LONDON: Skyrocketing carbon prices and a “code red” warning about the threat posed by climate change are giving fresh momentum to a technology that captures and removes greenhouse gas emissions so they can be buried.

       The market for these tools could reach US$2 trillion (RM8.47 trillion) if used to cut pollution from heavy industry, according to Credit Suisse Group AG.

       With carbon more than doubling in the past year and prices set to reach €100 (US$118 or RM500) as soon as the middle of this decade, capture technology finally is going mainstream as governments push to reach net zero.

       The cost to release carbon has never been higher in Europe and it’s poised to keep increasing, creating a tipping point where preventing the emissions becomes a viable economic alternative.

       Capture technology is used in north America and Australia, and large projects are being developed in the UK, the Netherlands and Norway.

       “Carbon pricing is driving industries to push to adopt the technology sooner,” said Samantha McCulloch, head of carbon capture usage and storage at the International Energy Agency.

       “The growing portfolio of carbon capture, utilisation and storage or CCUS projects around the world is important to refine these technologies, reduce costs and support the scale-up.”

       Carbon-capture technology has been around for decades and is used in some industries, but it’s still expensive – costing as much as US$120 (RM508.49) a tonne in cement production and power generation, according to the IEA.

       Costs depend on the location of the project and the technology used. That compares to the current cost of pollution permits of about €55 (RM274.92) a tonne.

       The process siphons off carbon dioxide from fossil fuels, compresses it, transports it and then stores it in depleted undersea oil reservoirs. The number of projects planned around the world has risen six-fold since 2019 to 300, according to Wood Mackenzie Ltd.

       Carbon prices could reach €100 (RM500) as soon as 2025, according to Bank of America Corp.

       At that level, it’s more economical long-term for some sectors using natural gas to capture their emissions rather than paying for permits to release them.

       “A carbon price of €100 (RM500) obviously changes the game,” said Simon Virley, vice- chairman and head of energy at KPMG LLP and a former UK government official responsible for carbon capture.

       Norway and the Netherlands are leading the way in Europe, with the UK in hot pursuit.

       This year, the Dutch government announced it will spend US$2.5bil (RM10.59bil) for the first large-scale carbon capture and storage project on the continent.

       Norway is investing US$1.9bil (RM8.05bil), and the UK has pledged US$1.4bil (RM5.93bil) over the next decade to create four carbon capture hubs.

       These three nations, spread around the North Sea, have a history of fossil-fuel exploration and production.

       Spending by UK oil and gas companies in the North Sea last year fell to the lowest level since 2004.

       Carbon-capture technology could be key to keeping those industries – and the sectors they supply – alive as climate targets tighten. — Bloomberg