Big Oil’s $1.2 Trillion Bet: WoodMac Predicts CCUS Market Surge
Global consultancy Wood Mackenzie has forecasted a 28-fold increase in the Carbon Capture, Utilisation, and Storage (CCUS) market by 2050, reaching 2,061 million tonnes per annum, surpassing trillions of dollars in value. Despite current challenges, with only 50 operational CCUS projects storing 51 million tonnes of CO2 annually, significant investments in CCUS technologies are anticipated to create fresh opportunities for oil and gas companies. Key players such as the U.S., Canada, and Europe have already committed $80 billion to CCUS initiatives.
Near-Term Challenges and Limited Emissions Abatement Potential
WoodMac, however, has revised its 10-year CCUS forecast down by 22% due to policy uncertainty in the U.S. and slow policy evolution in Asia. The consultancy predicts that many countries with carbon capture targets will only meet 50-70% of their goals by 2050. Even more concerning, point-source capture, despite growing investments, will only reduce 4% of total global emissions by 2050, far from the 6% required to meet the global goal of limiting warming to 2.5°C.
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Big Oil’s Multibillion-Dollar Investments and Global Expansion
Oil giants like Exxon Mobil, Shell, and Equinor are investing billions in CCUS, seeking to capitalize on the growing market. Exxon, for instance, is pioneering a project that will capture over 90% of CO2 emissions from U.S. data centers powering the AI boom. Exxon has also expanded its CCS technology to sectors such as steel, hydrogen, and ammonia production, with agreements to store up to 6.7 million tonnes of CO2 annually. Additionally, Shell, Equinor, and TotalEnergies have expanded their Northern Lights project, now able to store 5 million tonnes of CO2 per year, with significant investments from Swedish energy company Stockholm Exergi.
While Canada’s CCUS outlook remains uncertain, especially after the resignation of former Prime Minister Justin Trudeau, significant CCUS projects like the Pathways Alliance's $16.5 billion initiative hang in the balance. Despite the uncertainty, global investments in CCUS signal that the sector could be crucial in addressing climate challenges and driving economic growth in the coming decades.
