30th October 2024

Global carbon capture needs $196 billion in investment by 2034

The global carbon capture, utilisation, and storage (CCUS) sector will require a massive $196 billion in investment by 2034 to meet climate targets, according to a recent report from Wood Mackenzie. This figure underscores the pivotal role CCUS will play in reducing carbon emissions as industries transition towards net-zero goals. The capital is needed to fund infrastructure, including storage facilities and carbon capture technologies, with significant investments forecasted for regions such as North America, Europe, and Asia.

CCUS is increasingly viewed as essential for mitigating climate change, particularly for industries that are difficult to decarbonise, such as steel, cement, and heavy chemicals. By capturing and storing CO2 emissions, CCUS offers a path for these sectors to reduce their environmental impact while continuing production. However, the report emphasises that achieving this level of investment will depend on strong policy support and financial incentives from governments. Public-private partnerships are also expected to play a crucial role in scaling up CCUS technology.

Currently, North America leads the world in CCUS deployment, with Europe following closely behind. However, Wood Mackenzie’s report notes that for CCUS to reach its potential globally, investment must significantly increase across all regions. The Asia-Pacific region, in particular, is expected to see substantial growth in CCUS investments as emerging economies ramp up their decarbonisation efforts.

Despite the enormous potential, the report highlights several challenges. A lack of robust regulatory frameworks, uncertainty over long-term financial returns, and the high upfront capital costs are key barriers that could slow the adoption of CCUS technologies. The report also stresses that without substantial government support and clearer carbon pricing mechanisms, the pace of investment may lag behind the necessary targets.

So it seems CCUS is poised to be a major player in global decarbonisation efforts. Still, meeting the $196 billion investment requirement will hinge on coordinated actions from both the public and private sectors to ensure that the necessary financial and regulatory frameworks are in place.