Switched OnInvestment in carbon capture and storage is skyrocketing. Last year, the technology attracted some $6.4 billion globally, more than double the year before. But why are industries now looking to Carbon Capture and Storage (CCS) to cut down on their carbon emissions, rather than other, better-established methods?
On today’s show, Dana sits down with Allen Tom Abraham and Anastasia Tomasidou from BNEF’s Sustainable Materials team. Together, they take a look at the various sectors that are utilizing CCS technology, methods of carbon capture and storage and potential bottlenecks in the existing system, and the role that policy plays in the expansion of CCS across the globe.
Today’s episode draws from the BNEF research note CCUS Market Outlook 2023.
Complimentary BNEF research on the trends driving the transition to a lower-carbon economy can be found at BNEF<GO> on the Bloomberg Terminal, on bnef.com or on the BNEF mobile app.
Links to research notes from this episode:
CCUS Market Outlook 2023 - https://www.bnef.com/insights/32621
This is Dana Perkins and your listening to Switched on the B and EF podcast. So back in twenty twenty was the last time that we dedicated an episode here on this show to carbon capture and storage, and at the time we discussed it in terms of an emerging technology which could become important in the future for reducing emissions. Well, perhaps now the future has come. Within the intervening period. CCS looks like it has been growing fast, with the investment in CCS having more than doubled year on year as of Q one twenty twenty three. The total capacity of projects under development as of late twenty twenty two stood at two hundred and forty four million tons per annum. That's up forty four percent from the year before. So which industries and sectors are driving this growth, why are they looking at CCS in particular, and how does it compare with other carbon abatement strategies. Today's show draws from the recent BNF Carbon Capture and Storage market outlook, and who better to speak with us about this topic than two members of our Sustainable Materials team. The head of the team, alent Tom Abraham, alongside Anastasia Tomasidu. Together, we discuss the different industries that are utilizing carbon capture and storage technology, including oil, gas, cement, and hydrogen and the costs involved for each along with other hard to abate areas. In the show, we also get into how carbon capture is transported and stored In addition to some of the surprising things that it can be used for, we also address the potential bottlenecks for storing CO two and whether it could pose a threat for the expansion of CCS. And lastly, we get into the role that policy plays in the adoption of CCS technology, in which countries are actively encouraging rollout with reforms and how effective they've actually been. As always, if you like this podcast, if you subscribe, you're going to receive an update when we publish future episodes, and if you give us a review on Apple Podcasts or Spotify or any other players, it will make us more discoverable by others. But right now, let's jump into my conversation with Alan and Anastasia about where the CCS market has gotten to since we last discussed it. Anna, thank you very much for joining today. Thank you and Alan, good to have you on the show.
As well.
Thank you, Dana. Very excited for this conversation.
Well, I'm looking forward to it because this is one of those topics that we're revisiting because things have changed, and that's always a good thing to see technology move forward and for markets to be this kind of constantly evolving thing. We're talking about carbon capture and storage today, and my first question is a definition, one which does seem to be where I head at the beginning of many shows, because there's a lot of vernacular and one thing I've noticed was that a couple of years back, everyone was saying CCUS as opposed to CCS. Now I'm noticing CCS being back as the go to term. Would you be able to clarify the difference between the two and essentially which term we're going to use for the remainder of our conversation today.
Carbon capture and storage is what is referred to as CCS, and carbon capture utilization and storage is what is referred to as CCUS. Now, the utilization part is important because a lot of companies previously thought that they could capture carbon and then use it for certain applications like creating synthetic fuels or any other particular applications that they would look for. But because of the maturity and policy, as well as some incentives that are coming out in certain markets which favor storage, the industry is starting to slowly shift towards storage, and that's becoming a more important part of the whole carbon captured discussion. And that's why you have rightly noticed that a lot of discussions are now focusing on ccs instead of ccus, but both are relevant.
What was the utilization part? What was it being used for in a way that was economically beneficial.
Historically most of it was used for enhancing oil production from oil wells. You captured the CU two injected to new oil wells and you increase the output from these oil wells. Or you could also use it for carbonation of beverages, for example, into your soda. That's also one particular application. Or you could use it as a greenhouse for increasing agricultural output in greenhouse versus agricultural production. So different applications, but not very scalable.
I would say it's possible I drank a soda of CCUS captured carbon. This is something that may have happened and I didn't even realize it.
Yes, if you were in the US, if.
I was in the US. We'll come to the regional aspect of this particular technology application in a minute, but let's talk a little bit right now about why this is time for us to be talking about this. This technology has become more prevalent, more often talked about, and really in your mind. I mean, I know why we asked you to come on the show, but why do you think that there was a catalyst for you to you talk about this topic and for us to revisit CCS at this time.
So in the last decade, we've seen huge investment in this technology, so many new projects and some Mu's news it says capacity being announced. Between twenty twenty since we last had a conversation, more than forty million tons of capacity has been announced, which might sound huge, but by the end of this decade, an additional three hundred and seventy million tons of zotocupture capacity has been announced. So this has been a massive change over the last few years.
This is something that we always try to look at how fast the industry is moving bar and we try to capture it in our market outlooks. And one of the things that we started noticing when we went about writing this market outlook was two other important things that were changing. One is we discussed about the use of carbon dioxide and where it eventually ends. And historically most of the carbon diexcite, like I mentioned, was used for enhanced soil togory. About sixty percent of the carbon great capacity historically used the CO two to enhance oil recovery. But when we look into the future twenty thirty twenty thirty five, we are starting to see that flip. About seventy five percent of the carbon capture capacity is now trying to use the carbon dioxide and storing it away permanently in deep geological reserves, when compared to just twenty five percent today. So huge shift in terms of like where we are sending the carbon dioxide that we're starting to capture. And the other one is, of course we're starting to see a divergence in terms of the geographical footprint of the projects that are starting to be announced. Historically, the US has been the largest market. The US continues to be the largest market, but new large projects are starting to come up in markets such as Canada, the UK, Germany, Netherlands, and even the Middle East. So that's another difference that we're starting to see when we look at the market over the last three to four years.
Just thought something to what Alan has just said.
Another pig defense is in which sector is the capacity is actually being added, And historically most of the capacity was in natural gas processing plants, but now we see lots of investment in sectors like hydrogen and cement and power, especially in the US, and this diversification in terms of verre city is supplied is also driving this huge capacity boom that we're seeing.
So you mentioned that the US has been and continues to be a dominant player in this space. So let's talk a little bit about the geographical split. This is a popular technology from what you're telling me, in the West, but why why do you think that it is found predominantly in North America and in Europe.
It's two reasons. One is, like I said, one of the reasons for the dominance of the US when it comes to carbon captic capacity is that the oil and gas companies in the US have been at the forefront of using this technology to improve the oil output from their production facilities. And that's one of the reasons that many of the projects that were initially located were in.
The US, and is that because perhaps national oil companies are less interested at least until this point, in directly managing their emissions with this technology.
It's two ways. One is the emissions is one part of it. The other part is, of course, like how do you increase the efficiency of your oil and gas production as well and improve its output. So I would say it's a balancing of both of these different parameters. But it also looks at how some of these US based oil and gas companies were looking at this technology as a way to understand how carbon capture works out. And there has been some historical incentives that also helped in propping up this industry in the US and even in markets like Canada where you used the captured carbon dioxide in order to extract more oil and it created a value stream for the captured carbon dioxide. Unfortunately, in other markets outside of North America, we did not see a value proposition for using the carbon dioxide that was captured, and that's as a result you see very little projects that were built in other markets. And when it comes comes to why the US is leading, a lot of that is coming down to again the activity of the largest players in the market today, they're understanding about the technology. And also because the Inflation Reduction Act actually came out with huge incentives that were offered to carbon capture projects over the next ten to twelve years.
So the usiras created financial incentives for this to do well. But before that took place, you mentioned efficiency being something that these companies, the oil and gas community is looking for when they're looking at ccs. Is it something that helps them make money in the right circumstances or is it always an additional cost For the.
Oil and gas companies, they had to pay a very small amount for getting the carbon dioxide from an industrial facility or even their own applications. So if they owned a refinery or if they owned a natural gas processing facility, they already had to remove the carbon dioxide from these processes and as a result, you ended up adding a cost to your existing operational facility. Now you could use that carbon dioxide to increase your oil output or your gas output on the other hand, which meant you created more value by using that cost to create more revenue or profit from using that. So that was basically the balancing act that the companies were trying to achieve.
Here has the emissions trading scheme in Europe, so the EU ETS has that been a big catalyst for ccs.
Like I said, the Europe has never been a big market for carbon capture and storage, except for some of the markets in the Nordics, such as Norway, where a certain carbon tax in the very early stages in the in the in the in the nineties, and you know in the early two thousands started promoting a lot of carbon capture projects in Norway. But beyond Norway, carbon capture has never been a tool that has been used effectively for emissions reduction in Europe.
Let's talk a bit about prices then, because we're here talking about different schemes that make it more than official in certain parts of the world because the government is supporting it. What is the current cost and really what are some of our projections around where ccs might go from a pricing standpoint.
So these one of the things we have recently explored in our research, looting at the cost of capture per ton of CO two in various different industries, some of which we've mentioned already, And the type of industry makes a huge difference because in each industry of gases that are emitted from which we capture the COO two from have varying concentrations of CO two. The higher the concentration, that cheaper it is to capture it. So for high concentration sources like natural gas processing and ethanol, the costs are cheaper and they vary between twenty to forty dollars per ton of CO two, whereas in other sectors where concentration of cootwo is lower, like in hydrogen and cement, the costs can be as high as eighty dollars per time, so almost double.
And this is because when concentration of cootwo is.
Lower, more energy is needed, more where solvents are needed, and per equipment is needed to capture the same amount of SOO two.
So let's talk about those industries where this is a really prime solution. You mentioned cement, steel, I'm hearing hard to abate sectors. This is one of the solutions for those parts of the economy that cannot electrify readily. What would you say, or maybe the top few, top five hard to abate sectors where CCS is really becoming increasingly popular.
There are two ways to look at it. One is based on the announced pipeline of projects from now through twenty thirty five, and the other is in sectors where it is essential to deploy ccs in order to get to net zero. So let me address it in two parts. On the first part, which is based on the announced pipeline of projects, when we look at the period from now through twenty thirty five, most of the carbon capture capacity is now targeted towards the production of hydrogen or ammonia, and again a large portion of it located in the US and then comes in streets such as power, where again about nineteen percent of the capacity by twenty thirty five based on the announced pipeline of projects, could be for capturing CU too from coal and gas power plants in various parts of the world substantial number again, and the third largest category when it comes to cthiu's capacity by twenty thirty five could be natural gas processing, which is the dominant use case today. So these three sectors still become one of the most important ones. But the interesting part here is that hydrogen and power were not historically big sectors for carbon capture, and they are starting to be emerges. Two very important sectors for carbon capture capacity by twenty thirty five, and you talked about hard to beat industries like cement and steel. These industries do require carbon capture in order to reduce emissions and to get to net zero. But when you look at the timeline between now and twenty thirty five, unfortunately very few companies are really looking at investing in this technology in order to reduce emissions. As a result, only about seven percent of the capacity by twenty thirty five could be deployed in these two sectors.
How low in CCS technology actually get the emissions coming from these sectors. I'm assuming that it does not get to zero, it does not wipe out the emissions. I'm also assuming that it varies widely depending upon the density of the carbon, as you had mentioned, So I guess what the question I'm really asking is how good is it? How effective is it in removing carbon from carbon intensive industries?
So this varies a lot. Most facilities aim for at least ninety percent of the COETO to be captured, and there's some facilities that have proven to be able to capture a ninety five percent. There's interesting companies that claim that they can capture more than ninety nine percent of their emissions. But this is something that has only been tested at small scale facilities and not actually been employed in commercial plants. So it's something that we're also finding very interesting. How much can they actually capture and can they prove that they can capture as much as they claim they come.
Well, then let's talk a little bit about the different technologies that are out there. What is the dominant CCS technology and is there a good amount of innovation either from within oil and gas companies who are using CCS or actually with startups that are VC funded. Really where's the change coming from in terms of advancement of this technology, because it's been around for quite some time. I mean, this has been a topic that the industry within decarbonization we have discussed for many years.
I guess let's start from the beginning. There's firstly, three main.
Parts of the process that we can capture CO two from pre combustion, post combustion, and oxy combustion capture, and their names kind of reveal what these means. So pre combustion removes COO two from fossil fuels before the fuel is actually burned, and this has a big benefit in the sense that this gas has high partial pressures of CO two, which makes the process quite efficient, but this is hard to retrofit and implement that existing facilities. Post combustion cupture happens after the fuel is combusted, and this is the most commonly used approach and what most of these large scale industrial plants use. Now, this is very easy to retrofit to existing plants, but is a less efficient process. And then, lastly, oxyfuel combustion is when instead of air, we use a pure oxygen stream for a combustion of the fuel and this generates a nearly pure stream of cootwo which bypasses any subsequent capture processes and the costs associated with them.
But how do we actually capture the CO two? How do we actually get it? So?
The liquid absorption is by far the leading and most mature technology and is the only technology that has been used in large scale commercial plants. In this technology, the CO two is essentially dissolved in a solvent, a liquid solvent and is then released to create this pure CO two stream that we can capture and the solvent is regenerated. Many companies provide this technology, for example, MHI it'swishy and shell. They provide aimine based solvents to capture CO two, and aimines have been around for years as this is the benchmark technology, it's what has been traditionally used. But today this is quite expensive, it has quite high energy requirements. It spares some environmental concerns in terms of aimines being leaked in the atmosphere. So there is a few companies that are working on developing new innovative solutions, solvents with different chemistries that don't rely on aimings at all, but also completely different approaches like solid absorption where the CO two is trapped but in the pores of very highly porced materials, or things like membrane.
Capture and by quite expensive. Put that in nominal terms for me.
So as we talked about earlier, this varies so much depending on the concentration of CO two in the off cases, and it can vary from around forty dollars per ton of CO two to eighty dollars per ton of CO two. But as mentioned, the energy requirements for these plants are huge.
Is there more to add? Are there more technology advancements that are quite different technically speaking from the one you just outlined.
So other than what I just talked about, so developing different new more efficient solvents, new sorpents, solid serpents, and membranes. Many companies are working on the equipment itself and how the process works. And many companies are not looking at creating modulary solutions, which makes capital expenditure much lower. They can create these standardized solutions that also leads to economies of scale, so they can reduce cost a lot. Many companies are looking at implementing KEAT integration and recovering their systems to lower these huge energy requirements that we talked about. These are some of the things they're working on. Also simpler things like the arrangement of the equipment, how them solid out serpents are packed in the equipment that's being used.
Just lots is going on.
So we're talking an awful lot about the captured technology, but I want to pivot a little bit to talking about what happens after we have all this carbon. So if it's not going into my next soda, where is it being stored and what are we actually doing with it to make sure that it doesn't go back into the atmosphere.
Very good question, thankfully, if it's in soda, it ends up in human beings. But otherwise what generly used to happen is it used to be used for enhanced oil recovery. And as I mentioned, most of the capacity that's expected to come in the next ten to fifteen years is actually now pivoting towards storing this carbon for long periods of time in deep geological reserves. It can be saliine equifers or depleted oil and gas reserves. About seventy five percent of the capacity, as I mentioned. Now, the big question there is whether we have the infrastructure to ensure that the CU two that is captured in these industrial facilities get transported and the storage facilities and the transport infrastructure is available. And that becomes another important aspect when we think about carbon captured.
Is it transported? Is it put on trucks, trains, pipelines.
It can be done on any of these, but typically most of them target to use pipelines, large pipelines where you compress the carbon dioxide into a fluid state and then push it along these pipelines into storage way wells which are either within land boundaries or even offshore. And it depends on the strategy from a company's perspective as well as you know what different countries have in mind when it comes to how to address the CEO to that is being captured.
We're putting it into the ground. Are there specific geological conditions which must be required in order to be able to store it or is it really just up to having the space from a land use standpoint in order to put it somewhere.
Typically the best places to park your CEO two is deep geological reserves like Celia aquifers, which are either found within land boundaries or even offshore. Now, what I mentioned when it comes to how different countries are looking at it differently, is that most of the capacity that is proposed, say in the US, looks at storing carbon dioxide within the land boundaries on shore, but when you come to Europe there's a slightly different approach where most countries like Germany for example, do not want carbon dioxide to be stored within their land boundaries and as a result, they want to push it outside deep offshore into depleted oil and gas reserves or even Serie aquifers which are offshore. So that becomes a different approach in how different countries identify where they want to store the carbon dioxide that's captured.
How do we ensure that it stays where it's being stored.
That's a very good question, and that's something that the industry is starting to like figure out in how do we ensure and monitor and verify that the carbon dioxide that we inject into these wells stay there for long? It depends on the specific geology in some certain cases, but overall, companies are starting to use technology AI and the deep machine learning as well as digital expertise that many of these oil and gas companies have developed over the last few years to understand how the geology in these wells work and how it behaves as you inject more carbon dioxide into these wells. And they're starting to put up new technology which will continuously measure if what they're trying to achieve is being achieved in terms of keeping the carbon dioxide in there for long periods of time.
So you reference the transportation in storage is a bit tricky. How tricky is this how well? Actually, to put it in another way, we were talking earlier about technology advancements in terms of the actual capture technology. Are there a lot of eyes on trying to solve this transportation in storage question. And you know, I'm just sitting here having a moment also thinking about the fact that we recently did a show on grids and how incredibly underinvested and important they are for that sector. So I can only imagine that this has a similar parallel.
Absolutely, you're right in that you can draw a parallel to this, because transportation and storage is now looking like one of those factors that can be the biggest bottlenecks for this industry to scale again. In our market outlook, we try to track what is the announced capacity of transport in storage facilities that is being rolled out over the next ten to fifteen years, and what we see is that for the four hundred and twenty million tons of carbon captured capacity that could be online by twenty thirty five, only about two fifty million tons of transport and storage infrastructure is being proposed by the same period of time, So only about half of the captured carbon can be transported or stored based on the announced transport and storage infrastructure by twenty thirty five, which means this is going to be one of the biggest bottlenecks for the carbon captured facilities to scale. All these industries can capt carbon, but they don't know what to do with it.
Transporting anything over a distance is going to require permitting and a view on environmental impact in local communities. Not only well, there's two questions within this, how difficult is it to get these permits and then ultimately how long does it take to build some of these projects.
It is certainly turning out to be very difficult to get these new permits. Let me give you an example. Some of the projects that companies such as Summit Carbon Soedutions or Navigate to SEO two Ventures have now proposed in the US, which is by far the most mature market when it comes to carbon capture solutions, are now facing huge permitting delays because the initial applications that they submitted with states in the Midwest such as North Dakota or South Dakota were initially declined. And many of these companies, like Navigate to SEO two Ventures, are now saying these projects are on hold and we are now going to revisit the entire project and see where we can find other alternative paths to make these projects happen. So it is becoming a big hassle to build these pipelines and get the permits for these pipelines. And these are long infrastructure projects, long duration infrastructure projects. We can take six seven years sometimes in the making to build over thousands and thousands of miles.
I've got two questions. One is near term and one is long term. But let's start with the nearer term. And by nearer term, I mean let's say the next decade or so. How critical is this technology to the future of a net zero world when it comes to the oil and gas industry or in some of the hard twobate sectors that you also outlined that really rely on this technology to bring their emissions down.
So this decade has a huge impact on the long term, So let's talk about both. In our net zero scenario, as we said previously, in this decade, we expect carbon capture capacity to grow to around four hundred and twenty million tons, which is a huge number. But in our net zero scenario, this number for twenty thirty is one thousand, seven hundred and fifty million tons. That's one point seventy five billion tons of CO two. Now we need in our net zero scenario by twenty thirty, So as this makes it obvious that the announced projects are far behind what we need to see to twenty thirty to reach net zero, and we're touching up twenty thirty, but what about twenty fifty? So in twenty years time, by twenty fifty, in our net zero scenario, we expect cicis to contribute about ten percent of emissions of eightmen in power, twenty one percent in steel, and a huge seventy five percent in cement, which translates to about seven point five billion tons of CO two being captured to twenty fifty in order for us to reach net zero. So, going back to your question, we think it's going to be a massive contributor to being able to reduce AT emissions in various different sectors.
And for those who aren't familiar with the net zero scenario coming from benf it's part of our new energy outlook where we essentially start with the end in mind and we say, if we want to reach net zero as a planet by twenty fifty, what is it going to take for the different sectors that we cover in order for it to get there? And needless to say, there is a speed and scale discussion in the immediate term. I have a follow on question though, when it comes to this, which is, we know what it is that we need to do. But for those who are in businesses and looking at investing in technologies and large infrastructure projects, they want to make sure that these projects are going to continue to make money for them for a long period of time. The parallel I can think of is natural gas. If you're going to build a new gas fired power station, you want to know that you're going to be able to actually use it, and in some circumstances, the policy environment does not necessarily make that particular project favorable, even if it has a short term benefit from a carbon emission standpoint. So as we enter a phase where we're talking increasingly about oil demand dropping off and we may have actually already reached peak oil demand in the oil and gas industry and the application of CCS, do we have a feel for whether or not there's cause to be concerned on the CCS side of the business, or even in the transportation and storage end of things, not having a long term viable future for these technologies in the hum hypothetical world where we actually do decarbonize at the speed that we need to in order to reach net zero.
There are some industries which, even in the long term, do not have many pathways to completely face out the use of fossil fuels, and one of them is the petrochemicals industry. For example, the world is developing, population is rising, people are dependent more and more on consuming plastics, for example, or any other chemicals that are produced from the petrochemicals industry, and all of this petrochemicals industry would require some fossil fuel feedstock, which when it goes through the process in the petrochemical refineries, produces emissions, and you need to capture those emissions, and as a result, there is a stream of opportunity for carbon capture in that industry. For example. Similarly, for cement, the world is going to build more buildings, especially in the developing world, and we need cement to build the roads, the buildings, everything in these places. And cement has a particular feature in that the process involves creating about fifty to sixty percent of the emissions and not just the fuel that is burnt in the manufacturer of cement. So even if we in a hypothetical world entirely switch out the fuels in a cement manufacturing facility with clean fuels, you still end up having about fifty to sixty percent of CO two emissions from the process which needs to be captured. So there are these sectors which would still rely on CCS as a technology to abate their emissions in an net zero world, and that is what is the stream that will help develop some of these transport and storage infrastructure remain viable, as well as all the investments that's going into these space.
That really helped me think about the future for this industry because I know that it's increasingly complex, as we talk about in this room, but there does seem to be when I look at the net zero scenario, you see certain industries drop off at certain points in the future, assuming that things actually do follow that trajectory. And again it's a scenario, not a forecast. Those are very different things. But the number of industries that CCS is applicable to it's interesting and illuminating for me with you guys here on the show. Let's talk a little bit then about the policy makers who also see this solution. In particular, as we've established in the West, and there are two ways to go about policy intervention with technology and carbon. There's carrot and their stick. Who's doing the carrot and who's doing the stick, and what are we seeing in the policy space that's making CCS an increasingly viable carbon emissions technology.
So we talked already about many of these new growth being in the US and there's a reason for it, and it's the Inflation Reduction Act which has made the us B a leader in this.
Technology, which is definitely a carrot hundred percent.
So last year we saw the updates in the forty five Q credits which now give companies that are able to start construction of these carbon cupture facilities by twenty thirty two dollars per ton of sootwo that they store or sixty dollars per ton of sooto that they utilize, which a Sin talked about before, can be enhancing oil recovery, using in synthetic fuels and different things like that, and this can cover some of the costs that we talked about earlier, especially for high concentration sources where the carupture costs are lower than the benefit dis credits provide, so they can really make carbon cupture economically viable business case. And this also explains why sixty five percent of the new capture capacity that we see, especially in hydrogen, is in the US. Also, this kind of deadline to twenty thirty two is really pushing for projects to happen now because we talked about how long it takes for some of these projects to be implemented and how long permitting takes and all of that.
So for a project to start construction.
In less than ten years time, some of these things have to be initiated now. Other countries giving carrots Canada providing huge copex support and providing up to fifty percent of POINTERSS hypocupture project capital expendicture and again, as we talked about earlier, capital costs is the single largest cost component of these projects and the initial investment that these companies have to make is huge and for industry these ranges from around one hundred and seventy million dollars to more than a billion dollars, which makes the importance of the support obvious. And then coming back to the UK, the country has put on the site twenty billion pounds to support capocupture projects for the decapitalization of especially industrial hubs. So I think these three are the main ones in terms of carrots, So it seems that carrots is the approach to goal for most of these countries. I don't have many good examples for sticks, but will be testing to see how that costs.
My last question, which is really a burning question I've had since we've been going through this, is that if it really is this incredible use case to bring down emissions right now in the oil and gas industry, which are creating a large number of emissions, what is it going to take for this technology to be useful in other parts of the world, perhaps where there are national oil companies who don't have the same market based incentives through their share price to be looking at things like this. What would be the right environment for ccs to be all over the world.
The one thing we need to realize is CO two is a waste and capturing that CO two is going to cost more. Be it an oil and guest company or a cement factory or a steel factory, carbon capture is an additional cost, and as a result, governments would have to either provide incentives to support the deployment or on the other hand, put a very high carbon tax. So one of these two would have to happen.
As we scale this technology, costs are likely to come down some. Do you think that that will end up helping.
For most of the industrial applications? Carbon capture is a mature technology, as we discussed previously, and as a result, the amount of reduction in cost is going to also be fairly limited to some of the technologies that we've seen like solar wind or batteries. What we could see is for point source carbon capture industrial sources cost COUD forarby about forty to fifty percent over the next two to three decades. So that's not substantial. It's good, but it's not substantial. And as a result, it's going to be a cost and it's going to help, but you still need incentives to make this happen.
Okay, Well, on that note, thank you very much for walking me through the future of the application of this well established technology, which looks like it has an increasingly interesting future. Alan, Anna, thank you very much for joining today.
Thank you, Tana.
Great to be Thank you, Dana, thank you for having me.
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