What is CCUS?
CO₂ emissions originate from industrial processes (cement, steel, refining), energy generation (coal, gas, biomass), and natural processes (e.g., bioethanol fermentation). Beyond large stationary sources, transportation, agriculture, and small-scale combustion also contribute to emissions. Carbon capture technologies intercept CO₂ before atmospheric release to mitigate these impacts.
Current capture methods achieve up to 90% efficiency, significantly reducing emissions from major sources. However, challenges include high energy demands, system integration, and scalability. Research focuses on enhancing materials, lowering costs, and expanding capture to smaller and diffuse emission sources.
CO₂ utilisation transforms captured emissions into valuable products, mitigating greenhouse gases while creating economic opportunities. Though currently a niche market, it is poised for significant growth, especially in building materials.
Mineralisation: CO₂ reacts with alkaline materials to form stable carbonates, used in concrete and aggregates. This process offers permanent carbon storage and supports sustainable construction.
Chemical Conversion: CO₂ serves as a feedstock for fuels and chemicals like methanol, syngas, and polymers. Advances in catalysis are improving efficiency and integration into the chemical value chain.
Biological Processes: CO₂ supports microalgae cultivation and controlled plant growth, producing biofuels, animal feed, and bioproducts, contributing to a circular carbon economy.
CO₂ storage is a key component of carbon capture and storage (CCS), involving the injection of captured CO₂ into geological formations for long-term sequestration, leveraging natural trapping mechanisms that have contained hydrocarbons for millions of years.
Depleted Oil & Gas Reservoirs & Deep Saline Aquifers: These formations offer vast storage potential, with proven containment capacity in oil and gas reservoirs and widespread availability in saline aquifers, which could store trillions of tonnes of CO₂ globally. Extensive exploration data enhances predictability and safety
Trapping Mechanisms: CO₂ is securely stored through multiple processes: structural trapping (sealed beneath impermeable cap rocks), residual trapping (immobilised in rock pores), solubility trapping (dissolved in formation water), and mineral trapping (reacting with minerals to form stable carbonates). These mechanisms collectively enhance long-term sequestration and minimise leakage risks.
Who are the End-Users of CCUS?
Power Industry – Electricity generation accounts for one-third of global CO₂ emissions. The CCUS market is projected to grow from $0.91B (2022) to $3.34B (2040) (CAGR: 7.5%), peaking at $12.26B in 2030 before declining due to coal plant closures.
Heavy Industry (Cement, Steel, Chemicals) – These industries produce 8B tonnes of CO₂ annually, with CCUS market growth expected from $0.24B (2022) to $4.94B (2040) (CAGR: 18.2%). Cement CCUS alone may grow from $0.13B (2022) to $4.3B (2030) (CAGR: 36.8%).
Hydrogen Production – With blue hydrogen demand projected to reach 530 MTPA by 2050, CCUS in hydrogen could grow from $0.16B (2022) to $7.08B (2040) (CAGR: 23.4%), led by the US, EU, and APAC.
Bioenergy CCS (BECCS) – Capturing biogenic CO₂, BECCS is seen as a net-negative emissions solution, with the market forecasted to expand from $0.28B (2022) to $8.51B (2040) (CAGR: 20.9%).
Oil & Gas Industry – Oil and gas operations contribute 9% of global CO₂ emissions, with CCUS potentially capturing 33%. The market is expected to grow from $82.3M (2022) to $2.43B (2040) (CAGR: 20.7%).
CCUS Clusters & Hubs – Shared CO₂ transport and storage could lower costs, with the market reaching $2.78B (2030) before adjusting to $0.66B (2040).
Waste-to-Energy CCS – Global waste is projected to reach 3.4B tonnes by 2050, with CCUS helping to mitigate emissions. The market is forecasted to grow from $0.04B (2024) to $0.85B (2030) before stabilizing at $0.55B (2040).
Direct Air Capture (DACCS) – While DACCS faces high energy demands, incentives like the US Inflation Reduction Act (IRA) are driving expansion. The market could grow from $0.8B (2024) to $10.68B (2040) (CAGR: 17.6%).
CCUS Technologies and Maturity Levels
Chemical Absorption (TRL 7–9) – Uses amine-based solvents in a two-column system for CO₂ absorption and release, applied in power, fuel transformation, and industrial production.
Physical Absorption (TRL 6–9) – Uses liquid solvents like Selexol and Rectisol for CO₂ absorption in natural gas processing, ethanol, methanol, and hydrogen production.
Physical Adsorption (TRL 5–8) – Captures CO₂ using solid surfaces such as activated carbon, zeolites, and metallic oxides via TSA, PSA, and VSA methods.
Oxy-Fuel Combustion (TRL 5–7) – Burns fuel with pure oxygen, producing CO₂-rich flue gas for easier capture, though oxygen production remains energy-intensive.
Calcium Looping (TRL 5–6) – Uses lime (CaO) and calcium carbonate (CaCO₃) reactions for CO₂ separation, with key applications in cement and steel industries.
Chemical Looping (TRL 4–6) – Uses metal oxides to transfer oxygen between reactors, producing concentrated CO₂ for storage.
Cryogenic Separation (TRL 5–8) – Cools acid gas to extremely low temperatures, liquefying CO₂ for separation.
Direct Air Capture (DACCS) (TRL 6–9) – Captures CO₂ directly from the atmosphere.
Membrane Separation (TRL 5–8) – Uses polymeric and inorganic membranes to selectively filter CO₂ from gas streams.
Other Techniques (TRL Varies) – Includes Allam Cycle, Skymine, dehydration, and indirect coal liquefaction, with varying levels of implementation.
CDR Solutions: Nature-Based Removals
CDR Solutions: Tech-Based Removals
Carbon Credits and The Carbon Market
A carbon credit is a tradable unit that represents one metric ton of carbon dioxide (CO2) or its equivalent in other greenhouse gases (GHGs) that has been reduced, avoided, or removed from the atmosphere. These credits serve as a financial instrument in both compliance and voluntary carbon markets, allowing entities to offset their emissions or meet regulatory requirements.
Mechanism
Carbon credits are traded in either compliance or voluntary markets.
- Compliance markets (e.g., EU ETS, California Cap-and-Trade) are government-regulated and enforce legally binding reduction targets.
- Voluntary markets (e.g., Verra’s VCS, Gold Standard) let companies buy credits to meet corporate sustainability goals.
- Credits may have different labels (CER, VER, VCU) based on the issuing registry and standards.
Action
Carbon credits address emissions through avoidance, reduction, or removal:
- Avoidance prevents emissions that would otherwise occur (e.g., renewable energy replacing fossil fuels).
- Reduction lowers emissions in current processes (e.g., improving industrial efficiency).
- Removal extracts CO₂ from the atmosphere (e.g., afforestation, Direct Air Capture).
- Removal credits often offer the most robust long-term mitigation.
Process
Carbon credits can be generated through nature-based, technology-based, or hybrid methods:
- Nature-based (e.g., reforestation, wetland restoration) harnesses ecosystems for carbon storage, with added biodiversity benefits but challenges in measurement and permanence.
- Technology-based (e.g., Direct Air Capture, BECCS) provides precise accounting but can be costly and harder to scale.
- Hybrid approaches (e.g., biochar, enhanced rock weathering) blend natural and engineered solutions.
The choice depends on cost, feasibility, and sustainability goals.
The European Carbon Market
The European Union Emissions Trading System (EU ETS) is the world’s largest carbon market, designed to reduce greenhouse gas emissions cost-effectively. It operates on a cap-and-trade principle, where a cap is set on total emissions from major industrial sectors, and companies receive or purchase allowances, each representing one ton of CO₂. Companies that emit less than their allocated allowances can sell the surplus, while those exceeding their limits must buy additional permits or face penalties. This market-driven approach incentivizes emissions reductions by making pollution financially costly while rewarding efficiency. The graph below illustrates historical EU ETS allowance prices, reflecting how factors such as policy changes, economic activity, and energy demand influence carbon pricing over time. These fluctuations highlight the increasing role of carbon pricing in shaping corporate strategies and investment in low-carbon technologies.
The global carbon credits market is valued at $105.60 billion in 2023 and is projected to reach $187.13 billion by 2030, demonstrating significant market expansion. With a Compound Annual Growth Rate (CAGR) of 8.5% from 2023-2030, the market is on a steady and sustainable growth trajectory. A 10.5% base year growth rate in 2023 highlights strong momentum in carbon trading, driven by increasing corporate commitments and stricter climate regulations. The Degree of Technical Change score of 6 out of 10 indicates moderate technological advancement in carbon credit verification, trading platforms, and monitoring systems, with room for further innovation. Growth is further supported by the increasing adoption of carbon pricing mechanisms, enhanced transparency through blockchain technology, and the standardisation of carbon credit verification processes.
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