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Several trends stand out behind this projected growth. The first is increased support for politics. In the US, the IRA raises Section 45K tax credits from $50 per ton to $85 per ton of CO2 captured and stored, and the value increased to $180 per ton for direct air capture, a more expensive technology that directly removes CO2 from the atmosphere and gets all greater popularity.
- Investment in infrastructure
In addition, the Infrastructure Investment and Jobs Act invests $11 billion in CCS demonstrations and networks. Together, these policies will increase project revenue streams, foster technological progress, improve related infrastructure, and solidify US technology leadership.
In Europe, funds have been made available to facilitate the development of CCS. The EU Innovation Fund, which was created in 2020 to help deliver on the bloc’s climate goals, has supported multiple CCS projects this year. The Dutch Sustainable Energy Transition Subsidy Scheme (SDE++), part of which is dedicated to financing CCS projects, has been increased from EUR 5 billion to EUR 13 billion. In the UK, the government has established the CCUS Innovation Program to advance related research and the CCS Infrastructure Fund to develop CCS networks.
We will see CCS technologies being applied to more sectors. Traditionally, CCS has been predominantly used in natural gas processing, where the CO2 separated from the purified natural gas is captured. But under urgent decarbonisation, CCS is expanding to other sectors such as hydrogen, energy, cement, iron and steel. This trend will continue among projects to be announced in 2023 — ultimately leading to a more diverse mix of CCS applications by 2030.
In parallel, there will be more projects that can permanently store and capture CO2, as opposed to using CO2 only for processes such as enhanced oil recovery. This will lead to greater reductions in CCS emissions.
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