The condensed version

Energy Transition
Report
February 2023
CCUS Market Update

Energy Transition Analytics

February 2023
Table of contents

Executive summary 3

Global CCUS market update 4–6

CCUS policies update 7–9

Medium to long term outlook 10

Direct air capture 11 – 13

CO2 infrastructure 14 – 17

2 February 2023
Executive summary

CCUS demand spiking, more needed

The carbon capture, utilization and storage (CCUS) down on climate action to close the gap. This can
market had a great 2022, with close to 100% be achieved and accelerated by large global
growth in project announcements. North America deployment of cluster projects and major
took the spotlight thanks to its favorable policies, investment in carbon removal technologies. As
while APAC countries started catching up. This such, we have developed a CCUS screening
year, eyes are on the mature markets in Europe dashboard to identify the best location for CCUS
and North America as a flurry of projects are set to cluster projects and our upcoming CO2 removal
progress to the next phase. However, we expect dashboard will address the removal market
one third of the projects in the pipeline to moving forward.
experience delays, although project
Removal technologies will be necessary if there is
announcements are set to maintain the same pace
any hope of remaining within the 1.5DG. The
in 2023.
multiple options for removing CO2 from the
As for pilot projects, 44% of the total in the atmosphere – including DAC, BECCS, and nature-
pipeline at the end 2022 were industrial CO2 based solutions – can provide meaningful results
utilization projects, with another 15% for as negative emissions technologies if they are
enhanced hydrocarbon recovery. Although CO2 additional, tangible, measurable, and provide
utilization is in its infancy, this is notable progress permanent removals of CO2. Given the criteria,
for CCUS projects, especially for countries without DAC provides the most reliable means of carbon
carbon pricing. We expect talks now to focus on offsets. Nevertheless, the technology will require
policies and grants. significant support from government and private
entities to be deployed on large enough scale and
On policies development, prices for European
on timelines conducive of climate ambitions.
Union allowances (EUA) experienced a roller
Countries are beginning to increase support with
coaster ride in 2022, further intensified by the
various funding and incentive schemes. DAC is
major revision to the EU emissions trading system
more economical in areas that have available
(ETS). However, in the short term, we anticipate
storage, low-cost renewables, cooler and drier
that EUA prices will maintain at current levels. The
climates, and where energy stress is low.
UK’s roadmap that outlined the delivery of CCUS
clusters by 2030, and subsequent funding In this month’s report, we also unpack how the
announcements, put the country in a good future CO2 transportation and storage networks
position to lead global development and are taking shape, as available CO2 infrastructure is
deployment of CCUS. But policies in the US and lacking at present. Onshore pipelines continue to
Canada focusing on providing tax credit to projects become the ultimate transport mode of CO2 with
are already proving successful in terms of boosting some ambitious large-scale developments in the
project uptake. US Midwest. Dozens of terminals and CO2 carriers
will be needed in the emerging CO2 shipping
Developing countries like Malaysia and Indonesia
market, that presently will be centered around the
are following in the steps of developed countries
North Sea with Norway, Denmark and the
when it comes to policies, thus we expect 2023
Netherlands positioned as attractive CO2
will see major updates that will catalyze CCUS
importing countries for storage. EOR is set to lose
deployment in emerging markets.
its dominance as a method of CO2 storage in most
On the back of the significant growth seen in 2022, parts of the world, though gaining traction in Asia
our capture demand forecast by 2030 is now close amid improved economics and corporate
to 700 million tonnes per year (Mtpa). However, decarbonization ambitions. Storage in saline
this still falls short of 1.5-degree Celsius (DG) aquifers and volcanics see uptick due to large
scenario requirements. In other words, as we storage capacity and potentially cheaper and more
move into the 2030s, countries need to double effective CO2 storage.

3 February 2023
Global CCUS market update

More CCUS projects announced in 2022

than all previous years combined
At the end of 2022, there were 65 commercial picking up as well with 10 new CCUS projects,
carbon capture, utilization and storage (CCUS) raising the total in the region to 17, compared to
projects in operation around the world, capturing only seven projects at the end of 2021.
over 40 million tonnes per year of CO2. Statistics
Australia registered close to 70% growth in new
indicate almost 48% growth compared to 2021.
project announcements especially in the north-
Additionally, 385 projects are in the pipeline at
west part of the country. Meanwhile, the Middle
present, due to enter operation by 2030 and
East and other parts of the world including Africa,
expecting to capture over 523 million tonnes per
Latin America and Russia continued to lag
year of CO2 when fully operational. This implies
significantly, accounting for only 4% of the total
close to 100% growth recorded in new announced
new project announcements globally.
commercial project capacity in 2022.
A well-oriented and focused CCS regulatory
Unlike in 2021, North America surpassed Europe in
framework like the recently announced Inflation
2022, landing at the forefront of new commercial
Reduction Act in the US, and a flurry of multi-
CCUS project announcements – more than 42% of
billion-dollar funding schemes across Western
the total – followed by Europe with close to 32%.
Europe, North America, and Australia, were the
Asia and Australia registered third and fourth
catalysts for the huge boost in CCUS projects. We
place, respectively.
expect this momentum to continue in 2023, driven
While announcements in Asia continued to be by further government regulated schemes.
dominated by China, Southeast Asian countries

Commercial CCUS project announcements in 2022 v pre-2022, and regional split last year
% of million tonnes per annum

Middle East,
3%
Australia, 8% Others*, 1%

Pre-2022
North
793 Asia, 14%
523 America,
Mtpa Mtpa 42%

2022 in 2022
+ 94%

Europe, 32%

Source: Rystad Energy CCUS solution

Note: Others include South America, Russia, Africa

4 February 2023
Global CCUS market update

Industry dominates the flurry of

delayed projects, followed by coal
Regulatory deferrals, including delays obtaining As such, unless are specific facility related issues,
the necessary approvals or a CO2 projects in this sector face lower risks than in
storage permit, is not seen as a dominant reason others (like power generation, industry, or DAC).
for delayed CCUS projects in 2022. Yet it is a major
Industry for example, accounts for approximately
requirement for a project to maintain its desired
49% of the total project delays count. So far,
lifecycle. One aspect to note thus, is that although
we don’t see any specific trend in any of the
there are significant project deferrals, the pushed
sectors under the industrial banner, which covers
timeline is not high. Out of the
blue hydrogen, cement and bioethanol as some of
total commercial projects likely to face delays, 55%
the main sectors.
are deferred by 0–1-year, another 43% are in the
2–4-year range, and only 2% of projects Power generation dominates across Europe and
are delayed by five years or more. North American. Within power, coal is the
dominant emissions source facility type. Most of
This mainly highlights that the CCUS technology
the projects under the coal sector are
is progressing towards a more mature phase,
associated with already existing facilities that
with fewer technical or technological errors across
require retrofitting the CO2 capture equipment.
value chain segments, which can potentially
Although CCUS in an existing coal power plant has
prolong the project start up at any stage.
been proven and is already in operation, it is yet to
Among carbon sources, the energy sector accounts be widely implemented, meaning the learning
for only 19% of the total number of delayed curves are still low. Besides, the presence of
projects. This comes as CCUS in the energy different impurities also tend to contaminate the
sector, especially in LNG, is one of the oldest capture solution, thus reducing the efficiency. This
and most mature areas of is likely to be the main reason for delays in such
technological deployment. projects.

Delayed commercial CCUS projects by region and carbon sector

Number of projects Project capacity (million tonnes per annum)
45 120
Direct air capture
40
Energy 100
35 9
In evaluation
8
30 Industry 80

25 Power generation
Project capacity (Mtpa) 60
20 22 16

15 40

10 4
5
20
5 3 3
2 8
4 3 1
1
0 2 1 1 0
Europe North America Asia Middle East Australia Russia

Source: Rystad Energy CCUS solution

5 February 2023
Global CCUS market update

Growth set to continue in 2023

The high activity level in 2022 – despite the
delayed projects – set a strong
of the new commercial CCUS projects announced
foundation for 2023. Given the momentum and
globally in 2023 to engage in CO2 utilization,
the number of pre-announced CCUS projects
including enhanced hydrocarbon recovery.
anticipated on the back of the MoUs, partnerships,
and joint ventures from the past year, 2023 is likely Asia-Pacific (Southeast Asia and East Asian
to see at least 80% more new project countries) has seen notable growth in CCUS project
announcements than 2022. for the past year as well. We are already seeing
enhanced momentum as multiple foreign players
Carbon removal (especially DAC) is going to
across different company segments are forming
increase further following the growth in dedicated
partnerships with NOCS such as Petronas in
funding and schemes announced last year in many
Malaysia, Pertamina in Indonesia, and PTTEP in
countries across Europe and North America.
Thailand.
Additionally, BECCS is also likely to see significant
surge in new projects in regions beyond North Last year also displayed a growing trend to
America and Europe. South America, for example, incorporate multi-asset industrial cluster projects
is likely to include BECCS projects as a part of in contrast to standalone projects (given the
its decarbonization plan. The need for advantage it holds decarbonizing to a larger extent
BECCS projects on the continent will likely increase simultaneously with shared infrastructure and
alongside the deployment of bioenergy in the storage). We are seeing an affinity to grow such
energy mix as well as in areas where electrification projects even outside traditional areas like Europe
is challenging. and North America, with activity picking up in
many countries in Asia Pacific. Statistically, 27% of
The industrial sector is estimated to continue to
the new CCUS projects announced in 2022 in Asia
dominate the carbon source facility type in 2023,
Pacific were hub scale projects.
as more hard-to-abate industries – other than
hydrogen and ammonia production – join the race We expect this growth to maintain pace in 2023. If
to decarbonize. For instance, the development of the announced partnerships in Asia-Pacific move
CCUS in the power sector, especially where coal is into projects this year, we estimate at least 35% of
concerned, requires significant decarbonization the new projects in the region would be multi-
but has been sluggish. asset industrial hub projects. Such large-scale
projects, however, require huge investments and
Another area of enhanced growth is industrial
would be achievable today only with government
utilization of CO2 that picked in the past year.
support.
Given the current trend, we expect at least 35%

CCUS projects announced each year by end-use of the captured CO2

Percentage (%)
Permanent storage Utilization
100%
80%
70% 69% 65%
60% 81%
40%
20% 31% 35%
30%
19%
0%
2020 2021 2022 2023
Note: Analysis includes number of projects announced each year
Source: Rystad Energy CCUS solution

6 February 2023
CCUS policy updates

EU ETS pricing likely to increase above

$100 per tonne after 2024
The EU Taxonomy Climate Delegated Act entered post Ukraine-Russian war, whereby we don’t
into force on 1 January 2022 and was designed to expect any new CCUS project announcements for
set forth technical screening criteria to determine blue hydrogen, ammonia, or fossil fuels-powered
whether an economic activity should be plants in the region moving forward.
considered environmentally sustainable. At the
With the current energy crisis, we would expect
time of enforcement, the act did not classify any
EU allowances (EUA) prices to spike, as the EU is
activities related to natural gas or nuclear energy
set to prioritize energy security over sustainability.
as environmentally sustainable. However, in
However, the release of the Market Stability
February 2022, the European Commission
Reserve for REPowerEU increases the supply in
released a draft adding natural gas and nuclear
the short term, relieving pressure on energy prices
power generation to its list of sustainable
amid the ongoing energy crisis. Therefore, in the
technologies which was later published in July
short term, we anticipate that EUA prices will
2022 as the EU Taxonomy Climate
maintain at current levels.
Complementary Delegated Act. The update
outlines the specific gas and nuclear activities that In the medium-term, outlook for EUA is expected
are in line with the EU’s climate and to increase above $100/tonne after the reform
environmental objectives. because low carbon tech initiative would not kick
in until after 2024. In other words, Europe is
Implications
unlikely to experience significant emissions
With strict guidelines and limits on emissions set
reduction in 2023-2024 until these projects enter
by the EU taxonomy, gas power plants are unlikely
operation. On top of that, adding the maritime
to be able to meet the requirements without
industry into the ETS system will create a very
abatement, substantially increasing the cost of
tight market, pushing it beyond the cost of CCUS.
power production. This suggests that existing gas
As the cost of CCUS declines with technology
power plants could become economically unviable
improvements and breakthroughs, its deployment
going forward. Therefore, it is unlikely that we will
in the EU will likely substantially increase after the
see further CCUS announcements within the
post-2024 EU ETS price drop .
sector. In fact, this further supports our prediction

EU ETS historical price development

USD/tonne
Russia invades Release of Market
120
Ukraine Stability Reserve
100

80

60
RePowerEU
40

20

Source: Rystad Energy research and analysis

7 February 2023
CCUS policy updates

Inflation Reduction Act and CCUS Task

Force drive US climate action
US President Joe Biden promoted climate action for the bill is also likely to be insufficient when
in 2022 with the Inflation Reduction Act and CCUS compared to the planned pipeline of qualifying
Task Force, allocating billions towards clean projects. However, we still expect more projects
energy and mitigation. These are on top of the $7 to be announced in the US moving forward and
billion Infrastructure Act that was passed in have thus adjusted our 2030 demand model to
November 2021, highlighting CCUS as one of the reflect the higher demand.
focus areas of the US government's efforts to
address the climate crisis and cut emissions. As
CCUS Task Force
such, more than $19 billion CCUS related funds
The White House Council on Environmental
are made available for project developers.
Quality has declared that they are searching for
Inflation Reduction Act nominations for two new task forces to oversee
The Inflation Reduction Act directs new federal the government’s CCUS efforts. These task forces
spending towards reducing carbon emissions. The will guide the Federal government in developing
Act emphasizes the importance of multiple clean and deploying CCUS, with considerations for
energy sources, including CCUS, energy storage, making the permitting process more efficient,
nuclear power, and hydrogen. It significantly considering a wide range of stakeholder input,
increases the availability of 45Q tax credits for and delivering benefits to local communities.
domestic CCUS projects – designed to drive
corporate capital investments in carbon capture The two task forces will focus on CCUS permitting
initiatives – and makes it easier for CCUS projects and development on Federal and non-Federal
to qualify for credits. lands. The creation of these task forces is
expected to enhance the transparency and
This updated provision incentivizes EOR and shifts smoothness of the permit issuance process,
Scope 1 emissions to Scope 3 in a region with little thereby boosting the viability and shortening
to no carbon pricing. The expected budget project development timeline in the US.

US planned/active funding
Million USD

CCUS technology
196 CO2 storage Carbon removal Carbon
2,575 3,630 utilization 310

>$23 billion
available funding

CCUS projects CCUS

8,910 infrastructure
7,242

Source: CCUS Policies Dashboard

8 February 2023
CCUS policy updates

Developed nations ramp up nationally

determined contributions
Australia compared to a business-as-usual scenario in 2030,
In 2022, the government submitted a new resulting in 214 million metric tonnes of CO2
emissions reduction target to the UNFCCC, aiming equivalent in 2030 (excluding land use, land use
for a 43% decrease in emissions, including those change, and forestry). This is a 13% decrease in
from land use, land-use change, and forestry, emissions compared to its previous target.
compared to 2005 levels – a 15% bump to previous
Singapore
commitments. Although this is a promising
The new NDC submitted to the UNFCCC sets an
enhancement, whether the new target will be
emissions limit of 60 million metric tonnes of CO2
enough in the long term is still to be determined. In
equivalent in 2030 – compared to a previous limit
January, Australia released a final draft of the
of 65 million metric tonnes. Additionally, Singapore
reformed Safeguard Mechanism framework, which
eyes peak emissions sometime before 2030, where
will see emissions from covered facilities drop to
the previous target was around 2030. Although the
100 Mt CO2 in 2030 from 137 Mt currently.
country has yet to firm up its national Net Zero
Australia is poised to deploy CCUS on large scale to
pathway, it plans to cut emissions in line with the
meet its emission reduction ambition, especially in
Paris Agreement 1.5⁰C goal. However, as Singapore
its oil and gas and mining industry, but until there
is highly dependent on imported LNG, it will need
is solid carbon pricing in place, there will be
to deploy CCUS technology and import renewable
minimal incentives for emitters to deploy CCUS.
energy and low-carbon hydrogen fuel to meet this
Norway ambition.
The new goal is to cut emissions by at least 55% by
UK
2030, based on 1990 levels (previously at least 50%
Although the overall target for reducing
and up to 55%). As Norway’s Northern Lights
greenhouse gas emissions was not increased, the
Project is poised to become a major European
UK government provided additional information on
storage hub, we expect CCUS to pick up. The
its NDC, such as how it will measure progress, the
project also has the first-mover advantage to help
scope of the NDC, and how it relates to other
other European nations to meet climate targets.
ambitions. This development provides the UK with
United Arab Emirates a clearer path for achieving climate targets and
The UAE submitted a new target for reducing deploying necessary decarbonization technologies.
emissions to the UNFCCC – a 31% decrease

GHG emissions reductions targets for 2030 in selected developed countries*

Percent reduction (%)**

80
70
60 Average reduction
50
40
30
20
10
0
US Canada Australia Japan EU UK UAE Norway

* Countries with 2050 net zero/climate neutral **Relative to some baseline year/BAU scenario
Source: Rystad Energy research and analysis

9 February 2023
Medium to long term outlook

Capture capacity ramps up to 2030

As 2022 has seen many project announcements, trend to continue, with further project
the expected global CO2 capture capacity in 2030 announcements in the region with an increasing
has significantly increased from about 550 million proportion of DAC projects.
tonnes per annum (Mtpa) in April to over 660 Mtpa
As Europe has seen significant changes in climate
at the end of 2022. This 20% increase is largely
policy throughout the year as well, there will likely
from the industrial sector (>200 Mtpa in 2030), as
be a push for further development and
countries aim to tackle hard-to-abate emissions.
deployment of CCUS in the region. However, most
There is also a significant proportion coming from
projects are currently still in the planning stages,
hydrogen production (>90 Mtpa in 2030) largely
indicating that the focus will be on getting projects
from North America.
through the FID stage. Out of all current projects in
North America and Europe are expected to the planning or under-development stage in
continue to dominate the global CCUS market, Europe, about 28% are likely to face delays. This
which has mainly been down to policy will most likely be due to a deferral in project
development throughout the year. development, such as the Barents Blue ammonia
project. Nevertheless, throughout 2022, Europe
North America has seen quite a few project
made significant progress developing already
announcements since passing the Inflation
announced CCUS projects.
Reduction Act in August 2022. Among the Act’s
many provisions was the enhancement of 45Q tax Meanwhile, notable growth in the Asian-Pacific
credits for carbon sequestration, raising values for region is also expected. Many players are forming
CO2 permanently stored and CO2 stored for partnerships in the region, which if realized in
enhanced oil recovery (EOR) to $85/tonne and 2023, would display substantial growth. This will
$60/tonne, respectively. Credit values for DAC largely be centered around multi-asset industrial
were increased to $180/tonne of CO2 permanently hub projects. This will require significant
stored and $130/tonne of CO2 used for EOR or government support and incentive, with carbon
other utilization. New provisions around 45Q tax pricing playing a crucial role. Although the region
credits, specifically as it relates to DAC, are helping has historically had low carbon pricing, the recently
projects pick up pace in the US as capture capacity announced Malaysian CCS tax credit will create
requirements have been reduced. We expect this greater push in the region.

Capture demand outlook*

CO2 capture capacity (Mtpa)
Middle East
700

600
Europe
500
Australia
400
April ’22 demand forecast
Asia
300

200

100 North America

0
2022 2023 2024 2025 2026 2027 2028 2029 2030

*Based on announced commercial projects

Source: Rystad Energy research and analysis, CCUS Market dashboard

10 February 2023
Direct air capture

Negative emissions techniques spike

Negative emissions technologies remove CO2 large proportion of carbon emissions. This is
from the atmosphere rather than from point considered a negative emissions technology
source emissions. The three main negative carbon because CO2 is drawn from the air, captured, and
emissions techniques are nature-based solutions, stored permanently when utilizing biomass,
bio-energy with BECCS, and DAC. These resulting in net CO2 removal. There is also direct
techniques operate differently but accomplish the ocean capture (DOC), which requires CO2 to be
same goal. removed from the ocean, therefore reducing the
CO2 concentration so that the ocean can naturally
Nature-based solutions are those which take
draw down more CO2 from the atmosphere.
advantage of natural processes but need to be
induced. This includes reforestation, blue carbon Finally, DAC is a technology in its infancy that
and enhanced weathering. Reforestation relies on removes CO2 from the atmosphere directly. CO2
the growth of biomass, where carbon is locked only makes up approximately 400 parts per
into the resulting forest. Blue carbon involves million in the atmosphere today and, as such, the
storing of CO2 in oceanic and coastal ecosystem DAC process must take in 2,500 m3 of air to
such as seagrass, algae and mangroves. Enhanced extract 1 m3 of CO2 but, crucially, is not location
weathering projects boost the natural weathering dependent. Carbon taken out of the atmosphere
process by increasing the surface area of naturally in one location in a remote part of the world is
reactive rock types. The rocks are ground into fine the same as carbon taken out of the atmosphere
particles and spread across large land or ocean next to an emissions source. In a previous
spans. commentary, we outlined why we expect removal
technology to make up approximately 40% of the
BECCS requires the use of bio-fuels for thermal
demand for CO2 capture capacity by 2050.
power generation where exhaust gases are
treated with a CCS process thereby removing a

Global CCUS investment, 2025-2030 Global CCUS demand, 2035-2050

Share (%) of total Share (%) of total

Oil Refining BECCS

Iron and Steel Coal power
4% 5%
5% generation
8% Power
6%
Energy
Direct Air Capture 15%
8%
13% of global Industry
CCUS Investment Gas power 41%
in 2025-2030 is for generation
Other BECCS and DAC 11%
41%

Hydrogen Removal
Production 38%
18%

Source: Rystad Energy CCUS Service Analysis dashboard

11 February 2023
Direct air capture

DAC vs other removal technologies

Additionality guaranteeing they are storing the equivalent
To be additional, simply put, projects need not amount. DAC projects are very straightforward to
have occurred naturally, or in the case of carbon measure the quantity of CO2, as a specific amount
offsets, without the sale of those offsets. Of the is captured and directly injected. For BECCS and
removal technologies discussed here – DAC, nature-based solutions, measuring CO2 can be
BECCS, and nature-based solutions – only two can quite challenging. Complex carbon accounting in
truly without doubt be considered additional. some BECCS value chains makes measuring the net
Nature-based solutions can only occasionally be CO2 removed difficult. For nature-based solutions,
considered additional. However, in many cases, such as reforestation, it would be difficult to
such projects would happen in any case. With DAC directly measure the volume of CO2 captured.
and BECCS emissions are removed directly from
Permanence
the project and not a natural process.
For stored CO2 to be considered permanent, the
Tangibility CO2 must be securely stored with little risk of
For projects to be considered tangible, CO2 must leaking for more than 10,000 years. As many
be removed from the atmosphere, not avoided. natural cycles occur on shorter timescales –
DAC and nature-based solutions are considered namely the life cycle of a tree – it is certain that
tangible as they directly remove CO2 from the nature-based solutions have little permanence.
atmosphere for the sole purpose of removing CO2. There can also be disruptions, such as forest fires
Whereas BECCS, which may remove CO2 from the and land-use change, that would diminish the
atmosphere for only that purpose, may also permanence of a nature-based solution. With
remove emissions as a means of abating current BECCS, although some solutions are net-negative,
emissions. This can be the case for generating they continue to emit CO2 back into the
synthetic fuels. atmosphere, compromising the permanence of the
solution. On the other hand, DAC stores CO2 in
Measurability
geologic reservoirs with little to no risk of leakage
Measurability refers to the amount of CO2, both
on geologic time scales (> 10,000 years).
from the emissions source and in the offset.
Projects need to offset the emissions produced by

Four key metrics for carbon offsetting mechanisms

Additionality

Tangibility

Measurability

Permanence

Source: Rystad Energy research and analysis

12 February 2023
Direct air capture

Direct air capture more economic

in certain areas
There are multiple factors that make a location Energy stress
suitable for DAC, and if a project is to be Certain locations may have suitable fundamentals
successful, considerations must first be taken into for DAC projects, however, other factors such as
account. population, economy, and competition for energy
must be considered. Western Europe has
Available storage
available storage sites and renewable energy
Captured CO2 must be stored somewhere and
from offshore wind in the North Sea, but there is
permanently removed from the atmosphere.
a large demand for energy in the region.
There are numerous features that enable a
Following the shut-off of Russian gas supplies, the
storage reservoir – such as depleted oil and gas
region is severely stressed for energy resources
fields or saline aquifers – suitable for CO2
and will prioritize energy security over
sequestration, including high porosity and
sustainability. Isolated areas with an abundance
permeability, and depth. At present these
of renewable capacity are more suitable in the
systems are used by various traditional CCS
current political climate.
projects worldwide. A lack of storage would
undermine any project.
Low-cost renewables
DAC processes are energy intensive, with some
estimates of energy consumption ranging from as
little as 2 kWh/kg to as much as 7 kWh/kg or
8 kWh/kg. As the CO2 concentration is very low in
the atmosphere, large volumes of air must be
passed through the system. Atmospheric air is
then often cooled and requires water vapor to be
removed before CO2 can be captured. A readily
available supply of excess renewable energy could
provide cheaper energy for a DAC project.
Low-cost heating and cooling
DAC processes also consume a large amount of
heat. Cooled air needs to be reheated along with
the agents used to capture the CO2 for
regeneration. Making use of a geothermal heat
source, or even using an endothermic industrial
process, as a heat sink would make DAC projects
more competitive.
Cool climate
Cooler, dryer climates create a smaller
temperature differential, where less water vapor
will need to be removed, decreasing the overall
energy requirement. Climates like those found in
the Rocky Mountains of the US and Canada as
well as the steppe of Central Asia have some of
the most suitable climates in the world for DAC.

Source: Rystad Energy research and analysis. Picture Shutterstock

13 February 2023
CO2 infrastructure

Pipelines are key for carbon transport

Since CO2 is considered a waste product that often Besides onshore pipelines, there are a handful of
doesn’t find use where it is being generated, it offshore pipelines, CO2 ships and trucks that are
should be transported to a location where it can be operational today. Offshore pipelines exist too,
stored permanently or used in different ways. A wherever CO2 is stored offshore. The four
major roadblock for CCUS value chain buildup is operational offshore pipelines are relatively short,
the lack of available CO2 infrastructure for most except for the 134 km Snohvit offshore pipeline in
projects. The most common way to transport CO2 northern Norway. There are four smaller CO2 ships
today is by onshore pipelines, with 50 such CO2 currently transporting food grade CO2 across
pipelines operational at present, totaling about Europe.
9,000 kilometers. Most of them are in North
Additionally, four of the five trucks operational
America, but most also do not have capacity to
today are deployed in China, transporting smaller
take additional CO2 volumes.
amounts of up to 120,000 tonne per year annually.
One such pipeline that does have capacity for Quite often, plant owners that capture the CO2 will
additional volumes and was built with scalability in not manage those transport and storage assets,
mind, is the 240 km Canadian Alberta carbon Trunk with the exception of some oil and gas companies
Line, commissioned in 2020 as a 16-inch CO2 that operate full CCUS value chains, including
pipeline. It was initially planned to transport CO2 pipelines and oil and gas fields where CO2 is
from only two emitters but designed to be able to injected.
transport up to 14.6 million tonne CO2 a year from
That means that those plant owners seeking to
future projects that would be tied to it.
decarbonize their operations need to partner up
For five decades, CO2 has been captured in the US, with other transportation and storage asset
primarily in natural gas processing plants and to a owners or developers to either connect to existing
lesser degree from natural CO2 domes, such as the nearby CO2 infrastructure or to build new transport
Bravo dome, and transported to locations where it networks.
is injected in depleting oil and gas fields for
enhanced oil recovery.

Number of operational and proposed CO2 transport projects

Operational Under construction/planned

300

250

200

150

100

50

0
Onshore pipeline Offshore pipeline Ship Truck Railway

Source: Rystad Energy CCUS solution

14 February 2023
CO2 infrastructure

Shipping to facilitate offshore storage

With rising interest in offshore storage, and when In the first case, CO2 arrives to a coastal CO2
pipelines are not an option, transportation by terminal, where it is being refrigerated and
ships, often across countries, emerges as a liquefied to make it denser. Then, it gets onto the
compelling alternative. Worldwide, there are only temporary storage tank and the cargo tank, which
four small ships transporting food-grade CO2, all gets loaded onto the ship for the voyage. Then, it
operated in Europe by Norway-based Larvik arrives to an import terminal, from which it is
Shipping, with cargo capacity of 1,220-1,770 distributed on land (e.g., for utilization), stored
tonnes of CO2. The company managed liquified CO2 onshore, or piped for offshore storage.
carriers in Europe for industrial customers, mainly Alternatively, CO2 will reach its destination at the
in the food and beverage sectors, for over 30 offshore site where it will be injected into
years, and the CO2 carriers were converted from geological formations and be onloaded to a fixed
dry cargo vessels. Shipbuilders and maritime platform, a tower loading unit or similar in shallow
companies have accelerated in recent years their waters or to a floating platform or similar in deeper
efforts to develop designs for dedicated CO2 waters.
carriers to stand ready when orders come in.
We identified five emerging CO2 shipping schemes
that can be grouped to 1) terminal to terminal (TtT)
and 2) direct injection offshore (DiO).

CO2 shipping schemes

Source: Rystad Energy research and analysis

15 February 2023
CO2 infrastructure

Storage projects dominate CCUS

commercial projects
CCS is gaining momentum on a global scale, with that is a cost to society, finding useful applications
CO2 utilization in various industrial applications for it in industry that could add value to existing
dominating pilot and demonstration projects. products or create new products in a cost-
competitive way, would be meaningful. For this
Subsurface storage of CO2 is broadly speaking
reason, about 185 pilot projects aim to
divided into the injection of CO2 into depleting oil
demonstrate and test the feasibility and economics
and gas fields for the purpose of enhanced oil or
of such new applications, and successful new use
gas recovery, or dedicated storage of CO2.
cases for CO2 may be scaled up in the future.
Otherwise, CO2 can be used in industry in different
ways, such as mixing it with cement to make more Pilot projects have short timelines, set to operate
robust concrete products, in the production of for about 1-4 years. In such pilots when CO2 is
different chemicals or fuels like methanol or other stored in the subsurface, the intention generally is
industrial products. to test the reliability of the reservoir, gather
information about the subsurface, and monitor the
Considering both operational and proposed
movement of the CO2 for potential unintended
commercial carbon capture projects, we see that
leakages to other geological layers. If proven
while subsurface storage of CO2 makes 87% of all
successful, many such projects will move on to
commercial projects, it makes up merely 28% of all
become a long-standing, commercial projects and
pilot projects. As CO2 is considered a waste product
scale up.

End-use of CO2 in carbon capture projects

Number of carbon capture projects by end-use of CO2, both operational and proposed

Utilization
13% Dedicated storage
22%

Enhanced
oil/gas recovery
Utilization Enhanced oil/gas
18%
72% recovery
6%

Dedicated storage
69%

Commercial Pilot

Source: Rystad Energy CCUS solution

16 February 2023
CO2 infrastructure

Dedicated storage gains momentum

Oil and gas companies recognized years ago the increasing number of proposed projects, we
potential benefits offered by this technology in observe a higher share of projects deploying CCUS
terms of reducing emissions, complying with gas with EOR, driven by corporate commitments and
transport specifications, and helping to raise oil additional revenues associated with enhanced
recovery rates from their producing fields. In fact, hydrocarbon recovery.
there are no dedicated storage projects in oil and
Dedicated CO2 storage is possible in depleted oil
gas fields today – only with enhanced oil recovery
and gas fields, saline aquifers as well as basalts
(EOR). In most EOR cases, CO2 stemmed from
(volcanics). Saline aquifers offer the largest
processing gas with high concentrations of CO2,
identified storage potential worldwide and
where in the US, such projects were driven to a
individual saline formations are usually able to
large extent by policy incentives for decades.
store more CO2 than oil and gas fields can.
Based on a global average, as much as 15%-20% of However, unlike with oil and gas fields, geological
the CO2 that is injected into producing oil and gas characterization is missing, and larger investments
fields will come back and be extracted together are required to avoid leakage and effectively
with hydrocarbons. Thus, to achieve high storage sequester the gas.
efficiency, CO2 should be recirculated in a closed
With three times as much storage in oil and gas
loop system, something that is far from being
fields compared to saline aquifers to date, we
common presently as it involves additional costs
conclude that operators have been playing it safe,
and equipment, such as a recycle compressor and
although more research on saline aquifers has
CO2 monitoring, measurement and verification
been done in recent years, thereby lowering risks.
practices.
Storage in saline aquifers and volcanics account
This is one important reason for the increasing for 36% of all storage sites under construction, up
dominance of dedicated storage that we are from 28% in operational sites. When it comes to
seeing, reflected by that only 18% of all upcoming injection for EOR, we usually observe smaller
storage sites are designed for EOR, down from injection amounts – 1.8 Mtpa on average.
72% of all operational fields. EOR projects may
Saline aquifers with its superior storage capacities
also use natural gas, nitrogen or water, that may
tops injection rates – of 3.4 Mtpa on average,
be more available or less costly compared to CO2.
compared 3.2 Mtpa to depleted field for dedicated
Still, in Asia and the Middle East where we see an
storage, and volcanics with 2 Mtpa.

Storage projects by type of reservoir and injection purpose

Number of storage sites, operational and proposed commercial projects (left axis),
average injection rates Mtpa (right axis)

80 Operational Under construction/planned

3.4 4.0
70 3.2 3.5
60
3.0
50 2.0 2.5
40 1.8
2.0
30 1.5
20 1.0
10 0.5
0 0.0
Depleted O&G field - Depleted O&G field - Saline Aquifers Volcanics
Enhanced oil/gas Dedicated storage
recovery
Source: Rystad Energy CCUS solution

17 February 2023
 Would you like to
learn more?

This whitepaper is a condensed version of our latest Energy

Transition Report. As part of our Energy Transition Analytics
product, we publish comprehensive Energy Transition trend reports
every month covering the latest updates and market trends. This
report was created together with our CCUS research team.
If you want to know more about our Energy Transition solution or
CCUS solution, request a short demo session using the QR code
below or contact Craig Jamieson directly.

Craig Jamieson
SVP Commercial – Clean Tech
[email protected]

18
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