Carbon Storage’s Spending To Reach $50bn In Three Years
Rystad Energy has projected the global spending by the Carbon Capture and Storage (CCS) service sector to exceed $50 billion in the next three years.
Operattors in the Carbon capture and storage (CCS) sector are involves in capturing, transporting and storing greenhouse gas emissions from fossil fuel power stations, energy intensive industries, and gas fields by injecting the captured greenhouse gases back into the ground.
The expenditure by these operators will be on a variety of services related to the installation of the capture unit, transportation of the carbon dioxide (CO2), and storage according to a study by Rystad Energy
The energy research organisation, added that CCS would quadruple between 2022 and 2025, indicating that total spending on announced commercial projects in 2022 will hit $4.4 billion, up from $2.8 billion in 2018.
For this period, Rsytad analysts explained that Engineering, Procurement, Construction and Installation (EPCI) costs would drive the expenditure, taking about $35 billion to the $55 billion total by 2025.
Annual EPCI spending is expected to hit $12 billion in 2025, over 300 per cent increase from the $2.8 billion projected for this year.
It noted that spending would nearly triple in 2023, topping $11 billion for the year.
The organisation stressed that an additional $18 billion and $19 billion would be added in 2024 and 2025, respectively, bringing the total to $52 billion by the middle of the decade.
It said: “These totals only include announced projects, assuming all projects move ahead as planned, and do not account for pilot or demonstration-only developments.
CCS technology is viewed as a fundamental component of the societal decarbonisation required for a successful energy transition.
Rystad Energy’s Senior Analyst,
Lein Mann Hansen said: “Although the technology dates back to the 1970s, the number of CCS project announcements has surged in the last two years, and service sector spending is expected to go through the roof in the coming years as a result,”
Europe and North America will drive spending, with 63 out of the 84 announced commercial CCS projects expected to start operations by 2025 situated in these two regions, the analysts said.
Rystad analysts say 56 commercial CCS projects are already in operation around the world, capable of capturing up to 41 million tonnes of CO2 per annum (tpa) across various industries.
However, based on previously announced projects, nearly 140 CCS plants could be operational by 2025, capturing at least 150 million tpa of CO2 if all projects proceed as planned.
It added: “These projects are currently in various stages of development, including feasibility, concept and construction. Almost two-thirds of the total service spending will go towards equipping the facility with the CO2 capture component and maintaining operations.”
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