South Africa Carbon Capture and Storage Market Size, Share & Trends Analysis Report By Technology (Pre-combustion capture, Oxy-fuel combustion capture, Post-combustion capture), By Service (Capture, Transportation, Storage, Utilization), By Utilization Technology (Uptake, Catalytic conversion, Mineralization), By End-User (Power Generation, Oil and Gas, Metal Production, Others) and Forecasts, 2024-2032

South Africa Carbon Capture and Storage Market Size

The South Africa carbon capture and storage (CCS) market was valued at USD 23.10 million in 2023 and is expected to grow from USD 26.57 million in 2024 to USD 88.49 million by 2032, with a CAGR of 15.0% during the forecast period (2024–2032).

South Africa's national and international climate commitments, involvement in CCS research, and pilot projects (such as the Sasol facility) are helping pave the way for broader adoption.

Driving Factors

National and international climate commitments

South Africa's Nationally Determined Contributions (NDCs) under the Paris Agreement set ambitious targets for emissions reduction. The country has been exploring CCS as a critical technology to meet its carbon neutrality goals. South Africa's major coal-fired power plants and energy-intensive industries, such as steel and cement, are responsible for a significant share of the country’s emissions, highlighting the urgent need for CCS solutions.

Furthermore, through the Department of Mineral Resources and Energy (DMRE), the South African government has recognized CCS as a critical technology to help meet climate targets. Additionally, international partnerships, such as those with Norway and the International CCS Knowledge Centre (ICCK), foster knowledge transfer and technology deployment in the country. This creates a favorable market environment for the rapid adoption of CCS technologies.

Market Restraints

High cost of infrastructure and technology implementation

The adoption of CCS in South Africa needs to be improved because of the high upfront costs and complexity associated with CCS infrastructure. Implementing CCS technologies requires large-scale investments in capture systems, transportation pipelines, and underground storage sites. The financial constraints South Africa’s industrial sectors face, coupled with limited funding for such infrastructure, pose significant barriers.

Additionally, the country’s reliance on coal for power generation further complicates the transition, as retrofitting existing coal plants with CCS technology is expensive and technically challenging. According to the South African National Energy Development Institute (SANEDI), the high initial capital required for widespread deployment remains a key challenge despite the need for CCS.

Key Opportunity

Integration with Renewable Energy Transition

An exciting opportunity for the South African CCS market is its integration with the country’s renewable energy transition. As South Africa increases its investment in wind and solar energy to diversify its power mix, there are opportunities to use CCS technologies alongside these renewables. The country’s renewable energy resources, especially solar and wind power, can help offset industry carbon emissions while CCS works to remove and store emissions.

In addition, South Africa's clean coal technologies and blue hydrogen initiatives provide synergies with CCS to enhance the effectiveness of decarbonization. Furthermore, the country’s rich geological formations offer ideal storage sites for CO₂, including the potential for Enhanced Oil Recovery (EOR). These factors will encourage more players in the industry to invest in CCS, making it a sustainable part of the country's green energy transformation.

Regional Insights

The market is characterized by growing interest in decarbonization and the integration of CCS with both existing and future energy infrastructure. As one of Africa's largest economies, South Africa is increasingly focused on reducing emissions in line with global climate change mitigation goals and the Paris Agreement. The country has committed to achieving net-zero emissions by 2050, with CCS technologies are critical in decarbonizing its heavy industrial and energy sectors.

Johannesburg is central to the nation’s industrial activities, particularly mining and manufacturing. These industries contribute significantly to CO₂ emissions, driving demand for CCS solutions. Companies like Anglo-American and ArcelorMittal have initiated discussions on implementing CCS technologies. Johannesburg’s well-developed industrial base ensures continuous opportunities for CCS deployment, as the city is committed to decarbonizing its economy.

Cape Town is a critical player in South Africa's renewable energy sector, with a growing focus on solar and wind energy. The city is exploring the integration of CCS with renewable energy infrastructure to balance the grid and reduce emissions. As part of the country’s renewable energy strategy, Cape Town will likely see increasing investments in hybrid CCS-renewable projects, particularly in the solar-rich regions.

Durban is an important industrial city with significant port and shipping activities. It is also home to major oil refineries and chemical plants, making it an ideal location for capturing CO₂ emissions. Sasol’s operations in Durban are among the leading examples of carbon capture efforts, and as the city continues to develop its green economy, CCS adoption is expected to rise.

Pretoria is known for its research institutions, such as the Council for Scientific and Industrial Research (CSIR), which are pivotal in advancing CCS technology in South Africa. The city’s focus on clean energy innovation and its proximity to governmental decision-making make it a key player in policy and technology development for CCS, further enhancing its growth prospects.

Port Elizabeth’s industrial activities contribute heavily to carbon emissions. The city's automotive sector, including companies like Volkswagen and General Motors, is a significant source of emissions, leading to an increased interest in CCS technology for mitigating the environmental impact. The city's focus on cleaner technologies will drive the adoption of CCS services.

Segmentation Analysis

By Technolgy

Pre-combustion capture dominates the technology segment and is expected to grow at a CAGR of 14.7% over the forecast period. Pre-combustion capture is essential for South Africa's energy and industrial sectors, especially as coal remains the dominant energy source. This technology captures CO₂ before the combustion process during synthetic fuels and electricity production. As Sasol continues to explore gasification technologies in its Secunda facility, pre-combustion capture can be implemented to mitigate emissions. The increased natural gas usage and the future potential for blue hydrogen will further drive the demand for this technology.

By Services

Capture services dominate the segment and are expected to grow at a CAGR of 14.6% during the forecast period. Capture services are seeing increased demand due to South Africa’s industrial sectors like steel, cement, and petrochemicals, which produce large amounts of CO₂. Implementing CCS technologies through service providers offers industries a cost-effective option for reducing emissions without requiring extensive internal infrastructure investment. Companies like Sasol and Exxaro will likely be in charge of adopting third-party capture services to meet regulatory and sustainability goals.

By Utilization Technology

Catalytic conversion dominates the utilization technology and is expected to grow at a CAGR of 15.4% over the forecast period. Catalytic conversion is gaining traction in South Africa, as it offers a promising way to recycle captured CO₂ into valuable products like methanol and synthetic fuels. South Africa's industrial base, especially in chemicals and petrochemicals, is well-suited to benefit from this technology. By converting CO₂ into valuable products, South African companies can reduce emissions and generate economic value, making it an attractive option for industries such as Sasol and PetroSA.

By End users

Power generation dominates the end-user segment and is expected to grow at a CAGR of 15.7% during the forecast period. Power generation remains the largest end-user for CCS in South Africa. The country’s energy infrastructure relies heavily on coal-fired power plants, which emit substantial CO₂. As part of its Energy Transition Strategy, South Africa is exploring CCS to retrofit its coal plants, starting with the Kusile Power Plant and the Medupi Power Plant. These plants and other future renewable energy projects are likely to integrate CCS technologies to lower emissions and help meet the country’s climate goals.

Analyst’s Perspective

As per our analyst, the South Africa carbon capture and storage market is poised for rapid expansion in the coming years. This growth is primarily driven by South Africa’s national climate commitments and its growing industrial sector’s need to address its carbon footprint. The integration of CCS technologies into critical sectors such as power generation and petrochemicals presents significant growth opportunities. Additionally, the country’s increasing focus on renewable energy and blue hydrogen will act as complementary factors, enabling smoother transitions to lower-carbon technologies.

However, securing the necessary financial resources and overcoming technological barriers for large-scale CCS adoption remains the challenge. Despite these hurdles, South Africa’s strong industrial base and commitment to climate goals ensure the rapid development of a CCS market.