Wood Mackenzie Research Highlights Urgency in Capturing 7 Billion Tonnes of Carbon for Net Zero by 2050

Mhairidh Evans, the Head of Carbon Capture, Utilization, and Storage (CCUS) Research at Wood Mackenzie, emphasized the urgent need to capture seven billion tonnes of carbon (Btpa) in order to achieve global net-zero goals by 2050. Evans asserted that while energy efficiencies, renewables, and alternative fuels are crucial, they alone will not be sufficient to reach the ambitious net-zero target.

Wood Mackenzie’s research currently indicates that the world is on course to achieve 2 billion tonnes of CO2 capture and removal by 2050, which aligns with a 2.5-degree global warming scenario. However, to align with the more stringent 1.5-degree compliant scenario for net-zero by 2050, capturing 7 billion tonnes annually is imperative.

The urgency of the situation was underscored by Evans, who stressed the need to initiate CCUS projects swiftly. Wood Mackenzie is presently tracking 1,400 million tonnes of CO2 per annum in globally planned CCUS capacity across various project types, encompassing capture, transport, and storage. Notably, the United States is at the forefront of this activity, accounting for 33% of all such projects.

Evans highlighted the exciting project pipeline, with the US displaying strong growth potential, primarily due to supportive initiatives like the Inflation Reduction Act’s 45Q tax credit, which encourages decarbonization among emitters. Furthermore, the Infrastructure Investment and Jobs Act facilitates the expansion of the CO2 transport and storage infrastructure value chain. The United States also boasts extensive geological carbon storage resources, making it an attractive market for CCUS businesses.

However, despite the opportunities, Evans acknowledged the challenges hindering industry expansion. High costs, evolving technologies, unclear business models, and nascent policy and regulation present obstacles. Encouraging more emitters to embrace carbon capture is another hurdle, given the increasing number of CO2 storage hub proposals but a limited pool of potential customers.

Costs remain a concern, even with the 45Q tax credit, which may not cover expenses for every project. However, Evans anticipates cost reductions of up to 30% during the decade. Yet, companies might choose to wait for costs to decrease further, as the 45Q tax credit extends to projects commencing construction as late as 2033, which could potentially delay project impact, while climate change continues unabated.