackenzie mapped out forecasts for the coming year based on Lens CCUS’s insightful analysis.
The CCUS pipeline is expanding quickly worldwide. 2023 will see the creation of 166 Mtpa of potential CO2 storage capacity through a mix of stand-alone projects and larger hubs. However, a sizable capture-storage gap is exists because only 98 Mtpa of capture capacity is aiming for FID.
Enhanced policy backing
The economics of CCUS projects are heavily influenced by governmental policy. In certain situations, it has contributed more than 50% of the budget needed to launch initiatives. This will carry on in 2023 and reach other areas.
Asia will have greater policy impetus, for instance, after historically trailing other regions. Regulations and incentives for CCUS will be finalized by Malaysia and Indonesia, with an initial emphasis on decarbonizing natural gas production. India and Japan will progress with their individual CCUS roadmaps. Finally, it is anticipated that China and Thailand would advance their financial strategy.
Positive legislative changes enacted in the US in 2022, including the Inflation Reduction Act, will allow businesses to continue forward with projects in 2023.
Companies will want to establish presence in the most advantageous CCUS hubs because location is crucial to the disposal of carbon. However, implementing this naturally requires years of work from devoted development teams.
Wood Mackenzie anticipates a surge in M&A in 2023 as businesses compete for first-mover advantages in new regions. Deals made to date, such those between E.ON and Horisont Energi in Europe and Chevron-Talos-Carbonvert in the US GoM, give a preview of what’s to come.