Decarbonizing Energy: The Growth Trajectory of CCS in Global Power Generation Market

According to a new report published by Allied Market Research titled, "Global Carbon Capture and Storage (CCS) in Power Generation Market by Fuel Type, Service and Technology: Global Opportunity Analysis and Industry Forecast, 2022-2032." The CCS in power generation market size was valued at $ 131.2 million in 2022 and is projected to reach $450.5 million by 2032, growing at a CAGR of 11.7% from 2023 to 2032. Canada is the dominating country with the largest share.

The global carbon capture and storage (CCS) market in power generation is gaining significant traction as nations intensify efforts to combat climate change. With power plants accounting for a substantial portion of worldwide CO2 emissions, CCS technology has emerged as a critical solution to decarbonize fossil fuel-based electricity generation. This innovative system captures up to 90% of CO2 emissions from coal and natural gas power plants before they enter the atmosphere, storing them safely underground in geological formations. As countries strive to meet Paris Agreement targets and implement net-zero strategies, CCS presents a viable pathway to reduce emissions while maintaining energy security during the transition to cleaner energy systems.

Market growth is being driven by tightening environmental regulations, carbon pricing mechanisms, and increasing investments in sustainable energy infrastructure. The technology is particularly crucial for industrial economies reliant on fossil fuels, allowing them to extend the operational life of existing power assets while dramatically lowering their carbon footprint. Recent advancements in capture efficiency and cost reduction, coupled with emerging opportunities in CO2 utilization, are making CCS increasingly economically viable. However, the market's expansion faces challenges including high initial costs, infrastructure limitations, and the need for supportive policy frameworks to accelerate widespread adoption across the power sector.

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Carbon Capture and Storage (CCS) in Power Generation: A Key Solution for Climate Goals

Driving Forces Behind CCS Adoption
The global push to reduce CO2 emissions is accelerating the adoption of carbon capture and storage (CCS) in power generation. With worldwide CO2 emissions reaching a record 36.8 gigatons in 2022 (IEA), governments and industries are prioritizing CCS technology to meet climate targets. This system captures CO2 from fossil fuel-based power plants-particularly coal and natural gas-preventing emissions from entering the atmosphere. Beyond environmental benefits, CCS fosters job creation, economic growth, and technological innovation, positioning it as a critical component of the energy transition.

Market Growth and Industry Potential
The CCS market is poised for significant expansion as nations implement stricter emissions regulations and carbon pricing mechanisms. Power plants integrating CCS can continue operations while drastically reducing their carbon footprint, making the technology essential for balancing energy security with sustainability. Additionally, advancements in CO2 utilization-such as enhanced oil recovery (EOR) and synthetic fuel production-are creating new revenue streams, further incentivizing adoption.

Challenges: Storage Limitations and Infrastructure
Despite its promise, CCS faces a major hurdle: limited storage capacity. Suitable underground sites (depleted reservoirs, saline aquifers) are geographically constrained, and competition from other industries (oil & gas) exacerbates the issue. Scaling CCS requires expanding storage infrastructure, improving CO2 transportation networks, and establishing supportive policies to encourage investment.

The Role of CCS in Natural Gas Power Plants
While natural gas is cleaner than coal, it still generates substantial CO2 emissions. CCS enables gas-fired plants to further reduce their climate impact, making them more compatible with net-zero goals. As renewable energy integration grows, CCS-equipped gas plants can provide flexible, low-carbon backup power, ensuring grid stability during the energy transition.

The Path Forward
For CCS to reach its full potential, collaboration among governments, energy firms, and tech innovators is crucial. Strategic investments in storage infrastructure, policy incentives, and R&D will determine how effectively CCS contributes to global decarbonization efforts. With the right support, CCS can play a transformative role in achieving a sustainable energy future.

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The CCS in power generation market report is segmented based on fuel type, service, technology, and country. By fuel type, the market is divided into coal, natural gas, oil, and others. Based on the service, it is categorized into capture, transport, and storage. Based on technology, it is classified into pre-combustion capture, oxy-fuel combustion capture, and post-combustion capture. Country-wise, the market is studied across the U.S., Canada, China, and the rest of the world.

Based on the technology, the CCS in power generation market is classified into pre combustion capture, oxy-fuel combustion capture, and post combustion capture. Oxy-fuel combustion capture is projected to be the fastest-growing segment and post-combustion capture has garnered the highest share of the CCS in power generation market growth.
The major players that operate in the global CCS in power generation industry analysis are MITSUBISHI HEAVY INDUSTRIES, LTD., Linde plc, Shell plc, Exxon Mobil Corporation, JGC HOLDINGS CORPORATION, NRG Energy, Inc., Honeywell International Inc.., General Electric, Fluor Corporation, Siemens Energy.

Country Analysis
Canada is projected to register robust growth during the forecast period. Stringent environmental regulations and policies aimed at reducing greenhouse gas emissions have significantly contributed to the expansion of the CCS market in Canada. The government in Canada has implemented various carbon pricing mechanisms, emission reduction targets, and other regulatory frameworks that incentivize the adoption of CCS technologies. For instance, in December 2020, the Canadian government proposed Clean Fuel Standard regulations.

A possible approach for earning Clean Fuel Standard compliance credits is through projects that use CCS to reduce the lifecycle carbon intensity of fossil fuels. In addition, Canada's Budget 2021 proposed an investment tax credit for capital spent on CCUS projects, to reduce CO2 emissions by at least 15 Mtpa by 2022. In addition, advancements in CCS technology, such as improved capture efficiency could make it more attractive for power producers to adopt. Furthermore, a rise in public awareness and concern about climate change drive demand for cleaner energy sources, making CCS a more viable option for power generation. Furthermore, international pressure to meet emission reduction targets could also encourage the adoption of CCS technology in Canada.

Key Findings of the Study
• Based on the fuel type, the coal segment is projected to be the fastest-growing segment in terms of revenue, during the forecast period.
• based on the service, the capture segment is expected to be the leading segment during the forecast period.
• Depending on the technology, the oxy-fuel combustion capture segment is projected to be the fastest-growing segment in terms of revenue, during the forecast period.
• Country-wise, Canada garnered a major share in 2022 in terms of revenue.

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