Dedicated Geological Storage of CO2 Set to Dominate CCUS

Carbon capture, utilization, and storage (CCUS) technologies remove carbon dioxide (CO₂) from flue gases or directly from the atmosphere, before either storing this captured carbon dioxide underground or using it for a range of industrial applications. CCUS has been identified as one of many vital decarbonization technologies that will be needed to meet global net-zero emissions targets. The IDTechEx market report, "Carbon Capture, Utilization, and Storage (CCUS) Markets 2025-2045: Technologies, Market Forecasts, and Players", covers all aspects and technologies of the CCUS value chain. 

Recently, a subtle change in language has emerged at conferences and expos in the CCUS space. IDTechEx analysts have noticed that policymakers and key industrial players have solely focused on carbon dioxide storage more and more. CCS (carbon capture and storage) has taken center stage, increasingly dropping the "U" (utilization) from discussions. 

About 75% of existing CCUS projects rely on the utilization of CO₂ to achieve profitability via enhanced oil recovery (EOR), a method of reversing productivity decline in oil fields while storing CO₂ underground. According to IDTechEx forecasts, dedicated geological storage of carbon dioxide will outpace EOR as the leading end fate of capture CO₂ by the end of the decade. By 2045, IDTechEx forecasts the world will be sequestering 1.6 gigatonnes per annum of CO₂ underground. Key reasons for this paradigm shift in CCUS are explored in this article. 

IDTechEx forecasts that dedicated geological storage will outstrip EOR as the leading end fate of captured carbon dioxide by 2030. Source: IDTechEx

There is now a business model for dedicated CO₂ storage

When carbon dioxide is permanently sequestered underground, most commonly in saline aquifers, no tangible product is created. However, the global rise in carbon markets and carbon pricing mechanisms has provided a business model for storing CO₂. Carbon pricing provides an economic method of addressing climate change: a cost is applied to greenhouse gas emissions to encourage polluters to reduce their carbon footprints. The EU ETS (emission trading system) is a prime example. When government carbon pricing instruments result in emitting CO₂ being more expensive than capturing, transporting, and sequestering CO₂, CCUS can thrive.

The last decade has seen carbon pricing expand to more sectors in more regions, with prices generally being higher now than ever before. Other financial government incentives for CCUS have also emerged, such as the US 45Q tax credit. This increased economic driving force for CCUS has stimulated project development, with several large-scale CO₂ storage projects are in the pipeline. Major oil and gas players such as Shell, Equinor, and Chevron are leveraging decades of subsurface expertise to open up storage in saline aquifers.

Permanently storing CO₂ is better for reaching climate targets

Permanently storing carbon dioxide generally has better sustainability credentials than utilizing CO₂. This is because permanently sequestering CO₂ captured from an industrial process in dedicated underground storage is a net-zero process (or even net-negative for some CO₂ sources). In contrast, captured CO₂ returns to the atmosphere on short time scales for several CO₂ utilization applications, such as when a fuel synthesized from CO₂ is combusted. Storing CO₂ is, therefore, better suited to meeting emission reduction targets. 

Furthermore, there is simply greater potential for CO₂ storage than CO₂ utilization. It is estimated that the world's potential CO₂ storage capacity may exceed 15,000 gigatonnes. To put this into perspective, global anthropogenic CO₂ emissions are currently around 40 gigatonnes per year. This far outsizes potential utilization markets for carbon dioxide, even when including emerging application areas such as CO₂-derived chemicals or CO₂-derived concrete products. 

Where will CO₂ utilization still shine?

Fossil fuel infrastructure won't disappear overnight, but existing assets can be decarbonized. New CCUS enhanced oil recovery projects are still expected in the future because the oil produced by this method has a much lower carbon footprint than typical oil extraction. Alternatively, drop-in replacements to fossil fuels can be made by utilizing CO₂, such as CO₂-derived e-fuels. Such low-carbon fuels are seeing demand from the aviation and maritime sectors, where full electrification remains unfeasible for decarbonization.

For carbon dioxide utilization applications that permanently store CO₂, such as carbonate formation in CO₂-derived concrete, similar regulatory support to dedicated geological storage may be available. For example, utilization in such a way that CO₂becomes permanently chemically bound (or mineralized) is considered the same as underground geological storage under the EU ETS while also generating a product that can be sold to generate revenue (such as a concrete aggregate or additive).

Finally, CO₂ utilization can act as a transitionary fate of CO₂ because the necessary CO₂ transportation/storage infrastructure to support large-scale CCUS does not yet exist for most regions. Many such CO₂ storage projects plan to be operational before 2030, with the Northern Lights Longship project expected before the end of 2024, but some emitters will remain without access. In the short term, CO₂ utilization could allow mature ready-now carbon capture technologies to be deployed as infrastructure expands.

For more information on CCUS, please refer to the IDTechEx "Carbon Capture, Utilization, and Storage (CCUS) Markets 2025-2045: Technologies, Market Forecasts, and Players" report. For more information on CO₂ utilization, please refer to the IDTechEx "Carbon Dioxide Utilization 2025-2045: Technologies, Market Forecasts, and Players" report.

For the full portfolio of energy and decarbonization market research available from IDTechEx, please see www.IDTechEx.com/Research/Energy.

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