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Key Requirements for CCUS Market Offtake in Africa

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The African Energy Chamber (AEC), in partnership with the Oil & Gas Climate Initiative (OGCI) hosted a webinar on the role of carbon capture, storage and utilization (CCUS) technology in decarbonizing Africa’s hydrocarbons sector while analyzing challenges and opportunities within the market on Tuesday.

Commenting on the benefits associated with CCUS application, Jean Patrice Bellier, Associate Partner at Bain & Company, said “Limiting the global temperature rise in line with the Paris agreement is impossible without carbon removal, forcing countries and firms to consider CCUS. The role of CCUS is to decarbonize refineries, chemical plants, harbors, oil and gas pipelines and gas power plants whilst supporting blue hydrogen gas production.”

He added that it can result new opportunities such as employment creation in the energy transition and can also add investments in other industries including cement production.

However, despite the benefits associated with CCUS, adoption in Africa remains limited with only a handful of countries including South Africa and Egypt set to implement CCUS pilot projects by 2023,while Nigeria enters the planning stage.

For CCUS technology penetration to be fast-tracked across the entire African continent, measures including cross-border collaboration, capture and transport costs reduction and storage assessment and use case expansion will need to be put in place, according to Ian Macdonald, lead of the OGCI Workstream.

With the OGCI identifying the potential for the development of 18 CCUS hubs across six African countries, Macdonald added that the model provides an opportunity for the continent to address CCUS market barriers including the high cost associated with the solution and a lack of infrastructure.

“For these hubs to mature we need to have a country and government commitment and companies as well. If there is no regulation and supporting policies, CCUS employment will not happen in a country. Oil and gas firms need to understand the business model and how CCUS costs can be offset,” stated Macdonald.

Backing Macdonald’s notion, NJ Ayuk, Executive Chairman of the AEC, stated that “We need to start by creating champions of carbon capture. Get governments to see themselves as part of that process. Have governments buy in and become champions, you will see impacts and different turnkey solutions. Once you develop African champions, you will improve buy-in from a regulatory perspective. If you only have IOCs and international markets driving this, you won’t get buy-in.”

Rolake Akinkugbe-Filani, Chief Commercial Officer at Mixtra Africa added increasing interest in climate mitigation across the public sector, especially in Nigeria with the introduction of the Gas Flare Commercialization Project, could provide an opportunity for Africa to accelerate CCUS deployment leveraging governments’ incentives. “You need to incentivize companies to be willing to invest, so you need to get the public companies on your side. Before large scale oil and gas projects reach final investment decisions, they need to include CCUS and I see huge opportunities in this regard,” stated Filani.

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Nicholas Nhede

Nicholas Nhede

Nicholas is an energy sector journalist with a passion on how technology and diversification of the energy mix can be used to address energy sector challenges. Nicholas holds a diploma in Journalism and Communication studies and has been covering energy-related topics including the Internet of Things, distributed energy and digitalisation since 2015.