Impact of COVID-19 on the Global Carbon Capture and Storage Market
Industrial processes and electricity generation using fossil fuels are taking place across the world, including the US, China, and India. These activities are integrated with carbon capture, utilization, and storage (CCUS) technologies to reduce their environmental impact. Carbon capture and storage has gained significant attention in the recent past. Moreover, with a supportive regulatory framework and financial aid, carbon abatement technologies have gained significant traction across several industries. However, the COVID-19 pandemic has significantly affected the carbon capture and storage market. The COVID-19 outbreak has negatively impacted the global economy, resulting in a financial crisis for all industries. Additionally, the potential economic slowdown will impact the investment decisions of several companies during the recovery phase of the global economy, leading to the potential delay of large-scale climate change projects aimed at reducing carbon emissions.
FIGURE: LARGE-SCALE CARBON CAPTURE AND STORAGE FACILITIES WORLDWIDE, AS OF 2019
The pandemic has impacted the carbon dioxide market to a greater extent in the US. As many businesses are closed and came to a halt, in the first quarter of the FY’2020, Renewable Fuels Association (RFA) announced that the ethanol plants in the US would be cutting output due to declining demand. Furthermore, the US ethanol producers had to shut down nearly two billion gallons of capacity on an annualized basis. Additionally, biofuels producers have also been impacted as all the major industries have attempted to contain the virus by shutting down the businesses. These factors have impacted the carbon capture and storage market, which is an important part of the carbon industry. On the other hand, Italy has also witnessed a greater impact on the carbon industry, as prices of gas and CO2 are low owing to delayed projects. The current capture prices do not justify the investments, and thus new entrants might have to wait for the market to stabilize in the next few months. This is expected to restrict the growth of the global carbon capture and storage market.
Source: Primary Experts, Secondary Sources, and MRFR Analysis
Source: Secondary Sources