Carbon Capture, Utilization & Storage (CCUS)

Clear the air on carbon capture, reuse, and storage

Overview

Climate efforts so far have had limited tangible results, and global emissions have continued to increase every year, as current efforts to reduce emissions from hard-to-decarbonize industries such as oil and gas, power, steel, cement, fertilizers, etc., have been inadequate. Carbon capture is one method that can remove carbon dioxide (CO2) emissions from these heavy industries. Moreover, newer technologies like direct air capture (DAC) can also reduce the carbon footprints of industries that do not have active flue stacks, such as construction and data centers, as well as non-stationary emissions from transportation. Carbon capture technologies, along with utilization and sequestration, would play a vital role in quickly decarbonizing economies over the next few decades to reach aggressive zero-emission targets.

Industry Updates

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Market Sizing

The US CCUS market could reach USD 5.9 billion–12.8 billion by 2028

Conservative case

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Base case

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Expansion case

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Market Mapping


The next-gen carbon utilization segment has the highest number of startups followed by direct air capture (DAC) and flue-gas capture. This is likely due to the various pathways available to turn captured carbon dioxide (CO2) into valuable commercial products. 

There are only a few carbon sequestration startups, possibly due to challenges in commercial feasibility. The economic gain from storing captured CO2 underground is limited compared to converting it into commercial products. Meanwhile, a higher number of ideation and minimum viable product startups suggests that the industry is at a very nascent state. 

Incumbents
Expansion
Go-to-Market
Minimum Viable Product
Ideation
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Flue-gas Capture
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Direct Air Capture (DAC)
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Next-gen Carbon Utilization: Sustainable Fuels
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Next-gen Carbon Utilization: Other
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Carbon Sequestration
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Geotechnologies
Geotechnologies
Geotechnologies
Geotechnologies
Geotechnologies

The Disruptors


The industry is well funded. The average funding of the CCUS disruptors is around USD 50 million. LanzaTech is the highest funded and is a public company operating in the CCUS space. Climeworks, Svante and Twelve are some of the others that have raised more than USD 500 million. 

CCUS disruptors also seem to have long operational histories despite being in a nascent industry. An average disruptor has been in operation for nearly ten years, while some of them are yet to go to market. These longer development timelines suggest the need for heavy innovation in the industry.

Funding History

Competitive Analysis


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Incumbents


Incumbents dominate the flue-gas capture segment, with leading oil companies like Shell, ExxonMobil, and Oxy attempting to maintain the circularity of their operations by capturing and utilizing carbon dioxide (CO2) in enhanced oil recovery (EOR). Meanwhile, companies like Dakota Gas and Air Products capture CO2 from their operations and sell it to third-party EOR operators. Incumbent activity across direct air capture (DAC), next-gen carbon utilization, and carbon sequestration segments are largely limited.

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Notable Investors


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Market Sizing

The addressable market for Carbon Capture, Utilization & Storage (CCUS) in the US is estimated at USD 73.0 billion

The total addressable market (TAM) refers to the total revenue opportunity available for a product or a service, while the actual market is the market size based on revenue projections. 
We estimate a TAM of USD 73.0 billion in the US. The flue gas capture (USD 24.5 billion) and next-gen carbon utilization segments (USD 23.5 billion) are the largest. The addressable market for the direct air capture (DAC) segment is somewhat constrained (USD 17.0 billion) due to weaker affordability, while the carbon sequestration segment is affected by limited monetization opportunities (i.e., the limited economic gain from storing captured CO2 underground compared with converting it into commercial products). 
See Appendix for the breakdown and assumptions for TAM estimates. 
The actual market for CCUS is estimated at USD 475 million in 2023, with a penetration rate of just 0.7%. This is expected to grow at a healthy five-year compound annual growth rate (CAGR) of 80.6% to reach USD 9.1 billion in 2028, implying a penetration of 12.5%. 

Summary

Our conservative case expects the market to grow at a much slower five-year CAGR of 65.7% to reach USD 5.9 billion by 2028. This assumes slower carbon capture adoption and slower-than-expected progression in carbon utilization technologies. Our expansion case expects the market to grow at a five-year CAGR of 93.1% to reach USD 12.8 billion by 2028. This assumes the rapid progression and commercialization of next-gen carbon utilization pathways as well as carbon capture costs declining faster than expected. 
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