Defossilizing Industry Scaling-up CCU 2025

Policy barriers Policy frameworks for CCU are emerging globally, but are currently fragmented, volatile and favour sequestration over reuse . Scaling-up CCU depends on enabling policy and regulatory frameworks. Most emerging CCU pathways cannot currently compete on price with conventional production approaches without incentives and support. Additionally, the first-of-a-kind nature of many of the technologies presents a fundamental challenge to financing, due to the unfamiliarity of financiers with these new approaches. This creates a chicken and egg dynamic in which perceptions of technological risk, upfront cost and immature end-markets for CCU products prevent investment in the demonstration and scaling-up that could start to mitigate these barriers. If governments wish to deploy CCU, regulatory support will be required to enable first movers to bear early risks and establish self- sustaining markets. However, the global CCU policy environment today is fragmented, inconsistent and often conflicting. Sequestration is favoured over reuse, though the absence of an effective global carbon price broadly undermines deployment of capture. This has introduced uncertainty among innovators and a perceived lack of policy credibility among investors. Existing frameworks are also regionally specific, leading to concentrations of CCU initiatives in certain jurisdictions. This has the potential to limit the global scale-up of CCU technologies, as well as increasing the impact of any policy instability. If governments wish to deploy CCU, regulatory support will be required to enable first movers to bear early risks and establish self- sustaining markets.2 Defossilizing Industry: Considerations for Scaling-up Carbon Capture and Utilization Pathways 13