Global Trends and Drivers of the Invention of Carbon Capture, Utilization and Storage Technology

The role of carbon capture, utilization and storage (CCUS) technology in achieving global and national climate targets hinges on a timely deployment of the technology in the most demanding sectors and regions. Innovation serves to drive down the cost of different technologies and improve the technological maturity for a successful deployment. Despite the current disparity between the demanding sectors and regions of the technology and their abatement cost, there is limited knowledge in the global trend and drivers of the innovation of CCUS technology across different application sectors. By refining global CCUS patent data into 6 technological categories and 11 application sectors using machine learning algorithm (random forest classification model), this paper aims to 1) Quantitively investigate a 30-year evolution of the invention and diffusion landscape of CCUS technologies, and 2) Employ a difference-in-difference model to examine the effect of carbon pricing on CCUS invention. We find a closing gap in the sectoral and regional disparity of CCUS technologies, characterized by a shift towards sector-specific technologies and a growth of invention in emerging markets. Global cooperation of CCUS innovation is highly concentrated within the leading countries, especially for nascent technologies. The sectoral and regional disparity is mainly bridged through diffusion from experienced and leading innovation countries to large emitters with high path dependency on fossil fuel. There exists a positive and significant effect of carbon pricing and path dependence on fossil fuel on CCUS invention, particularly for sectors that take CCUS as an abatement technology. However, the iron and steel sector remain far from demand-pull incentives, and may require further efforts in public R&D and financial incentives to direct resources towards technological innovation.