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)
market had a great 2022, with close to 100%
growth in project announcements. North America
took the spotlight thanks to its favorable policies,
while APAC countries started catching up. This
year, eyes are on the mature markets in Europe
and North America as a flurry of projects are set to
progress to the next phase. However, we expect
one third of the projects in the pipeline to
experience delays, although project
announcements are set to maintain the same pace
in 2023.
As for pilot projects, 44% of the total in the
pipeline at the end 2022 were industrial CO2
utilization projects, with another 15% for
enhanced hydrocarbon recovery. Although CO2
utilization is in its infancy, this is notable progress
for CCUS projects, especially for countries without
carbon pricing. We expect talks now to focus on
policies and grants.
On policies development, prices for European
Union allowances (EUA) experienced a roller
coaster ride in 2022, further intensified by the
major revision to the EU emissions trading system
(ETS). However, in the short term, we anticipate
that EUA prices will maintain at current levels. The
UK’s roadmap that outlined the delivery of CCUS
clusters by 2030, and subsequent funding
announcements, put the country in a good
position to lead global development and
deployment of CCUS. But policies in the US and
Canada focusing on providing tax credit to projects
are already proving successful in terms of boosting
project uptake.
Developing countries like Malaysia and Indonesia
are following in the steps of developed countries
when it comes to policies, thus we expect 2023
will see major updates that will catalyze CCUS
deployment in emerging markets.
On the back of the significant growth seen in 2022,
our capture demand forecast by 2030 is now close
to 700 million tonnes per year (Mtpa). However,
this still falls short of 1.5-degree Celsius (DG)
scenario requirements. In other words, as we
move into the 2030s, countries need to double
3 February 2023
down on climate action to close the gap. This can
be achieved and accelerated by large global
deployment of cluster projects and major
investment in carbon removal technologies. As
such, we have developed a CCUS screening
dashboard to identify the best location for CCUS
cluster projects and our upcoming CO2 removal
dashboard will address the removal market
moving forward.
Removal technologies will be necessary if there is
any hope of remaining within the 1.5DG. The
multiple options for removing CO2 from the
atmosphere – including DAC, BECCS, and nature-
based solutions – can provide meaningful results
as negative emissions technologies if they are
additional, tangible, measurable, and provide
permanent removals of CO2. Given the criteria,
DAC provides the most reliable means of carbon
offsets. Nevertheless, the technology will require
significant support from government and private
entities to be deployed on large enough scale and
on timelines conducive of climate ambitions.
Countries are beginning to increase support with
various funding and incentive schemes. DAC is
more economical in areas that have available
storage, low-cost renewables, cooler and drier
climates, and where energy stress is low.
In this month’s report, we also unpack how the
future CO2 transportation and storage networks
are taking shape, as available CO2 infrastructure is
lacking at present. Onshore pipelines continue to
become the ultimate transport mode of CO2 with
some ambitious large-scale developments in the
US Midwest. Dozens of terminals and CO2 carriers
will be needed in the emerging CO2 shipping
market, that presently will be centered around the
North Sea with Norway, Denmark and the
Netherlands positioned as attractive CO2
importing countries for storage. EOR is set to lose
its dominance as a method of CO2 storage in most
parts of the world, though gaining traction in Asia
amid improved economics and corporate
decarbonization ambitions. Storage in saline
aquifers and volcanics see uptick due to large
storage capacity and potentially cheaper and more
effective CO2 storage.
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
the necessary approvals or a CO2
storage permit, is not seen as a dominant reason
for delayed CCUS projects in 2022. Yet it is a major
requirement for a project to maintain its desired
lifecycle. One aspect to note thus, is that although
there are significant project deferrals, the pushed
timeline is not high. Out of the
total commercial projects likely to face delays, 55%
are deferred by 0–1-year, another 43% are in the
2–4-year range, and only 2% of projects
are delayed by five years or more.
This mainly highlights that the CCUS technology
is progressing towards a more mature phase,
with fewer technical or technological errors across
value chain segments, which can potentially
prolong the project start up at any stage.
Among carbon sources, the energy sector accounts
for only 19% of the total number of delayed
projects. This comes as CCUS in the energy
sector, especially in LNG, is one of the oldest
and most mature areas of
technological deployment.
Delayed commercial CCUS projects by region and carbon sector
Number of projects
45
40
35 9
8
30
25
20 22 16
15
10 4
5
5 3
2 8
4 3
0 2
Europe North America Asia
Source: Rystad Energy CCUS solution
5 February 2023
As such, unless are specific facility related issues,
projects in this sector face lower risks than in
others (like power generation, industry, or DAC).
Industry for example, accounts for approximately
49% of the total project delays count. So far,
we don’t see any specific trend in any of the
sectors under the industrial banner, which covers
blue hydrogen, cement and bioethanol as some of
the main sectors.
Power generation dominates across Europe and
North American. Within power, coal is the
dominant emissions source facility type. Most of
the projects under the coal sector are
associated with already existing facilities that
require retrofitting the CO2 capture equipment.
Although CCUS in an existing coal power plant has
been proven and is already in operation, it is yet to
be widely implemented, meaning the learning
curves are still low. Besides, the presence of
different impurities also tend to contaminate the
capture solution, thus reducing the efficiency. This
is likely to be the main reason for delays in such
projects.
Project capacity (million tonnes per annum)
120
Direct air capture
Energy 100
In evaluation
Industry 80
Power generation
Project capacity (Mtpa) 60
40
20
3
1
1
1 1 0
Middle East Australia Russia
Global CCUS market update

Growth set to continue in 2023

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

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
in 2022 with the Inflation Reduction Act and CCUS
Task Force, allocating billions towards clean
energy and mitigation. These are on top of the $7
billion Infrastructure Act that was passed in
November 2021, highlighting CCUS as one of the
focus areas of the US government's efforts to
address the climate crisis and cut emissions. As
such, more than $19 billion CCUS related funds
are made available for project developers.
Inflation Reduction Act
The Inflation Reduction Act directs new federal
spending towards reducing carbon emissions. The
Act emphasizes the importance of multiple clean
energy sources, including CCUS, energy storage,
nuclear power, and hydrogen. It significantly
increases the availability of 45Q tax credits for
domestic CCUS projects – designed to drive
corporate capital investments in carbon capture
initiatives – and makes it easier for CCUS projects
to qualify for credits.
This updated provision incentivizes EOR and shifts
Scope 1 emissions to Scope 3 in a region with little
to no carbon pricing. The expected budget
US planned/active funding
Million USD
CCUS technology
196 CO2 storage Carbon removal
2,575
>$23 billion
available funding
CCUS projects
8,910
Source: CCUS Policies Dashboard
8 February 2023
for the bill is also likely to be insufficient when
compared to the planned pipeline of qualifying
projects. However, we still expect more projects
to be announced in the US moving forward and
have thus adjusted our 2030 demand model to
reflect the higher demand.
CCUS Task Force
The White House Council on Environmental
Quality has declared that they are searching for
nominations for two new task forces to oversee
the government’s CCUS efforts. These task forces
will guide the Federal government in developing
and deploying CCUS, with considerations for
making the permitting process more efficient,
considering a wide range of stakeholder input,
and delivering benefits to local communities.
The two task forces will focus on CCUS permitting
and development on Federal and non-Federal
lands. The creation of these task forces is
expected to enhance the transparency and
smoothness of the permit issuance process,
thereby boosting the viability and shortening
project development timeline in the US.
Carbon
3,630 utilization 310
CCUS
infrastructure
7,242
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,
the expected global CO2 capture capacity in 2030
has significantly increased from about 550 million
tonnes per annum (Mtpa) in April to over 660 Mtpa
at the end of 2022. This 20% increase is largely
from the industrial sector (>200 Mtpa in 2030), as
countries aim to tackle hard-to-abate emissions.
There is also a significant proportion coming from
hydrogen production (>90 Mtpa in 2030) largely
from North America.
North America and Europe are expected to
continue to dominate the global CCUS market,
which has mainly been down to policy
development throughout the year.
North America has seen quite a few project
announcements since passing the Inflation
Reduction Act in August 2022. Among the Act’s
many provisions was the enhancement of 45Q tax
credits for carbon sequestration, raising values for
CO2 permanently stored and CO2 stored for
enhanced oil recovery (EOR) to $85/tonne and
$60/tonne, respectively. Credit values for DAC
were increased to $180/tonne of CO2 permanently
stored and $130/tonne of CO2 used for EOR or
other utilization. New provisions around 45Q tax
credits, specifically as it relates to DAC, are helping
projects pick up pace in the US as capture capacity
requirements have been reduced. We expect this
trend to continue, with further project
announcements in the region with an increasing
proportion of DAC projects.
As Europe has seen significant changes in climate
policy throughout the year as well, there will likely
be a push for further development and
deployment of CCUS in the region. However, most
projects are currently still in the planning stages,
indicating that the focus will be on getting projects
through the FID stage. Out of all current projects in
the planning or under-development stage in
Europe, about 28% are likely to face delays. This
will most likely be due to a deferral in project
development, such as the Barents Blue ammonia
project. Nevertheless, throughout 2022, Europe
made significant progress developing already
announced CCUS projects.
Meanwhile, notable growth in the Asian-Pacific
region is also expected. Many players are forming
partnerships in the region, which if realized in
2023, would display substantial growth. This will
largely be centered around multi-asset industrial
hub projects. This will require significant
government support and incentive, with carbon
pricing playing a crucial role. Although the region
has historically had low carbon pricing, the recently
announced Malaysian CCS tax credit will create
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
from the atmosphere rather than from point
source emissions. The three main negative carbon
emissions techniques are nature-based solutions,
bio-energy with BECCS, and DAC. These
techniques operate differently but accomplish the
same goal.
Nature-based solutions are those which take
advantage of natural processes but need to be
induced. This includes reforestation, blue carbon
and enhanced weathering. Reforestation relies on
the growth of biomass, where carbon is locked
into the resulting forest. Blue carbon involves
storing of CO2 in oceanic and coastal ecosystem
such as seagrass, algae and mangroves. Enhanced
weathering projects boost the natural weathering
process by increasing the surface area of naturally
reactive rock types. The rocks are ground into fine
particles and spread across large land or ocean
spans.
BECCS requires the use of bio-fuels for thermal
power generation where exhaust gases are
treated with a CCS process thereby removing a
large proportion of carbon emissions. This is
considered a negative emissions technology
because CO2 is drawn from the air, captured, and
stored permanently when utilizing biomass,
resulting in net CO2 removal. There is also direct
ocean capture (DOC), which requires CO2 to be
removed from the ocean, therefore reducing the
CO2 concentration so that the ocean can naturally
draw down more CO2 from the atmosphere.
Finally, DAC is a technology in its infancy that
removes CO2 from the atmosphere directly. CO2
only makes up approximately 400 parts per
million in the atmosphere today and, as such, the
DAC process must take in 2,500 m3 of air to
extract 1 m3 of CO2 but, crucially, is not location
dependent. Carbon taken out of the atmosphere
in one location in a remote part of the world is
the same as carbon taken out of the atmosphere
next to an emissions source. In a previous
commentary, we outlined why we expect removal
technology to make up approximately 40% of the
demand for CO2 capture capacity by 2050.

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
To be additional, simply put, projects need not
have occurred naturally, or in the case of carbon
offsets, without the sale of those offsets. Of the
removal technologies discussed here – DAC,
BECCS, and nature-based solutions – only two can
truly without doubt be considered additional.
Nature-based solutions can only occasionally be
considered additional. However, in many cases,
such projects would happen in any case. With DAC
and BECCS emissions are removed directly from
the project and not a natural process.
Tangibility
For projects to be considered tangible, CO2 must
be removed from the atmosphere, not avoided.
DAC and nature-based solutions are considered
tangible as they directly remove CO2 from the
atmosphere for the sole purpose of removing CO2.
Whereas BECCS, which may remove CO2 from the
atmosphere for only that purpose, may also
remove emissions as a means of abating current
emissions. This can be the case for generating
synthetic fuels.
Measurability
Measurability refers to the amount of CO2, both
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
guaranteeing they are storing the equivalent
amount. DAC projects are very straightforward to
measure the quantity of CO2, as a specific amount
is captured and directly injected. For BECCS and
nature-based solutions, measuring CO2 can be
quite challenging. Complex carbon accounting in
some BECCS value chains makes measuring the net
CO2 removed difficult. For nature-based solutions,
such as reforestation, it would be difficult to
directly measure the volume of CO2 captured.
Permanence
For stored CO2 to be considered permanent, the
CO2 must be securely stored with little risk of
leaking for more than 10,000 years. As many
natural cycles occur on shorter timescales –
namely the life cycle of a tree – it is certain that
nature-based solutions have little permanence.
There can also be disruptions, such as forest fires
and land-use change, that would diminish the
permanence of a nature-based solution. With
BECCS, although some solutions are net-negative,
they continue to emit CO2 back into the
atmosphere, compromising the permanence of the
solution. On the other hand, DAC stores CO2 in
geologic reservoirs with little to no risk of leakage
on geologic time scales (> 10,000 years).
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
doesn’t find use where it is being generated, it
should be transported to a location where it can be
stored permanently or used in different ways. A
major roadblock for CCUS value chain buildup is
the lack of available CO2 infrastructure for most
projects. The most common way to transport CO2
today is by onshore pipelines, with 50 such CO2
pipelines operational at present, totaling about
9,000 kilometers. Most of them are in North
America, but most also do not have capacity to
take additional CO2 volumes.
One such pipeline that does have capacity for
additional volumes and was built with scalability in
mind, is the 240 km Canadian Alberta carbon Trunk
Line, commissioned in 2020 as a 16-inch CO2
pipeline. It was initially planned to transport CO2
from only two emitters but designed to be able to
transport up to 14.6 million tonne CO2 a year from
future projects that would be tied to it.
For five decades, CO2 has been captured in the US,
primarily in natural gas processing plants and to a
lesser degree from natural CO2 domes, such as the
Bravo dome, and transported to locations where it
is injected in depleting oil and gas fields for
enhanced oil recovery.
Number of operational and proposed CO2 transport projects
Operational
300
250
200
150
100
50
0
Onshore pipeline Offshore pipeline
Source: Rystad Energy CCUS solution
14
Besides onshore pipelines, there are a handful of
offshore pipelines, CO2 ships and trucks that are
operational today. Offshore pipelines exist too,
wherever CO2 is stored offshore. The four
operational offshore pipelines are relatively short,
except for the 134 km Snohvit offshore pipeline in
northern Norway. There are four smaller CO2 ships
currently transporting food grade CO2 across
Europe.
Additionally, four of the five trucks operational
today are deployed in China, transporting smaller
amounts of up to 120,000 tonne per year annually.
Quite often, plant owners that capture the CO2 will
not manage those transport and storage assets,
with the exception of some oil and gas companies
that operate full CCUS value chains, including
pipelines and oil and gas fields where CO2 is
injected.
That means that those plant owners seeking to
decarbonize their operations need to partner up
with other transportation and storage asset
owners or developers to either connect to existing
nearby CO2 infrastructure or to build new transport
networks.
Under construction/planned
Ship Truck Railway
February 2023
CO2 infrastructure
Shipping to facilitate offshore storage
With rising interest in offshore storage, and when
pipelines are not an option, transportation by
ships, often across countries, emerges as a
compelling alternative. Worldwide, there are only
four small ships transporting food-grade CO2, all
operated in Europe by Norway-based Larvik
Shipping, with cargo capacity of 1,220-1,770
tonnes of CO2. The company managed liquified CO2
carriers in Europe for industrial customers, mainly
in the food and beverage sectors, for over 30
years, and the CO2 carriers were converted from
dry cargo vessels. Shipbuilders and maritime
companies have accelerated in recent years their
efforts to develop designs for dedicated CO2
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
In the first case, CO2 arrives to a coastal CO2
terminal, where it is being refrigerated and
liquefied to make it denser. Then, it gets onto the
temporary storage tank and the cargo tank, which
gets loaded onto the ship for the voyage. Then, it
arrives to an import terminal, from which it is
distributed on land (e.g., for utilization), stored
onshore, or piped for offshore storage.
Alternatively, CO2 will reach its destination at the
offshore site where it will be injected into
geological formations and be onloaded to a fixed
platform, a tower loading unit or similar in shallow
waters or to a floating platform or similar in deeper
waters.
February 2023
CO2 infrastructure

Storage projects dominate CCUS

commercial projects
CCS is gaining momentum on a global scale, with
CO2 utilization in various industrial applications
dominating pilot and demonstration projects.
Subsurface storage of CO2 is broadly speaking
divided into the injection of CO2 into depleting oil
and gas fields for the purpose of enhanced oil or
gas recovery, or dedicated storage of CO2.
Otherwise, CO2 can be used in industry in different
ways, such as mixing it with cement to make more
robust concrete products, in the production of
different chemicals or fuels like methanol or other
industrial products.
Considering both operational and proposed
commercial carbon capture projects, we see that
while subsurface storage of CO2 makes 87% of all
commercial projects, it makes up merely 28% of all
pilot projects. As CO2 is considered a waste product
that is a cost to society, finding useful applications
for it in industry that could add value to existing
products or create new products in a cost-
competitive way, would be meaningful. For this
reason, about 185 pilot projects aim to
demonstrate and test the feasibility and economics
of such new applications, and successful new use
cases for CO2 may be scaled up in the future.
Pilot projects have short timelines, set to operate
for about 1-4 years. In such pilots when CO2 is
stored in the subsurface, the intention generally is
to test the reliability of the reservoir, gather
information about the subsurface, and monitor the
movement of the CO2 for potential unintended
leakages to other geological layers. If proven
successful, many such projects will move on to
become a long-standing, commercial projects and
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
potential benefits offered by this technology in
terms of reducing emissions, complying with gas
transport specifications, and helping to raise oil
recovery rates from their producing fields. In fact,
there are no dedicated storage projects in oil and
gas fields today – only with enhanced oil recovery
(EOR). In most EOR cases, CO2 stemmed from
processing gas with high concentrations of CO2,
where in the US, such projects were driven to a
large extent by policy incentives for decades.
Based on a global average, as much as 15%-20% of
the CO2 that is injected into producing oil and gas
fields will come back and be extracted together
with hydrocarbons. Thus, to achieve high storage
efficiency, CO2 should be recirculated in a closed
loop system, something that is far from being
common presently as it involves additional costs
and equipment, such as a recycle compressor and
CO2 monitoring, measurement and verification
practices.
This is one important reason for the increasing
dominance of dedicated storage that we are
seeing, reflected by that only 18% of all upcoming
storage sites are designed for EOR, down from
72% of all operational fields. EOR projects may
also use natural gas, nitrogen or water, that may
be more available or less costly compared to CO2.
Still, in Asia and the Middle East where we see an
increasing number of proposed projects, we
observe a higher share of projects deploying CCUS
with EOR, driven by corporate commitments and
additional revenues associated with enhanced
hydrocarbon recovery.
Dedicated CO2 storage is possible in depleted oil
and gas fields, saline aquifers as well as basalts
(volcanics). Saline aquifers offer the largest
identified storage potential worldwide and
individual saline formations are usually able to
store more CO2 than oil and gas fields can.
However, unlike with oil and gas fields, geological
characterization is missing, and larger investments
are required to avoid leakage and effectively
sequester the gas.
With three times as much storage in oil and gas
fields compared to saline aquifers to date, we
conclude that operators have been playing it safe,
although more research on saline aquifers has
been done in recent years, thereby lowering risks.
Storage in saline aquifers and volcanics account
for 36% of all storage sites under construction, up
from 28% in operational sites. When it comes to
injection for EOR, we usually observe smaller
injection amounts – 1.8 Mtpa on average.
Saline aquifers with its superior storage capacities
tops injection rates – of 3.4 Mtpa on average,
compared 3.2 Mtpa to depleted field for dedicated
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
craig.jamieson@rystadenergy.com

18
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