Developments in carbon capture and storage (CCS) service sector spending will skyrocket over the next three years, with total global expenditure exceeding $50 billion, Rystad Energy research has revealed.
According to a recent statement by the Energy Research Organization, carbon capture and storage (CCS) is expected to quadruple from 2022 to 2025.
This means that total spending on announced commercial projects in 2022 is expected to reach $4.4 billion, up from $2.8 billion in 2018.
But spending is expected to nearly triple in 2023, topping $11 billion for the year. 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, the analysts 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.
“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,” said Lein Mann Hansen, Rystad Energy senior analyst.
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Meanwhile, the Rystad findings revealed that the money will be spent on a variety of services related to the installation of the capture unit, transportation of the carbon dioxide (CO2), and storage.
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.
“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,” the statement reads.
Rsytad analysts also say Engineering, Procurement, Construction and Installation (EPCI) costs will be the primary driver of spending, contributing about $35 billion to the $55 billion total by 2025.
Annual EPCI spending is expected to hit $12 billion in 2025, a more than 300 per cent increase from the $2.8 billion projected for this year.
