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    WoodMac: Momentum slowing after H2 & Carbon Capture projects hit breakneck pace in 2021

    Feb. 2, 2022
    The CCUS project pipeline grew 7-fold, with 50 new projects worldwide. The low-carbon hydrogen pipeline doubled and green hydrogen projects represented 75% of the new projects. More than $66 billion was invested in hydrogen projects in 2021
    Rendering of proposed Oklahoma H2 production site. Image credit Woodside
    Rendering of proposed Oklahoma H2 production site. Image credit Woodside

    Global energy consultancy group Wood Mackenzie highlighted the momentum behind carbon capture, utilisation and storage (CCUS) and low-carbon hydrogen in 2021 in its latest report, "CCUS and hydrogen: 5 Things to Look for in 2022."

    In 2021, new projects were announced, favorable policies formulated and investments made as the COP26 spurred the net-zero targets of various firms. The project pipeline for CCUS and low-carbon hydrogen saw record growth in the year.

    The CCUS project pipeline grew 7-fold, with 50 new projects worldwide. The low-carbon hydrogen pipeline doubled and green hydrogen projects represented 75% of the new projects. More than $66 billion was invested in hydrogen projects in 2021.

    However, Mhairidh Evans, principal analyst, CCUS and Emerging Technologies, and co-author of the report said that the same momentum is not expected in 2022.

    Evans explained, “The coming year will be about maturing projects and securing funding. About 75% of the CCUS pipeline is in early development. For hydrogen, almost 40% of the project pipeline does not have an estimated date of operation and 25% does not have an estimated capacity. A mark of success for 2022 will be more projects in advanced development or under construction.”

    A total of 15 CCUS projects are expected to reach the FID stage this year. Hydrogen projects will require more capital flow and so the need for an increase in off-take agreements. This may bring in the $3.5 billion to $22 billion that is needed for the hydrogen projects to reach FID this year.

    Meanwhile, if the 15 CCUS projects to reach FID this year are developed successfully, they will add approximately 35 Mtpa of new CO2 capture or storage capacity. These projects will need an investment of approximately $18 billion.

    The report also stated that significant investment depends on the U.S. Build Back Better Act passing Congress.

    Technology scale-up will be needed to maintain and build momentum for these projects. Green ammonia is one of the cheapest paths to transport green hydrogen but there are challenges to it. The consultancy expects more technological solutions for storage and chemical plant design in 2022.

    While investments are made, large volumes of CCUS are not expected to come online this year. A total of 33 projects, mainly in Europe and Asia, will begin operation and 0.1 Mtpa of low carbon hydrogen and 50 ktpa of green ammonia will enter the market.

    Flor Lucia De La Cruz, senior research analyst, Hydrogen & Emerging Technologies, and co-author of the report said: “2021 was a big year for policy announcements in CCUS and low-carbon hydrogen.

    “We see 2022 as an important year for translating policy into reality, but it’s a tough political ask in some countries and we expect drawn-out negotiations to mean delays.

    About the Author

    EnergyTech Staff

    Rod Walton is senior editor for EnergyTech.com. He has spent 14 years covering the energy industry as a newspaper and trade journalist.

    Walton formerly was energy writer and business editor at the Tulsa World. Later, he spent six years covering the electricity power sector for Pennwell and Clarion Events. He joined Endeavor and EnergyTech in November 2021.

    He can be reached at [email protected]. 

    EnergyTech is focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids.

    Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.