Carbon Capture and Sequestration Market to Reach USD 13.2 Billion by 2036, Driven by Policy-Backed Storage Hubs and 45Q Incentives: FMI

The global carbon capture and sequestration (CCS) market is entering a decisive growth phase, transitioning from oil-linked recovery economics to policy-supported dedicated storage models. According to the latest analysis by Future Market Insights (FMI), the market was valued at USD 5.0 billion in 2025 and is projected to grow to USD 5.5 billion in 2026, reaching USD 13.2 billion by 2036, expanding at a 10.1% CAGR over the forecast period.

FMI's findings indicate that the anticipated USD 7.7 billion absolute dollar opportunity between 2026 and 2036 reflects structural infrastructure expansion rather than incremental capacity additions alone. Growth is increasingly anchored in integrated capture, transportation, and permanent geological storage networks.

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Market Evolution: From EOR to Dedicated Storage Revenue Stacks

Historically, CCS deployment was concentrated in natural gas processing and enhanced oil recovery (EOR). However, project valuation is now shifting toward standalone storage hubs monetizing tax credits and compliance carbon markets.

Nikhil Kaitwade, Principal Consultant - Oil & Gas at FMI, states:

"Project economics are moving beyond oil price exposure. Developers securing Class VI well permits and aggregating industrial emissions into shared transport networks are achieving per-tonne costs below USD 40. Dedicated storage revenue stacks-combining federal tax credits and carbon allowances-are unlocking previously uneconomic capture volumes."

This transition is reshaping investment strategies across North America and Europe.

Key Market Highlights

2025 Market Value: USD 5.0 billion
2026 Estimated Value: USD 5.5 billion
2036 Forecast Value: USD 13.2 billion
CAGR (2026-2036): 10.1%
Absolute Dollar Growth: USD 7.7 billion
Demand Catalysts Accelerating Investment

Policy Incentives and 45Q Tax Credit Expansion
The U.S. Inflation Reduction Act strengthened Section 45Q incentives, offering:

USD 85 per tonne for dedicated storage
USD 60 per tonne for enhanced oil recovery
Direct pay mechanisms to improve project financing
Additionally, federal funding through infrastructure legislation is accelerating CO2 transport and storage infrastructure build-out.

Emissions Trading and Carbon Pricing
In regulated markets where carbon allowance prices exceed capture costs, CCS deployment becomes economically viable. EU carbon prices above €80 per tonne, along with compliance mechanisms such as the Carbon Border Adjustment Mechanism (CBAM), are supporting industrial adoption.

Industrial Decarbonization Imperatives
Hard-to-abate sectors-including cement, steel, chemicals, and hydrogen production-face process emissions that cannot be eliminated through electrification alone. CCS remains a critical pathway for these industries to meet net-zero commitments.

Segment Insights

Capture Source: Chemicals Lead with 34.7% Share

The chemicals segment dominates capture sources, accounting for 34.7% of market share in 2025. High-purity CO2 streams from ammonia and hydrogen production enable lower capture costs compared to dilute flue gas applications.

Natural gas processing follows, supported by inherent CO2 separation during methane purification. Power generation and fertilizer production also contribute, though with higher cost structures in dilute emissions streams.

End-Use: Enhanced Oil Recovery Holds 58.3% Share

Enhanced oil recovery remains the largest end-use segment at 58.3% share, leveraging established CO2 pipeline networks in oil-producing regions such as the Permian Basin and Alberta.

However, dedicated storage is the fastest-growing segment, driven by:

Higher 45Q incentives (USD 85/tonne)
Reduced oil price volatility exposure
Development of saline aquifer injection hubs
Regional Outlook

North America leads global CCS expansion, supported by Class VI well permit approvals, Gulf Coast industrial clusters, and hydrogen hub integration strategies.

Europe is advancing through policy innovation and North Sea storage hub development aligned with Net Zero Industry Act targets.

Asia-Pacific maintains steady growth momentum through national decarbonization roadmaps and industrial cluster deployment programs

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Technology and Cost Trends

Second-generation amine solvents are reducing regeneration energy requirements from 3.5 GJ/tonne to approximately 2.2 GJ/tonne, lowering operational costs. Membrane separation technologies are improving capital efficiency while maintaining 90% capture rates.

Direct air capture remains above USD 600 per tonne but is expected to decline as deployment scales. FMI emphasizes that cost competitiveness increasingly depends on shared infrastructure-where aggregated transport and storage networks reduce per-tonne economics through economies of scale.

Frequently Asked Questions (FAQs)
How large is the global carbon capture and sequestration (CCS) market in 2026?
The global carbon capture and sequestration market is estimated to reach USD 5.5 billion in 2026, reflecting accelerating investments in industrial decarbonization and carbon management infrastructure.

What will be the market size by 2036?
The CCS market is projected to expand to USD 13.2 billion by 2036, driven by supportive policy frameworks, large-scale project deployment, and private sector climate commitments.

What is the expected growth rate between 2026 and 2036?
Demand for carbon capture and sequestration is forecast to grow at a compound annual growth rate (CAGR) of 10.1% during the 2026-2036 period.

Which capture source segment is expected to lead global sales?
The chemicals segment is poised to dominate the capture source category, accounting for an estimated 34.7% market share in 2025. High-purity CO2 streams from ammonia and hydrogen production facilities enable lower capture costs and improved economic viability.

How important is enhanced oil recovery (EOR) in CCS deployment?
Enhanced oil recovery remains a major driver of CCS implementation, representing approximately 58.3% of total end-use share. EOR projects generate incremental oil revenue while simultaneously enabling long-term CO2 storage in depleted reservoirs.

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About Future Market Insights (FMI)

Future Market Insights, Inc. (FMI) is an ESOMAR-certified, ISO 9001:2015 market research and consulting organization, trusted by Fortune 500 clients and global enterprises. With operations in the U.S., UK, India, and Dubai, FMI provides data-backed insights and strategic intelligence across 30+ industries and 1200 markets worldwide.

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