Service sector spending on carbon capture and storage (CCS) developments is set to skyrocket this decade, quadrupling from 2022 to 2025, with cumulative global expenditure over the next three years topping $50 billion, Rystad Energy research indicates.

Total spending for announced commercial projects in 2022 is projected to hit $4.4 billion, up from $2.8 billion last year. Outlay is then expected to nearly triple in 2023, topping $11 billion for the year. Projections show 2024 and 2025 will see an additional $18 billion and $19 billion, respectively, bringing the projected total to $52 billion by the middle of the decade. These totals only include announced projects, assuming all projects move ahead as planned, and do not account for pilot or demonstration-only developments.

The cash will be spent on a broad range of services related to the installation of the capture unit, transportation of the carbon dioxide (CO2) and storage. Europe and North America will drive spending, with 63 out of the 84 announced commercial CCS projects expected to start operations by 2025 situated in these two regions.

“CCS technology is viewed as a fundamental component of the societal decarbonization required for a successful energy transition. Although the technology dates back to the 1970s, the number of CCS project announcements has surged in the last two years, and service sector spending is expected to go through the roof in the coming years as a result,” says Lein Mann Hansen, Rystad Energy senior analyst.

There are 56 commercial CCS projects already in operation globally, capable of capturing up to 41 million tonnes per annum (tpa) of CO2 across various industries. Based on already announced projects, nearly 140 CCS plants could be operational by 2025, capturing at least 150 million tpa of CO2 if all projects move ahead as scheduled. These projects are currently in various stages of development, including feasibility, concept and construction.

Almost two-thirds of the total service spending will go towards equipping the facility with the CO2 capture component and maintaining operations. Engineering, procurement, construction and installation (EPCI) costs will be the primary driver of spending, contributing about $35 billion to the $55 billion total by 2025. Annual EPCI spending will hit $12 billion in 2025, a more than 300% increase from the $2.8 billion projected for this year.