Navigating the economic realities of the energy transition is not new to 2024, but several major project announcements from recent years that would have been milestone first-of-a-kind facilities and industry benchmarks faced palpable deployment setbacks. However, the setbacks of the year were driven less by technology limitations and should not be attributed to specific companies but were rather systemic challenges across the value chain — an overburdened grid and a lack of demand at existing project costs. With 2024 coming to an end, the energy teams and our other peers at Lux have spent some time reflecting on the key events of 2024 and looking ahead to what innovation teams should be expecting and prioritizing in 2025.
With predictions for 2025 finalized, the Lux team shares a few of its favorites from each of the Lux Client Priorities for Oil and Gas Innovation Leaders.
- More integrated carbon capture and sequestration (CCS) solution providers come to market, either through M&A or project development business models. CO2 capture, transportation, and sequestration need to become a more integrated and packaged solution to boost industry adoption. Corporates are already moving to make this a reality, but next year will see an uptick in companies acquiring resources in carbon management, either through acquisition or by operating projects with external IP.
- The hype in geologic hydrogen will grow with further investments in startups. The potential of vast underground reserves of cheap, readily available, low-carbon hydrogen will remain alluring to investors that will sink significant amounts into the space; returns, however, are not guaranteed, as the technology remains unproven.
- Multiple projects for ethanol to jet will be announced next year. Ethanol is a readily available feedstock that will see its market dwindle in the road transportation sector. With multiple technology licensors bringing their ethanol-to-jet technology to the market, we expect project announcements in the U.S. next year once Inflation Reduction Act credits are finalized.
- Despite overhyped announcements, in 2025, more than 10 humanoid robotics deployments will be restricted to small-scale pilot tests and R&D production environments. Humanoid robotics will remain limited to small pilots as their novelty outweighs commercial value. More companies will express initial interest but hesitate on technological adoption.
- Bionaphtha supply will be limited due to feedstock constraints. Limitations in waste oil supply will delay upcoming renewable diesel capacity scale-up, resulting in limited availability of bionaphtha. This development will underscore industry developments in exploring alternative pathways to bionaphtha via thermochemical processes, such as pyrolysis and hydrothermal liquefaction.
- The EU will provide more guidance on cross-border CCS. With projects like Porthos now operational, the EU will have to ensure that its CCS hubs are better positioned to receive CO2 from a wider range of emitters and regions. This has been a constant message in recent industry conferences, and while a formally approved guideline will be beyond 2025, we expect the EU to set blueprints in place to build its carbon economy.
In 2025, we expect this trend to continue. O&G companies will still innovate, but we expect them to be less aggressive on low-carbon investments in hydrogen, sustainable aviation fuel, and renewables while prioritizing investments in fossil resources with a renewed focus on CCS and utilization and carbon offsets. O&G companies should not, however, dismiss options that are currently too expensive, as there is always potential for breakthroughs.
Join the Lux team on January 30 for our webinar “Tech Innovation in 2025: Themes and Technologies to Monitor” as we examine the trends and developments across Lux’s industry verticals to highlight themes and insights that will inform your priorities and hone your decision-making in 2025.