World research and advisory firm Wood Mackenzie forecasted in its recent report "CCUS: Market Forecast for the Next Decade" that -- By2050, the size of the global CCUS (Carbon Capture, Utilization and Storage) market will increase 28 times, to an annual carbon dioxide processing capacity of 2.061 billion tons, and the market value will be over one trillion US dollars! This projection not only outlines the master plan of the low-carbon transformation of the energy industry, but also reveals the leading path for redrawing the world's energy tide.
Market Outbreak, the Trillion-dollar Blue Ocean Dawning Currently, the global evolution of CCUS is in its earliest phase. Statistics also show that countries around the world led by the United States, Canada, and Europe have committed to investing 80 billion US dollars in CCUS. However, the reality of the situation is that currently only 50 CCUS projects are in operation around the world with a total annual carbon dioxide sequestration capacity of 51 million tons. Wood Mackenzie predicts that capture capacity and storage capacity will have a difference of less than 20% in 2050 from nearly 50% in 2030. Despite the promising future, analytical agencies are not hopeful regarding recent development. Due to US policy volatility and slowness of Asian policy, Wood Mackenzie has lowered its ten-year projection by 22%. Data by Chinese Academy of Environmental Planning of Ministry of Ecology and Environment show that the market for China's CCUS emission cut is growing exponentially: 200 million to 408 million tons in 2030, 600 million to 1.45 billion tons in 2050, and will reach 1 billion to 1.82 billion tons in 2060. Coal power industry and cement sector will be the chief fields of application with 24% and 14% of CCUS emission cut respectively in 2060.
Global Majors Pile In on the Carbon Capture Track Faced with the trillion-dollar market potential, international oil giants have led the way. ExxonMobil revealed a groundbreaking proposal targeting the energy-guzzling US data centers recently. The company will build the world's first of its kind - producing electricity from natural gas while eliminating more than 90% of the carbon dioxide emissions and storing the sequestered carbon underground. ExxonMobil's Carbon Capture and Storage (CCS) technology has helped the steel, hydrogen, and ammonia production sectors with a storage capacity of 6.7 million tons of carbon dioxide annually.
ExxonMobil acquired CCUS specialist Denbury last year in an all-stock deal valued at $4.9 billion. Exxon acquired the United States' largest carbon dioxide pipeline network, covering a total of 1,300 miles, and 10 onshore sequestration sites. The CEO of ExxonMobil is sure that its low-carbon venture will be bigger than its traditional oil and gas venture in ten years' time, with revenues of hundreds of billions of dollars.
This year in June, Shell, Equinor, and TotalEnergies jointly announced an additional investment of $714 million in the Northern Lights CCS project. Previously, the project had signed an agreement with Sweden's energy firm Stockholm Exergi to supply it with 900,000 tons of carbon dioxide per annum for 15 years. The Northern Lights CCS project has increased its capacity from the initial 1.5 million tons/year to over 5 million tons/year, an over three-fold increase. US-based Occidental Petroleum has taken a different path and has invested $800 million to $1 billion in building the world's largest direct air capture (DAC) plant in the Permian Basin in Texas. The project will start constructing later this year and, having come on line in 2024, will be capable of capturing 1 million tons of carbon per year, 100 times the combined capture capacity of 19 current global DAC plants. In November 2024, bp revealed that it has made a final investment decision on the $7 billion Indonesia expansion of the Tanggu Phase II project. The $7 billion project will develop the offshore Wabodari gas field and specifically combine CCUS technology with onshore compressor facilities. It is scheduled to be the first to come into production in 2028. It is likely to be the first application of CCUS technology in Indonesia, which is expected to supplement the amount of natural gas resources by 3 trillion cubic feet and potentially sequester 15 million tons of carbon dioxide. In addition, bp has entered into low-carbon cooperation with China National Offshore Oil Corporation's Southern Exploration Company in 2023 to talk about the construction of clean and green oil fields and build a CCUS regional center in Hainan.
Groundbreaking of CNOOC's Offshore CCUS Project On May 22, China's first offshore CCUS project broke ground in the Enping 15-1 platform of the eastern South China Sea oilfield. The carbon dioxide utilized in oilfield development is compressed, purified, and pressurized to a supercritical state, and pumped into the subsurface reservoir exactly through a CCUS well at an initial rate of 8 tons per hour, which not only pushes up the production of crude oil but also sequestrates carbon dioxide, creating a new pattern of marine energy recycling of "utilizing carbon to mobilize oil and utilizing oil to store carbon.". The Enping 15-1 platform is the largest offshore oil field production platform in Asia at present, with an operating water depth of around 90 meters. Its oilfield group has a maximum daily crude oil production of over 7,500 tons. Among them, the Enping 15-1 oil field is a high-carbon dioxide oil field. When produced in the conventional mode, carbon dioxide will accompany the crude oil and be transported to the ground, corroding not only the equipment of the offshore platform and submarine pipelines but also promoting carbon dioxide emissions. In June 2023, CNOOC led the realization of China's first CCS demonstration project in China's offshore oilfield of Enping 15-1 oilfield. So far, nearly 200,000 tons of carbon dioxide have been reinjected successfully, providing a sustainable way to realize rapid carbon cuts.
Despite the extensive uses, the CCUS industry still faces a number of challenges. Wood Mackenzie suggested that policy uncertainty is the most significant threat. For example, the renewal of the US 45Q tax credit and the volatility of the EU carbon price may affect the economy of the project. Technologically, safety monitoring of long-term offshore sequestration and construction of carbon dioxide pipeline networks for transportation are still awaiting technological breakthroughs. Further, the legal framework for international carbon trade also needs to be strengthened with a sense of urgency. Nevertheless, these issues cannot be allowed to stand in the way of the development of the industry. With 2025 being the break year for the CCUS industry, more nations will introduce special support policies. For oil and gas companies, CCUS is not only an emission-reducing technology but also a transformative opportunity - by developing a carbon service value chain, the company can transform from being a pure energy supplier to a low-carbon solutions provider. Wood Mackenzie, the global research and consulting company, predicted in its latest report "CCUS: Market Forecast for the Next Decade" that -- By 2050, the global CCUS (Carbon Capture, Utilization and Storage) market size will increase 28 times to a processing capacity of 2.061 billion tons of carbon dioxide per year, and the market size will exceed one trillion US dollars! This prediction not only outlines the grand design for low-carbon upgrading the energy industry, but also points to the primary way towards re-forming the world's energy trend.
Market Outbreak, the Trillion-dollar Blue Ocean Unfolding Currently, the global development of CCUS is in its early stages. Statistics suggest that countries across the world, led by the United States, Canada, and Europe, have committed to investing 80 billion US dollars on CCUS. However, in practice, there are only 50 operational CCUS projects in the world today with an annual carbon dioxide sequestration capability of 51 million tons. Wood Mackenzie projects that the deficit in capture and storage capacity will narrow from nearly 50% in 2030 to 20% in 2050. Although there are rosy hopes, analysis agencies are wary of recent increases. Since US policies have been on hold and Asian policies have been moving slowly, Wood Mackenzie has downgraded its decade-long forecast by 22%. Research by the Chinese Academy of Environmental Planning of the Ministry of Ecology and Environment suggests that China's demand for cutting CCUS emissions grows exponentially: 200 million to 408 million tons will be needed in 2030, 600 million to 1.45 billion tons in 2050, and will hit 1 billion to 1.82 billion tons in 2060. Power generation using coal and cement production will be the major application areas, accounting for 24% and 14% of CCUS emission cuts respectively in 2060.
World Oil Majors Invest Heavily in Carbon Capture Path Ahead of the trillion-dollar market opportunity, world oil majors are spearheading the movement. ExxonMobil unveiled recently a game-changer strategy targeting US data centers' energy-thirsty market. The company will build the world's first such facility - combustion of natural gas to generate electricity and capturing more than 90% of the carbon dioxide released and storing the stored carbon underground. ExxonMobil's CCS technology has assisted the steel, hydrogen, and ammonia manufacturing industries, with an overall yearly storage capacity of 6.7 million tons of carbon dioxide.
ExxonMobil last year bought CCUS expert Denbury for $4.9 billion in an all-stock transaction. With this purchase, Exxon acquired the United States' largest carbon dioxide pipeline system with a total length of 1,300 miles, and 10 onshore sites for sequestration. The CEO of ExxonMobil is of the view that the firm's low-carbon business will double its conventional oil and gas business in the next ten years and earn hundreds of billions of dollars.
In June this year, Shell, Equinor, and TotalEnergies collectively announced they would invest a further $714 million in the Northern Lights CCS project. Previously, the project had agreed a contract with Stockholm Exergi, a Swedish utility, to get 900,000 tons of carbon dioxide a year for 15 years. Capacity of Northern Lights CCS project has been increased from the initial 1.5 million tons/year to over 5 million tons/year, an increase of over three times. United States-based Occidental Petroleum has taken a different route and put $800 million to $1 billion into making the world's biggest direct air capture (DAC) project a reality in Texas' Permian Basin. The project will break ground in the second half of this year and, once operational in 2024, will capture carbon at a rate of 1 million tons annually, 100 times the aggregate capture rate of 19 commercially operating DAC plants on the planet today. bp, on November 2024, announced having made a final investment decision on the $7 billion Tanggu Phase II project development in Indonesia. The $7 billion project will develop the offshore Wabodari gas field and innovatively integrate CCUS technology with onshore compression facilities. It is expected to first come into production in 2028. It is the first application of CCUS technology in Indonesia and is expected to contribute an additional 3 trillion cubic feet in volume to the natural gas reserves and sequester up to 15 million tons of carbon dioxide. Apart from this, bp also signed a low-carbon cooperation memorandum with China National Offshore Oil Corporation's Southern Exploration Company in 2023 to construct clean and green oil fields and set up a CCUS regional center in Hainan.
CNOOC's Offshore CCUS Project Breaks through On May 22, China's first offshore CCUS project was put into operation in the Enping 15-1 platform in the eastern South China Sea oilfield. The associated carbon dioxide from oilfield development is trapped, purified, and compressed to supercritical, and subsequently controlled-injected into the underground reservoir by a CCUS well with an initial rate of 8 tons per hour, not only promoting the growth of crude oil production but also carbon dioxide storage, forming a new mode of marine energy recycling of "using carbon to drive oil and using oil to fix carbon". The Enping 15-1 platform is currently the largest offshore crude oil production platform in Asia with an operating water depth of about 90 meters. The daily maximum crude oil production of the oilfield group that it develops exceeds 7,500 tons. Among them, the Enping 15-1 oilfield is a high-carbon dioxide oilfield. If built in the conventional form, carbon dioxide will be taken down with the crude and to the surface, not just corroding the facilities of the offshore platforms and submarine pipelines but also emitting more carbon dioxide. In June 2023, CNOOC commissioned the first CCS (Carbon Capture and Storage) demonstration project for China's offshore oilfield at Enping 15-1 oilfield. Up to now, nearly 200,000 tons of carbon dioxide have been injected, providing a potential solution to on-the-spot carbon reduction.
However, despite extensive potential there is still, the CCUS sector remains to encounter quite a number of challenges. Wood Mackenzie reported that policy risk remains the greatest threat. For example, the US 45Q tax credit and the ambiguity of the EU carbon price may affect project economics. Technologically, long-term offshore sequestration security observation and carbon dioxide pipeline networks building are still waiting for technological breakthroughs. Further, the law of transboundary carbon trade needs to be corrected within an emergent process. However, these matters cannot stop the industry from moving forward. As 2025 becomes a breakthrough year for the CCUS industry, more countries will introduce special supportive policies. To oil and gas companies, CCUS is not only a pollution-reducing technology but also a paradigm-shifting opportunity - by building a carbon service system, the company can transform from simple energy supplier to low-carbon solution provider.