Low-Carbon Fuels (LCFs) and Carbon Capture, Utilization, and Storage (CCUS) technologies are critical to achieving Net Zero Emissions (NZE). These decarbonization solutions are expected to see significantly wider adoption throughout the decade as government policies mandate sustainability goals and organizations aim to promote a positive brand image in customers' eyes.
Industrial firms face fierce scrutiny, as they are the source of enormous Carbon Dioxide (CO2) emissions. ABI Research’s Low-Carbon Fuels and Carbon Capture Technologies Market Data Overview: 3Q 2024 presentation uses current and future forecasts to identify some of the most striking trends in the industrial decarbonization market. Here are 8 of those trends to be aware of.
1. Europe Leads the Charge in LCF Adoption
Europe is expected to dominate the LCF market during the forecast period thanks to its strong position in the global hydrogen market. The market value in Europe is projected to increase from US$29.24 billion in 2024 to US$44.28 billion by 2030, growing at a 7.2% Compound Annual Growth Rate (CAGR).
Although Europe will continue to dominate the LCF market, Asia-Pacific will grow at the fastest CAGR (12.4%).
Related Blog: Key Strategies to Include in Your Industrial Decarbonization Plan
2. The Chemicals Sector Will Generate the Most LCF Revenue
Although the refining industry will remain a key player in low-carbon fuels, its market share will slowly decline as LCF technologies expand into other sectors. In 2029, the chemicals sector will overtake refineries as the LCF market leader. By that time, the chemicals sector will generate US$35.11 billion in LCF revenue, followed by refining (US$33.41 billion), transport (US$17.55 billion), and power (US$16.42 billion).
3. Hydrogen Accounts for More Than Half of All Fuel Types Used for LCF
Hydrogen is poised to lead the LCF market by fuel type, with its value expected to soar from US$40.01 billion in 2024 to US$67.64 billion by 2030. This market growth is driven by hydrogen’s increasing cost competitiveness and new applications in industries like iron and steel. Hydrogen accounts for 52% of the LCF market today, increasing to 55% by 2030.
Despite these advances, green hydrogen will still represent a small share of the total hydrogen mix, growing from just 1% in 2023 to 8% by 2030.
4. Momentum for CCUS Will Pick Up Mid Decade
CCUS technology is still in its early stages, and while growth is expected to remain modest through the first half of the forecast period, it will pick up around 2026/2027 as more projects come online. The current adoption of CCUS is limited due to the high costs of equipment and energy, coupled with long project lead times, which average around 6 years. To meet the 2030 targets outlined in the NZE Scenario, governments must introduce subsidies and reduce these lead times.
5. North America Dominates the CCUS Market, with Europe Rapidly Catching Up
North America is set to continue its CCUS market dominance through the forecast period. The market is projected to grow from US$2.47 billion in 2024 to US$3.30 billion by 2030 at a CAGR of 4.9%. The region is leading in large-scale CCUS projects, particularly in oil & gas facilities.
While North America accounts for 50.5% of total CCUS revenue in 2024, that number will slightly decrease to 41% by 2030. This market share shrinkage will largely be attributed to Europe’s robust 35.2% CAGR throughout the forecast. This will bring the European CCUS market to a US$2.1 billion valuation by the decade’s end.
6. Integrated CCUS Projects Are the Future
Although carbon capture-only projects will hold the largest share of the CCUS market from 2023 to 2030, their market size is expected to decline after 2026. The focus will likely shift toward more comprehensive CCUS projects integrating capture, utilization, transport, storage, or full-chain solutions. Full-chain projects will double annual CCUS revenue from US$880,000 in 2024 to US$1.77 billion by 2030.
7. Oil & Gas Industry Drives CCUS Investment Today, but Its Market Share Will Dwindle
Carbon capture in the oil & gas industry is a key market driver for CCUS technology as most global CO2 extraction projects are based in natural gas processing plants. However, the oil & gas industry’s CCUS market share will fall from 62% today to 42% by 2030.
While the oil & gas sector will experience a modest 1.1% CAGR throughout the forecast, other sectors such as hydrogen/ammonia and power/heat will experience double-digit growth rates (14.5% and 13.9%, respectively).
8. CO2 Emissions Captured Annually Will Increase by 14X
By 2030, industrial organizations will increase the amount of CO2 emissions captured annually 14-fold compared to 2023. This translates into 875.16 million tons of emissions captured in 2030, compared to just 63 million tons in 2023.
Natural gas processors capture the most Greenhouse Gases (GHGs) (367.57 million tons by 2030). Given the industry’s enormous carbon footprint, these firms are most pressured to employ sustainable practices. The natural gas processing industry is followed by hydrogen/ammonia (175 million tons), and power/heat in a distant third (78.76 million tons).
Learn More
ABI Research recently published its Low-Carbon Fuels for Industrial Applications presentation, which provides a data-driven overview of the decarbonization market. Download the research today to identify more decarbonization trends and assess the revenue opportunities of LCF and CCUS technologies.
