Carbon Capture and Sequestration Market Set for Strong Growth Driven by Government Regulations on Carbon Emissions

Carbon capture and sequestration (CCS) refers to the process of capturing waste carbon dioxide (CO2) from large point sources such as fossil fuel power plants before it enters the atmosphere. The captured CO2 is then compressed for transport to storage locations where it is injected underground and stored safely in depleted oil and gas reservoirs or saline aquifers. CCS plays a crucial role in mitigating climate change by preventing large amounts of CO2 from industrial and energy-related sources from being released into the atmosphere. The technology allows fossil fuels like coal and natural gas to be used with near-zero emissions and makes deep cuts in carbon possible that would otherwise not be achievable. The global CCS market has been gaining increased attention due to stringent government regulations in multiple countries pushing for substantial reductions in greenhouse gas emissions from power plants and industrial facilities over the next decade.

The carbon capture and sequestration market is estimated to be valued at USD 3.25 Bn in 2024 and is expected to reach USD 11.3 Bn by 2031, growing at a compound annual growth rate (CAGR) of 19.5% from 2024 to 2031.

Key Takeaways

Key players operating in the Carbon Capture and Sequestration are Shell, Fluor, Linde, Air Products and Chemicals Inc, Aker Solutions. Shell is among the leading players focusing on developing large-scale carbon capture projects to transport and store CO2 safely underground. Fluor Corporation is involved in the engineering, procurement, and construction of CCS projects globally.

Growing environmental awareness and the stringent emission norms imposed by various governments worldwide are expected to drive the demand for Carbon Capture and Sequestration Market technologies in the coming years. Power generation and industrial sectors are incorporating CCS to lower their carbon footprint and meet sustainability targets.

Countries like the US, UK, Norway, and Canada are extensively funding research related to CCS and considering legislating mandatory adoption across certain industries. For instance, the UK and EU have targeted installing CCS capabilities in industrial zones and power plants by the mid-2020s. This growing focus on establishing carbon neutral economies will further propel the global expansion of the carbon capture and sequestration market.

Market Key Trends

One of the major trends gaining traction in the carbon capture and sequestration market is the growth of direct air capture technologies. Direct air capture (DAC) technologies claim to extract CO2 directly from the atmosphere on an industrial scale for permanent storage. Companies like Carbon Engineering and Climeworks are pioneering the development of DAC plants with support from government grants and private funding. Although still in the pilot phase, advancements in DAC offer the possibility of restoring atmospheric carbon levels if deployed globally at gigaton levels. This makes it a promising avenue to explore for mitigating climate change in the long run.

Porter's Analysis

Threat of new entrants: Moderate threat as high initial capital investments are required for establishing carbon capture and storage infrastructure. However, presence of supportive government policies and regulations encourages new players.

Bargaining power of buyers: Moderate bargaining power as there are few alternative solutions for reducing carbon emissions at scale. However, buyers can negotiate on pricing and licensing agreements.

Bargaining power of suppliers: High bargaining power for technology suppliers and EOR/ERP service providers as they control key components. Suppliers exploittheir technical know-how and expertise in negotiations.

Threat of new substitutes: Low threat as carbon capture and storage is one of the few methods that can achieve meaningful reductions in carbon emissions from large stationary sources.

Competitive rivalry: High rivalry due to presence of global players offering similar carbon management solutions. Intense competition on pricing, performance and quality of services.

Geographical regions

North America holds the largest share in the carbon capture and storage market owing to supportive governmental policies and initiatives for emission reductions. Key countries include U.S. and Canada.

Asia Pacific region is expected to grow at the highest CAGR during the forecast period with China, India, and other developing economies increasingly adopting carbon capture technologies to meet climate commitments. Initiatives such as CCUS projects at coal-fired plants in China and government incentives in India will drive future growth.

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Author Bio:

Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc. (https://www.linkedin.com/in/money-singh-590844163)