Despite the recent surge of policy incentives for carbon capture projects, the world is not on track to meet the CO₂ reductions expected from this technology by 2050:

• Supercharged incentives for carbon capture projects in the last year have accelerated the momentum that this market is experiencing. From the USA, increasing more than 70% the tax credits for carbon capture projects, to Europe looking into mandating 50MMTPA of CO₂ storage for oil and gas producers, the policy landmark for carbon capture projects is evolving quickly to improve the conditions for this technology.
  
  
• Despite the expected momentous growth in carbon capture (see the S&P Global Commodity Insights CCUS projects analytics dashboard - part of the Clean Energy Technology service), more efforts are needed to close the gap between the projected CO₂ capture capacity installations and the expected CO₂ reduction amounts to meet the climate ambitions. S&P Global developed a bottom-up outlook for CO₂ capture capacity installations using an "emitter-driven" methodology that incorporates: S&P analysis on country attractiveness, S&P CCUS project analytics, S&P database on emitters profile, carbon pricing and emissions, expertise of S&P's industry and regional specialists, and characterization of high-level CO2 storage capacity.
• The S&P Global Commodity Insights outlook indicates that by 2030, we will have operational projects able to capture around 25% of the 1 Gigaton of CO₂/y needed to meet the Net Zero Scenario from the IEA, putting in perspective how even in the short-term we are far from meeting the climate goals. Although North America and Europe are leading the way accounting for more than 67% of the projected capture capacity installed, the CCUS industry still needs more incentives from other regions to get closer to the climate targets.
  
  
• The gap is exacerbated when the S&P Global Commodity Insights CCUS capture capacity outlook by 2050 is compared to scenarios like the IPCC-1.5 degree Celsius. Our S&P Global outlook estimates the capture capacity will reach 2.2 Gigaton of CO₂/y by 2050 mainly driven by China, which translates into only 4% of the expected CO₂ reductions by the IPCC-1.5-degree Celsius scenario. Although S&P outlook estimates a historical growth in capacity installations for the next three decades, the CCUS industry still needs a significant improvement in the crucial drivers like policy, technology innovations and CCUS hubs to close the gap between the expected and the needed capture capacity to meet our climate targets.
  
  

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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.