2 minute read
Research Analyst, Canada Upstream
Carbon capture, utilisation and storage (CCUS) isn’t a new concept – industrial-scale projects have been around for more than half a century. But it is gathering pace. The global CCUS project pipeline has increased by over 50% throughout 2022 and announcements made across all sectors show incredible momentum. But more is needed if companies and countries are to meet their net zero targets.
Will 2023 be the year that CCUS really hits the mainstream? Drawing on powerful insight from Lens Carbon, we’ve mapped out our predictions for the year ahead. Fill in the form for your complimentary copy of CCUS: 4 things to look for in 2023. And read on for an introduction.
A shift from announcement to action for CCUS projects?
The global CCUS pipeline is growing fast. 166 Mtpa of potential CO2 storage capacity will enter development throughout 2023, through a combination of standalone projects and larger hubs. However, only 98 Mtpa of capture capacity is aiming for FID, representing a significant capture-storage gap.
We expect emitters to sign up once hubs are established, although many projects won’t be online until the end of the decade.
How many projects will reach FID this year? Which regions will dominate the project count? Where are the big hubs to watch? Read the full report for our view.
Increased policy support will drive CCUS growth
Government policy plays a major role in CCUS project economics. It has, in some cases, provided more than 50% of the spend to get projects off the ground. This will continue in 2023 – and expand to new regions.
Asia will see more policy momentum, for example, having previously lagged behind other regions. Malaysia and Indonesia will finalise regulations and incentives for CCUS, focusing first on decarbonising natural gas production. India and Japan will make headway on their respective CCUS roadmaps. Finally, Thailand and China are expected to make strides in their funding framework.
In the US, positive policy moves made in 2022 – not least the landmark Inflation Reduction Act – will enable companies to advance projects in 2023.
Read the full report to see a map of announced Asian CCUS projects by development status, and a look at jurisdictional hurdles to be cleared in the US.
Expect an M&A flurry as companies build positions in the most advantaged CCUS hubs
"The scene is set for more deals with CCUS positions at their centre."
Projects moving forward, easing policy and regulation, ever-increasing company and country net zero targets; we think the scene is set for more deals with CCUS positions at their centre. Location is key in carbon disposal, and companies will want to build positions in the most advantaged CCUS hubs. But doing this organically takes years and dedicated development teams.
We expect to see a flurry of M&A in 2023 as companies seek first-mover advantages in new geographic locations. Deals to date, such as Chevron-Talos-Carbonvert in the US GoM and E.ON-Horisont Energi in Europe, provide a hint at what’s to come.
For more on the M&A landscape, plus a closer look at all our predictions for the year ahead, read CCUS: 4 things to look for in 2023.