Global Carbon Capture and Sequestration (CCS) Market – Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2032

Overview

The global carbon capture and sequestration (CCS) market is expected to experience robust growth from 2024 to 2032, driven by the escalating urgency to combat climate change and reduce carbon emissions. The market, valued at USD 6.1 billion in 2023, is projected to reach USD 18.6 billion by 2032, with a compound annual growth rate (CAGR) of 14.5% during the forecast period. CCS technologies are integral to mitigating climate change by capturing carbon dioxide (CO2) emissions from various industrial sources, such as power plants and manufacturing facilities, and either storing it underground or utilizing it for applications such as enhanced oil recovery (EOR). The growing global emphasis on decarbonization, the mounting pressure to meet international climate agreements, and commitments to achieving net-zero emissions by 2050 are key factors accelerating the adoption of CCS technologies across multiple industries.
A major driver of market expansion is the increased regulatory push from governments worldwide to reduce greenhouse gas emissions. Policies targeting carbon reduction, such as carbon taxes, emission reduction targets, and incentives for adopting green technologies, are influencing industries to adopt CCS as a primary strategy for reducing their carbon footprints. The increasing awareness of climate change and its environmental impacts has led to widespread government support for CCS, with policies that promote investments in both the development of CCS technologies and the establishment of the necessary infrastructure for their implementation. For example, many governments are providing financial incentives, grants, and tax benefits to companies that invest in CCS, making the technology more accessible and economically viable. Technological innovations in the capture, transportation, and storage of carbon are also contributing to the growth of the CCS market. Advances in capture technologies, such as post-combustion, pre-combustion, and oxy-fuel combustion methods, are improving the efficiency and cost-effectiveness of carbon capture processes. Furthermore, developments in storage techniques, such as geological storage in depleted oil and gas fields or deep saline aquifers, are enhancing the safety and feasibility of long-term CO2 storage. The transportation of captured carbon through pipelines is also becoming more efficient, with new infrastructure being developed to connect carbon capture sites with storage facilities. These technological improvements are reducing the costs associated with CCS and making it a more attractive option for industries seeking to comply with emissions reduction targets.
Industries such as energy, cement production, and fertilizer manufacturing are increasingly adopting CCS solutions to reduce their carbon emissions. The energy sector, particularly coal-fired power plants and natural gas facilities, represents a significant portion of the CCS market, as these industries are major contributors to global CO2 emissions. The cement industry, a hard-to-decarbonize sector, is also a key adopter of CCS, as it is responsible for a substantial share of global industrial emissions. Similarly, the fertilizer industry, which produces significant emissions during ammonia production, is turning to CCS as a means to meet emission reduction targets. The global carbon capture and sequestration market is set to grow significantly in the coming years, driven by regulatory frameworks, technological advancements, and the increasing urgency for industries to adopt carbon-neutral strategies. As sectors such as energy, cement, and chemicals increasingly rely on CCS to meet their climate goals, the market for CCS technologies will expand, positioning CCS as a key solution for addressing global climate change and achieving net-zero emissions by 2050. The growth of the market is further supported by government incentives, technological innovations, and an increasing focus on sustainable practices across industries worldwide.

Key Takeaways

• ✓ The global CCS market is expected to grow from USD 6.1 billion in 2023 to USD 18.6 billion by 2032, with a CAGR of 14.5%.
• ✓ Power generation and chemicals are the leading capture sources, while enhanced oil recovery (EOR) and dedicated storage & treatment dominate the end-use segment.
• ✓ The demand for CCS is driven by global efforts to reduce carbon emissions and meet climate change mitigation targets.
• ✓ North America and Europe are leading regions in the adoption of CCS technologies due to government policies and industry investments in carbon capture projects.
• ✓The development of CCS infrastructure is expected to drive market growth, with significant investments from both government and private sectors.

Market Metrics

Market Drivers

1. Government Policies and Emission Reduction Targets

The increasing global commitment to achieving carbon neutrality by 2050 is driving the implementation of more stringent government regulations and policies aimed at reducing carbon emissions. Many countries are setting ambitious targets to decrease their greenhouse gas emissions, in line with international agreements such as the Paris Agreement. These regulations include carbon pricing mechanisms, carbon taxes, and emissions reduction goals, all of which encourage industries to adopt cleaner technologies. To further support this transition, governments are offering a range of incentives, such as grants, subsidies, tax credits, and carbon trading programs, to promote the adoption of carbon capture and sequestration (CCS) technologies. By providing financial support, governments are making it easier for industries to invest in CCS systems, making them more financially viable and accelerating their implementation. As a result, the market for CCS technologies is experiencing strong growth as companies strive to meet regulatory requirements and contribute to the global effort to combat climate change.

2. Technological Advancements in CCS

Technological advancements in carbon capture and sequestration are significantly enhancing the viability of CCS for large-scale industrial applications. Innovations in capture technologies, such as post-combustion, pre-combustion, and oxy-fuel combustion, have increased the efficiency of CO2 capture, making it more cost-effective and less energy-intensive. The development of advanced materials and chemical solvents is also improving capture rates, reducing the energy required for separation, and increasing overall efficiency. Additionally, advances in CO2 transportation, such as the development of more efficient pipeline systems and storage techniques, have lowered the costs associated with moving captured CO2 from emission sources to storage sites. Enhanced storage methods, such as deep saline aquifers, depleted oil reservoirs, and other geological formations, are making long-term CO2 storage more secure and sustainable. These breakthroughs in technology are not only reducing the operational costs of CCS but also enabling industries to incorporate CCS solutions more seamlessly into their operations, thus driving the market’s growth. The continuous development of more effective, scalable, and economically viable CCS technologies is a key factor in the expansion of the market.

3. Industrial Demand for Emission Mitigation Solutions

As industries such as cement, steel, and oil refining are some of the largest emitters of CO2 globally, there is increasing demand for emission mitigation technologies that can help these sectors reduce their environmental impact. These heavy industries are responsible for a significant portion of global carbon emissions, and due to the high carbon intensity of their operations, they face mounting pressure to adopt sustainable practices and meet increasingly stringent environmental regulations. Carbon capture and sequestration provides a critical solution for these sectors, allowing them to continue their operations while reducing their carbon footprint. By capturing and storing CO2 emissions, CCS enables these industries to lower their overall emissions, making it easier for them to comply with emissions reduction targets and contribute to climate change mitigation efforts. The growing demand for emission mitigation solutions across high-emission sectors is driving the adoption of CCS, making it an essential tool for industries that are striving to meet global sustainability targets and decarbonize their operations. This heightened industrial demand is expected to continue fueling the growth of the CCS market in the coming years.

Market Restraints

1. High Capital and Operational Costs

The high capital expenditure required for the development of carbon capture and sequestration (CCS) infrastructure is one of the most significant barriers to widespread adoption. Establishing CCS facilities involves substantial upfront costs, including the construction of CO2 capture units, the installation of transportation pipelines, and the development of storage sites, all of which require large financial investments. The complexity of these projects often means that only large, well-funded companies or governments can afford to invest in them. In addition to the initial investment, operational costs for maintaining and managing CCS infrastructure—such as monitoring CO2 storage sites for leakage, maintaining equipment, and ensuring the transportation of CO2—is also a financial burden. For industries operating with tight profit margins or in developing regions with limited financial resources, the expense associated with CCS can be prohibitive, deterring adoption. As a result, many companies and countries are hesitant to invest in CCS without clear economic incentives or sufficient government support to make these projects financially viable in the long term.

2. Limited Availability of Suitable Storage Sites

Geological storage is considered the most effective method for long-term CO2 sequestration, yet the availability of suitable and secure storage sites remains a key constraint for the global scaling of CCS. Suitable storage sites, such as deep saline aquifers, depleted oil and gas reservoirs, and unminable coal seams, need to meet specific geological criteria to ensure that CO2 can be safely stored underground for decades or centuries without risk of leakage. However, these sites are not universally available, and in many regions, suitable geological formations are scarce or have already been utilized. Additionally, the identification and assessment of new storage sites are costly and time-consuming processes that require extensive geological surveys and evaluations. Environmental concerns also pose a challenge, as local communities and governments may resist the siting of CCS infrastructure due to fears of CO2 leakage or contamination of underground water supplies. Regulatory concerns and the potential for long-term liabilities related to CO2 storage further complicate the widespread deployment of CCS, restricting its growth and scalability.

3. Lack of Public Awareness and Acceptance

The development and deployment of CCS technology often face resistance due to a lack of public awareness and understanding. While CCS has the potential to significantly reduce carbon emissions and mitigate climate change, public perception can be influenced by concerns over its environmental safety and long-term effectiveness. Some individuals and communities are skeptical about the ability of CO2 storage sites to securely hold large amounts of CO2 for extended periods, fearing that leaks could lead to environmental damage or health risks. In addition, misinformation or a lack of clear communication from stakeholders may amplify these concerns, leading to opposition from local communities, activists, and environmental groups. This lack of public trust and understanding can create challenges for governments and companies trying to implement CCS projects, particularly in regions where the technology is still emerging. Public opposition, if not addressed through education and engagement, can lead to delays, increased costs, or even the cancellation of CCS projects, further hindering the growth of the market. Therefore, fostering public acceptance through transparent communication, community involvement, and effective risk management strategies will be crucial to the successful adoption and scaling of CCS technologies.

Market Opportunities

1. Carbon Utilization and Enhanced Oil Recovery (EOR)

One of the most promising opportunities for the growth of the carbon capture and sequestration (CCS) market is the use of captured CO2 for Enhanced Oil Recovery (EOR). This process involves injecting CO2 into depleted oil reservoirs to increase oil extraction while simultaneously storing the CO2 underground. The use of CO2 for EOR has been widely practiced in the oil and gas industry for decades, but with the growing emphasis on reducing carbon emissions, it is increasingly viewed as a dual-purpose solution. Not only does EOR help companies boost oil production, but it also provides a method to store large volumes of CO2 that would otherwise contribute to global warming. This creates a win-win scenario where economic benefits from increased oil output are balanced with environmental gains from reducing atmospheric CO2 concentrations. As demand for oil and gas continues globally, and with the push for sustainability in the energy sector, the potential for EOR as a significant component of CCS strategies is expected to expand. This synergy between carbon capture and oil recovery offers both immediate economic incentives and long-term climate benefits, making it a critical area of growth for the CCS market.

2. Emerging Markets in Asia-Pacific and Africa

The Asia-Pacific and Africa regions are increasingly becoming focal points for the adoption of CCS technologies, driven by rapid industrialization and rising energy consumption. Both regions are experiencing significant growth in sectors such as manufacturing, energy production, and transportation, all of which are major contributors to CO2 emissions. As a result, these regions face mounting pressure to mitigate climate change while continuing to fuel their economic growth. CCS presents an effective solution to this challenge by enabling industries to reduce their carbon footprints without sacrificing economic development. In Asia-Pacific, countries like China, India, and Japan are already exploring CCS as part of their strategies to meet climate targets, while Africa, with its emerging economies and rapidly expanding industrial base, is also looking to CCS as a means of balancing economic growth with environmental responsibility. The growing interest in carbon capture technologies in these regions presents significant opportunities for market expansion, especially with the increasing international focus on climate action and sustainable energy solutions. As these regions continue to develop and industrialize, CCS will play a crucial role in their transition to low-carbon economies, ensuring that growth does not come at the expense of the environment.

3. Integration with Renewable Energy Projects

The integration of CCS technologies with renewable energy projects, particularly Bioenergy with Carbon Capture and Storage (BECCS), is a key opportunity for achieving negative emissions and advancing global carbon management strategies. BECCS involves capturing CO2 generated from biomass energy production (such as from biofuels or waste-to-energy plants) and storing it underground, effectively removing carbon from the atmosphere. This combination of renewable energy generation and CCS allows for the creation of a carbon-negative energy system, where more CO2 is removed from the atmosphere than is emitted. This could become a critical solution for achieving net-zero emissions goals, particularly in hard-to-decarbonize sectors such as aviation, heavy industry, and agriculture. By integrating CCS with renewable energy projects, countries and industries can not only offset emissions from fossil fuel use but also contribute to long-term carbon removal efforts, potentially reversing some of the damage already caused by greenhouse gas emissions. The combination of renewable energy with CCS provides a unique opportunity to balance emissions from non-renewable sources, supporting the development of a more sustainable, resilient energy system that can meet both current and future climate challenges. As the world focuses more on carbon neutrality and sustainability, the integration of CCS with renewable energy is expected to gain traction as a critical component of global climate strategies.

Segment Analysis

By Capture Source

• Chemicals
• Natural Gas Processing
• Power Generation
• Fertilizers Production
• Others

By End-Use

• Enhanced Oil Recovery {EOR}
• Dedicated Storage & Treatment

By Regional

North America (U.S., Canada, Mexico)

Europe (U.K., Germany, France, Italy, Spain, Russia, Denmark, Sweden, Norway, Benelux, Austria, Poland, Rest of Europe)

Asia Pacific (China, Japan, India, Australia, South Korea, Indonesia, Thailand, Malaysia, Singapore, Taiwan, Rest of Asia Pacific)

Latin America (Brazil, Argentina, Chile, Peru, Rest of Latin America)

Middle East and Africa (Saudi Arabia, UAE, Egypt, Kuwait, South Africa, Rest of Middle East & Africa)

Regional Analysis

North America

North America is expected to maintain its position as a dominant player in the global carbon capture and sequestration (CCS) market, largely driven by the United States. The U.S. government has introduced a variety of policies and incentives to stimulate investment in CCS technologies. One of the most prominent of these is the 45Q tax credit, which offers significant financial incentives to companies that capture and store CO2. This tax credit has played a crucial role in attracting both public and private sector investments into large-scale CCS projects. Additionally, the U.S. has set ambitious climate goals, including achieving net-zero emissions by 2050, which further reinforces the demand for CCS solutions across industries such as energy, manufacturing, and transportation. In Canada, significant progress is also being made in CCS, with multiple ongoing pilot projects focusing on reducing industrial CO2 emissions. The country is leveraging its vast natural resources and strong governmental support to establish itself as a leader in the CCS market. Canada’s commitment to achieving net-zero emissions by 2050 is pushing forward innovation in CCS technologies, particularly in the energy sector, where CCS can be crucial for meeting emission reduction targets.

Europe

Europe is a key region for CCS development, propelled by the European Union’s overarching goal of achieving net-zero emissions by 2050. The EU has consistently supported the growth of CCS technologies through financial backing, policy frameworks, and a strong commitment to climate change mitigation. Leading countries like Norway, the United Kingdom, and the Netherlands are at the forefront of CCS adoption, each hosting several pioneering projects. For example, Norway’s Sleipner CO2 storage project, operational since 1996, is one of the world’s first and most successful examples of CO2 storage in offshore reservoirs. The EU has been instrumental in fostering collaboration between governments, research institutions, and private companies to scale up CCS deployment. In addition to individual country efforts, the development of large-scale CCS hubs across Europe is emerging as a significant trend. These hubs are designed to facilitate the capture, transportation, and storage of CO2 from multiple industries in a cost-effective manner, further accelerating the adoption of CCS technologies in the region. As Europe continues to drive the transition to a low-carbon economy, the region is poised to remain a global leader in the advancement and deployment of CCS technologies

Asia Pacific

The Asia-Pacific region is set to experience substantial growth in the CCS market, driven primarily by China and Japan. China, as the world’s largest emitter of CO2, is under intense pressure to reduce its carbon footprint while continuing its rapid industrialization. The country’s heavy reliance on coal for energy production and its large industrial base make CCS an essential tool in its efforts to meet its climate targets, including achieving carbon neutrality by 2060. China is already investing heavily in CCS infrastructure, focusing on deploying the technology in power plants and industrial sectors. Japan is also making significant strides in CCS, with a strong focus on utilizing the technology in both power generation and industrial processes. Japan has set ambitious goals to reduce its carbon emissions, and CCS is seen as a key part of its climate strategy. The region’s growing recognition of CCS’s role in meeting sustainability targets, coupled with increasing government support, makes Asia-Pacific an attractive market for the technology. Furthermore, as Asia-Pacific countries strive to balance economic growth with environmental responsibility, the demand for CCS solutions is expected to rise rapidly in the coming years.

Latin America

Latin America is gradually emerging as a potential market for CCS, with countries like Brazil and Mexico leading the way in exploring carbon capture technologies. As the region continues to industrialize and experience growth in sectors such as energy production, agriculture, and manufacturing, the demand for CCS solutions is expected to rise, particularly to mitigate emissions from high-carbon industries. Brazil, with its large energy sector, including bioenergy, is showing increasing interest in using CCS as part of its broader environmental strategy, aiming to reduce emissions from both fossil fuel-based and renewable energy sources. Mexico is also exploring CCS as part of its efforts to comply with international climate agreements, particularly as the country seeks to balance economic growth with environmental responsibility. The region’s growing awareness of climate change and the need to address emissions presents significant opportunities for CCS adoption, particularly in sectors like oil and gas, energy production, and heavy industry. As Latin American countries continue to focus on sustainability and climate goals, CCS technologies will play a vital role in the region’s efforts to transition to a low-carbon economy.

Middle East & Africa

The Middle East and Africa region is emerging as an important market for CCS, driven by the oil and gas industry’s ongoing interest in carbon capture for enhanced oil recovery (EOR). Countries like Saudi Arabia, the United Arab Emirates (UAE), and South Africa are leading the charge in implementing CCS technologies as part of their broader climate strategies. For the oil and gas sector, CCS offers an effective means of reducing CO2 emissions while simultaneously boosting oil recovery rates, making it a valuable dual-purpose solution. Saudi Arabia, in particular, is investing heavily in both CCS and EOR technologies as part of its Vision 2030 strategy, which aims to diversify the country’s economy and reduce its reliance on fossil fuel exports. The UAE, with its ambitious sustainability agenda, is also integrating CCS into its long-term plans, with several major projects underway to reduce the carbon footprint of its energy sector. In South Africa, CCS is gaining momentum as part of the country’s efforts to transition to cleaner energy while maintaining economic growth. With increasing investments in renewable energy, the growing demand for CCS to support these efforts will create substantial market opportunities across the MEA region.

Key Players

Some of the key players operating in Global Carbon Capture and Sequestration Market include:

• Chevron Corporation
• Shell Global
• ExxonMobil Corporation
• TotalEnergies SE
• Equinor ASA
• Occidental Petroleum Corporation
• Halliburton Company
• Samsung Engineering Co., Ltd.
• Aker Solutions ASA
• Santos Ltd.
• Carbon Clean Solutions Limited
• NET Power
• Mitsubishi Heavy Industries, Ltd.

These companies are at the forefront of CCS technology development and deployment. They are involved in various stages of the CCS process, including capture, transportation, storage, and utilization, contributing to the rapid growth of the market.