Deployment of carbon capture and storage (CCS) technologies will have to increase over 100-fold to reach the kind of scale required to hit 2050 net-zero targets, according to consultancy McKinsey.
In its latest research looking at the CCS sector, McKinsey states CCUS technologies are being adopted “far too slowly” to provide a meaningful contribution in emission-mitigation efforts.
The consultancy estimated that CCS at scale could decarbonise as much as 45% of emissions from hard-to-abate industries including steel, cement, fertilisers and chemicals.
To achieve that target, and align with net-zero objectives, deployment of carbon capture infrastructure will need to increase 120-fold, the research stated, capturing at least 4.2 gigatonnes per annum of carbon dioxide by 2050.
That kind of scaling of the sector would require $130 billion in annual investment, which McKinsey states is to come from both public and private sources.
“While governments need to create the right tax and legislative frameworks to incentivise and de-risk private investment in CCUS, the industry itself must develop innovative new business models and new sources of revenue, rather than relying on limited state subsidies,” Luciano Di Fiori, partner at McKinsey, said.
Di Fiori said the sector cannot remain only “a waste-disposal service for CO2” but has to develop new business models related to the utilisation (CCUS) of captured carbon.
“It could be a potential feedstock for everything from cement and building aggregates to polyurethane foams and plastics,” he said.
Other commercialisation opportunities may arise in the sale of negative-emissions credits in the developing voluntary carbon markets, as well as premium-priced green products consumer segments.
Krysta Biniek, senior expert at McKinsey said scaling of the sector has so far “failed to materialise” but added: “Today, global decarbonisation targets and growing demand for green consumer products makes rapid scaling of CCUS not only possible, but necessary.”
McKinsey added that there is a “controversial” public perception of the sector — especially as it is perceived in relation to existing oil and gas assets — which has to be addressed by developers and policymakers to allow for quicker deployment.