Challenges

Main Obstacles

High Initial Costs

Economics of Carbon Pricing

Policy Support and Incentives

Private Sector Investment

Project Financing

Carbon Offsetting and Carbon Markets

Economic Challenges

High investment cost
High operation and maintenance cost
Low rate of return on investments

Technical Challenges

High energy consumption
Limited carbon dioxide conversion efficiency
Insufficient geological information

Political Challenges

Inadequate legal and regulatory framework
Lack of standards and regulations
Insufficient incentive policies

Social Challenges

Lack of public support
Low investment enthusiasm of enterprise
Inadequate infrastructure

Wood Mackenzie report by Evans, M.(2021) suggests average standalone CCUS project cost in 2021 (US$125/tonne) will be reduced to (US$98/tonne) by 2050.

Similarly, average Hub projects cost will reduce from US$100/tonne to US$80/tonne by 2050 making CCUS implementation more cost effective in future.

Infrastructure Which Is Developing (Solution?)

CO2 transport and storage are expected to benefit from technology innovation and digitalisation that are currently revolutionising the oil and gas industry. The largest cost reductions are likely to come from advanced sensing and real-time monitoring technologies that allow for reduced downtime and early detection of CO2 migration or leakage, due to improved tracking and predictive maintenance (IEA, 2017).

Drones, robotics and automated systems will be particularly important as they can significantly reduce the need for labour, for example on offshore storage platforms. Smart drilling and developments in seismic analysis could also accelerate site appraisals and reduce costs. The potential for cost reductions through innovation is greater for CO2 storage for which the costs of new projects are projected to fall by around 20-25% by 2040, (IEAGHG, 2020a).

China's 7 Challenges

Lack of standards and regulations
Inadequate legal and regulatory framework
Insufficient incentive policies
Limited carbon dioxide conversion efficiency
High energy consumption
Low rate of return on investments
Low investment enthusiasm of enterprise

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