Defossilizing industry: considerations for scaling-up carbon capture and utilization pathways

With momentum building behind the global transition to a more sustainable economy, businesses face mounting pressure to decarbonise. Yet for companies in key industries such as steelmaking, chemicals and cement whose production processes are intrinsically polluting, the question is not whether to reduce their emissions, but how? 

Carbon capture and utilization (CCU) offers a potentially attractive pathway to ‘defossilizing’ carbon-reliant industries, which can complement other decarbonisation approaches. For industrial companies, CCU offers multiple benefits: as well as addressing emissions, it can reduce reliance on primary fossil feedstocks, at the same time creating value by turning captured CO2 into products such as fuel, chemicals and building materials. 

However, while the potential benefits merit significant attention from firms in hard-to-abate sectors, CCU remains at an early stage of development. With CCU technologies so far largely commercially unproven at scale, how far and how quickly CCU’s potential can be turned into reality will depend on stakeholders creating the necessary environment for development and deployment at scale.    

We have identified three key barriers to success for CCU:

1. Fragmented and inconsistent policy frameworks: A lack of consistency across jurisdictions and CCU pathways makes it hard for first movers to identify clear opportunity, while policies that favour sequestration can act as a disincentive for utilization.
2. ‘Valleys of death’: As with many new technologies, long development timelines, high capital requirements and immature business models with unclear routes to revenue create barriers to accessing early-stage investment.
3. The need for cross-sectoral collaboration: To scale nascent technology and raise awareness, CCU developers need partnerships with industry to access infrastructure, expertise and market channels; however, the complexity of testing and integration can impede collaboration.

In our report Defossilizing Industry: Considerations for Scaling-up Carbon Capture and Utilization Pathways, we assess the potential role of CCU in a sustainable industrial transition. Created in collaboration with the World Economic Forum, it looks at the current CCU project pipeline and utilization pathways and analyses the existing policy and financial barriers to CCU, before setting out a potential way forward.

We present three key areas for improvement to drive CCU uptake:

• Building credible and durable market signals
• Driving deployment in an immature market
• Improving collaboration and governance

The task is complex, but shared ambition, improved coordination and a willingness to test solutions could pay huge dividends in the long run. By encouraging open, evidence-based conversations and clarifying and enabling the scaling up of technologies, decision makers can ensure the right choices are made to deliver a sustainable industrial future.

Please click here to visit the World Economic Forum website and download the report.