As net zero targets become mainstream, government officials at national, regional and local levels need solutions for decarbonizing existing heavy industry, as well as infrastructure for new clean industries to thrive.
CCUS hubs can help industrial regions keep existing jobs and attract new ones, accelerate the adoption of low carbon hydrogen across many sectors, create the infrastructure for carbon removal technologies alongside a new carbon management service industry.
With momentum picking up in countries around the North Sea, in North America and Asia, what was once seen as an expensive, unproven technology is becoming a potentially cost-effective decarbonization option for industries that have few alternatives currently available to them. Indeed, governments are starting to compete with each other to take first-mover advantage of the opportunity CCUS hubs provide.
Developing the market and the business models are the biggest challenges facing CCUS hubs. All the technologies required in the CCUS hub value chain are functional and in use, so the main technical challenges lie in deploying these technologies at scale, in new industries and at a lower cost. This process is well underway around the world.
On the business model side, government support is currently required to tackle five main issues:
In the absence of sufficiently high carbon prices or mandates, governments are using a range of tools in different combinations to support CCUS hubs. These include subsidies, carbon price mechanisms, tax incentives, public procurement mechanisms and regulations.
Legal framework and regulations
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