Energy News Beat
Eni is selling nearly half of its carbon capture business, which prompts me to pause and examine the overall market first. We have seen the failure of Shell and BP’s run at the green energy markets, and is Eni getting back to being an oil company? We will be watching.
Global Carbon Capture Market
The global carbon capture, utilization, and storage (CCUS) market is experiencing significant growth, driven by increasing demand for decarbonization solutions to meet net-zero emission goals. Here are key insights into the market:
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Market Size and Growth: The CCUS market was valued at approximately USD 4.91 billion in 2024 and is projected to reach USD 15.98 billion by 2032, growing at a compound annual growth rate (CAGR) of 15.91%. Some estimates suggest the market could reach USD 20.62 billion by 2035, with a CAGR of 13.5% from 2025 to 2035, driven by rising CO2 emissions and supportive government policies.
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Key Drivers:
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Regulatory Support: Policies like the EU Emissions Trading System (ETS) and U.S. tax credits (e.g., 45Q) incentivize CCUS adoption by providing financial benefits for capturing and storing CO2.
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Corporate Net-Zero Commitments: Companies across industries, particularly in hard-to-abate sectors like cement, steel, and chemicals, are investing in CCUS to meet sustainability goals.
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Technological Advancements: Innovations in direct air capture (DAC) and carbon utilization (e.g., converting CO2 into fuels or materials) are expanding the market’s potential.
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Energy Transition: CCUS is critical for decarbonizing fossil fuel-based power generation and industrial processes, with applications in blue hydrogen production and enhanced oil recovery (EOR).
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Market Segments:
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Capture Technology: Dominates the market, accounting for over 70% of revenue in 2024, with pre-combustion capture being the largest segment due to its efficiency in power generation and industrial applications.
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End-Use: The oil and gas sector leads due to EOR applications, but power generation and industrial sectors (e.g., cement, steel) are growing rapidly.
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Service: Storage is a key growth area, with projects like Equinor’s Northern Lights in Norway and Bayou Bend in the U.S. highlighting scalable CO2 sequestration solutions.
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Regional Insights:
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North America: Holds the largest market share (over 40% in 2024), driven by U.S. investments in CCUS infrastructure and tax incentives.
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Europe: A leader in policy-driven CCUS adoption, with projects like Eni’s Ravenna and the UK’s HyNet and Bacton clusters. The EU ETS supports market growth.
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Asia-Pacific: Expected to see the fastest growth due to increasing industrial emissions and government initiatives in countries like China and Australia.
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Challenges:
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High capital costs for CCUS infrastructure.
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Public perception and regulatory hurdles around CO2 storage safety.
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Competition from renewable energy and nature-based solutions like afforestation.
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Carbon Credit Value
Carbon credits, which represent one metric ton of CO2 reduced, avoided, or removed, are traded in both compliance and voluntary markets. Their value is influenced by market dynamics, project quality, and regulatory frameworks.
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Market Size and Growth:
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The global carbon credit market was valued at USD 114.8 billion in 2024 and is projected to reach USD 474.2 billion by 2034, with a CAGR of 15.8%.
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The voluntary carbon market is expected to grow 15–100x by 2030, driven by corporate demand for high-quality credits.
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Credit Prices:
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Compliance Markets:
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EU ETS: Carbon allowances traded at approximately €70–€100 per ton in 2024, with prices expected to rise due to tighter caps and increased demand.
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California Carbon Allowances (CCA): Prices ranged from $30–$40 per ton in 2024, influenced by state-level cap-and-trade policies.
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Voluntary Markets:
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Prices vary widely based on project type, quality, and co-benefits (e.g., community development, biodiversity). High-quality credits from CCUS or DAC projects can fetch $100–$300 per ton, while nature-based credits (e.g., forestry) may range from $5–$50 per ton.
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Direct air capture credits, like those from Occidental’s STRATOS project, are among the most expensive, often exceeding $500 per ton due to high costs and scalability challenges.
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Key Trends:
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Quality and Transparency: Demand is shifting toward credits with verified additionality, permanence, and co-benefits. Technologies like AI and blockchain are improving traceability and trust in carbon markets.
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Integration with Other Markets: Carbon credits are increasingly linked with renewable energy certificates and biodiversity credits, creating cross-market sustainability solutions.
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Corporate Demand: Companies like Amazon, Microsoft, and TD Bank are purchasing large volumes of carbon removal credits, particularly from CCUS and DAC projects, to meet net-zero targets.
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Challenges:
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Price volatility in voluntary markets due to inconsistent standards.
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Concerns over environmental integrity, such as double-counting or non-permanent sequestration.
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Regulatory uncertainty, particularly in the U.S., where federal climate policies may face challenges in 2025.
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BlackRock’s Global Infrastructure Partners (GIP) Purchase of a Portion of Eni’s Carbon Capture Business
Overview: On May 27, 2025, Eni, an Italian energy major, entered exclusive negotiations with BlackRock’s Global Infrastructure Partners (GIP) to sell a 49.99% co-controlling stake in its carbon capture, utilization, and storage (CCUS) subsidiary, Eni CCUS Holding. This deal aligns with Eni’s “satellite model” strategy, which involves spinning off low-carbon businesses to attract external capital while retaining flexibility in its core oil and gas operations.
Details of Eni CCUS Holding:
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Projects:
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HyNet and Bacton (UK): Each targets capturing and storing up to 10 million tons of CO2 annually by 2030.
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L10 (Netherlands): Aims to capture and store 5 million tons of CO2 per year.
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Ravenna (Italy): A joint venture with Snam, with future acquisition rights, projected to store 4 million tons of CO2 annually by 2030.
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Scope: Eni CCUS Holding operates several large-scale CCUS projects across Europe and has the potential to expand into additional ventures, creating a broad platform for carbon management.
GIP’s Role:
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Stake Acquisition: GIP will acquire a 49.99% stake, gaining co-control of Eni CCUS Holding.
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Investment Support: Beyond the acquisition, GIP will fund the development of CCUS projects, leveraging its expertise in infrastructure investments.
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Strategic Fit: The deal expands GIP’s green infrastructure portfolio, aligning with BlackRock’s broader focus on decarbonization and energy transition. BlackRock acquired GIP in September 2024 for $12.5 billion, citing the growing infrastructure market and opportunities in decarbonization.
Market and Strategic Implications:
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For Eni:
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The sale supports Eni’s strategy to fund growth in low-carbon businesses without straining its balance sheet, preserving cash flow for oil and gas investments and shareholder returns.
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It validates the value of Eni’s CCUS portfolio, which attracted interest from multiple suitors.
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For BlackRock/GIP:
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The investment positions GIP as a major player in the CCUS market, capitalizing on the projected growth of carbon capture and carbon credit markets.
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It aligns with BlackRock’s commitment to energy transition, as seen in prior investments like the $550 million partnership with Occidental for the STRATOS DAC facility.
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Market Sentiment:
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Posts on X reflect positive sentiment, with users noting the deal as a testament to the quality of Eni’s CCUS projects and the growing investor interest in carbon capture.
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The deal underscores the commercial viability of CCUS, despite criticisms that it may prolong fossil fuel use.
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Carbon Credit Relevance:
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Eni’s CCUS projects could generate high-value carbon credits, particularly in compliance markets like the EU ETS, where credits trade at €70–€100 per ton. The Ravenna project, for example, could produce credits equivalent to 4 million tons of CO2 annually, potentially generating €280–€400 million in revenue at current prices.
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GIP’s investment may enhance project scalability, increasing the supply of high-quality credits and supporting price stability in voluntary markets, where CCUS credits are prized for their permanence and additionality.
Critical Perspective:
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Establishment Narrative: The deal is framed as a win-win for decarbonization and investor returns, with CCUS positioned as a critical technology for net-zero goals. However, the reliance on CCUS could delay the phase-out of fossil fuels, as critics argue it enables continued emissions under the guise of mitigation.
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Skeptical View: BlackRock’s involvement may prioritize financial returns over environmental impact, given its history as a major hydrocarbon investor. The high costs of CCUS and DAC technologies could also limit scalability without sustained government subsidies, potentially inflating carbon credit prices and burdening consumers.
Conclusion
The global carbon capture market is poised for robust growth, driven by regulatory support, corporate demand, and technological advancements. Carbon credit values are rising, particularly for high-quality CCUS and DAC credits, with compliance markets like the EU ETS setting a strong price floor. BlackRock’s GIP acquisition of a 49.99% stake in Eni’s CCUS business is a strategic move to capitalize on this growth, enhancing GIP’s green infrastructure portfolio and supporting Eni’s low-carbon expansion. While the deal signals strong market confidence in CCUS, it also raises questions about the long-term role of fossil fuel companies in the energy transition and the affordability of carbon capture solutions.
Update: from Splash 24/7
Italian giant Eni has signed an agreement to enter into a period of exclusivity with BlackRock’s Global Infrastructure Partners (GIP) regarding the sale of a 49.99% stake in its carbon capture business.
During the exclusivity period, GIP will progress the confirmatory due diligence phase and complete the drafting of the documents related to the acquisition of the co-control stake in Eni CCUS Holding.
Eni CCUS Holding operates the Hynet and Bacton projects in the UK, L10 in the Netherlands, and has the future right to acquire the Ravenna project in Italy.
According to Eni, additional prospects could be added in the medium-to-long term to build a wide platform of CCUS projects.
The final agreement, which is currently under negotiation, GIP will support investments in the CCUS projects apart from just the initial acquisition of the stake in Eni CCUS Holding.
The agreement comes after a thorough selection process involving “several prominent international players who expressed strong interest in the company”.
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