USA Carbon Capture, Utilization, and Storage (CCUS) Market Outlook to 2030

USA Carbon Capture, Utilization, and Storage (CCUS) Market Overview

• The USA CCUS Market is valued at USD 13.9 billion, driven by a combination of government initiatives and private sector investments aimed at achieving decarbonization goals. The strong demand for carbon capture technologies stems from the need to reduce industrial CO2 emissions and meet climate targets, which are being reinforced by tax incentives like the 45Q Tax Credit and federal funding programs through the Department of Energy (DOE). These factors have accelerated the adoption of CCUS across power generation and heavy industries, which are significant contributors to carbon emissions.

• Dominant cities and regions within the USA CCUS market include the Gulf Coast (Texas and Louisiana) and the Midwest (Illinois Basin). The Gulf Coast dominates due to its dense industrial clusters and proximity to viable geological storage sites for CO2, which are essential for carbon sequestration. Additionally, Texas's well-established infrastructure for Enhanced Oil Recovery (EOR) has made it a hub for integrating CCUS technologies. The Midwest, with its industrial base and geological features, is also emerging as a key region for CCUS activities.
• In 2022, the 45Q tax credit include significant increases to incentivize carbon capture and storage projects. As part of the 2022 Inflation Reduction Act, credits for carbon capture rose to $85 per ton for geologically sequestered CO2 and $60 per ton for CO2 utilized, including enhanced oil recovery. Direct Air Capture facilities now qualify for up to $180 per ton for sequestration. Additionally, the construction eligibility window was extended to 2033, expanding the scope and long-term support for CCUS initiatives.

USA Carbon Capture, Utilization, and Storage (CCUS) Market Segmentation

By Technology: The USA CCUS market is segmented by technology into pre-combustion capture, post-combustion capture, and oxy-fuel combustion. Recently, post-combustion capture has held a dominant market share due to its suitability for retrofitting existing power plants and industrial facilities. The ability to install carbon capture units on pre-existing infrastructure without significant modifications gives post-combustion capture a competitive edge. This technology is particularly favored in power generation and industrial processes where minimizing operational disruptions is crucial.

By Application: The CCUS market is segmented by application into power generation, industrial processes, and Enhanced Oil Recovery (EOR). Power generation is the dominant segment, primarily driven by the increasing demand for cleaner energy production. This segment benefits from significant government support and regulatory pressure to decarbonize electricity production. Utilities are rapidly adopting CCUS technologies to reduce their carbon footprint while maintaining energy output, making power generation the key application driving CCUS market adoption.

USA Carbon Capture, Utilization, and Storage (CCUS) Market Competitive Landscape

The market is dominated by a few key players, including both energy giants and innovative startups. Companies like ExxonMobil and Chevron are leveraging their extensive experience in the oil and gas industry to integrate CCUS into their operations, particularly in the context of Enhanced Oil Recovery (EOR). These firms, along with innovators such as Carbon Clean and Global Thermostat, are at the forefront of technological advancements in carbon capture and storage.

USA Carbon Capture, Utilization, and Storage (CCUS) Industry Analysis

Growth Drivers

• Energy Transition and Net-Zero Targets: The push for net-zero emissions by 2050 is accelerating CCUS adoption in the USA. The Bipartisan Infrastructure Law (BIL), signed in November 2021, allocates over $1 trillion in public investment, with a significant portion directed towards carbon capture and storage initiatives, supporting large-scale deployment of CCUS technologies across various industries to reduce carbon emissions.
• Industrial Decarbonization Initiatives: Industrial sectors like cement, steel, and chemicals contribute to the U.S. emissions. CCUS is a central component in their decarbonization strategy. For instance, in the cement industry alone, the deployment of CCUS could reduce emissions by 400,000 metric tons annually by 2025. The Concrete Zero initiative, are coordinating a business commitment to use 100% net-zero concrete by 2050.
• Advances in Carbon Utilization Technologies: Advances in carbon utilization technologies are transforming captured CO2 into valuable products like synthetic fuels and building materials. These innovations offer new opportunities for industries to convert emissions into useful resources, driving growth in sectors such as construction and energy. Government-supported programs are actively investing in projects that aim to enhance the conversion of CO2 into concrete, chemicals, and other materials, further encouraging the adoption of these advanced technologies.

Market Challenges

• High Costs of Infrastructure and Storage: Implementing CCUS technologies involves significant financial challenges, particularly in the development of infrastructure. The construction of pipelines and storage facilities for large-scale CO2 sequestration requires substantial investment, which can create financial strain for industries looking to adopt CCUS. These high costs are a major barrier to widespread implementation, making it difficult for companies to justify the expense without sufficient financial support or incentives.
• Uncertainty in Policy Support: Despite federal initiatives like the 45Q tax credit and funding programs, there remains uncertainty around long-term policy support for CCUS. Shifts in political priorities or leadership can affect the consistency of incentives and funding, which creates hesitation for industries considering CCUS adoption. Additionally, many states lack clear policy frameworks to support the development of CCUS infrastructure, leading to concerns about future regulatory stability.

USA Carbon Capture, Utilization, and Storage (CCUS) Market Future Outlook

The USA CCUS market is expected to witness substantial growth over the next five years, driven by continuous government support, advancements in carbon capture technologies, and increasing private sector investments. The implementation of federal policies such as the 45Q Tax Credit and various DOE funding initiatives is expected to further accelerate the development of new CCUS projects. Additionally, emerging innovations in CO2 utilization and the scaling up of Direct Air Capture (DAC) technology will play a critical role in driving the future market trajectory.

Market Opportunities

• Technological Innovations in CO2 Utilization: Advancements in CO2 utilization technologies are creating new opportunities for growth by transforming captured carbon into valuable products such as concrete, biofuels, and polymers. These innovations turn CO2 from a waste product into a resource, offering industries the potential for new revenue streams. Continued research and development in this area is driving further advancements, enabling broader adoption of these technologies across various sectors.
• Public-Private Partnerships: Public-private partnerships are playing a crucial role in expanding CCUS projects. Collaborations between the government and major corporations are driving the development of large-scale carbon capture initiatives. These partnerships combine private sector innovation and resources with government support, accelerating the implementation of CCUS facilities and contributing to the broader adoption of carbon capture technologies across industries.