Post by
Kanatainvestor on Sep 03, 2023 3:38pm
CMG controls 75% of the CCUS simulation market in Europe
In case you are wondering why CMG keeps rallying, here is a critical data point from Canaccord Genuity roadshow note from earlier this year:
“CMG claims ~75% market share with European carbon capture and storage (CCS) projects, while hydrogen and geothermal opportunities remain more nascent.”
The potential for carbon capture and storage is immense, according to US Department of Energy (https://liftoff.energy.gov/wp-content/uploads/2023/04/20230424-Liftoff-Carbon-Management-vPUB_update.pdf), the CCUS represent $100B market opportunity by 2030 and $600B by 2050:
“Modeling studies suggest reaching U.S. energy transition goals will require capturing and storing 400 to 1,800 million tonnes (MT) of carbon dioxide (CO2) annually by 2050, through both point-source carbon capture, utilization, and storage (CCUS) and carbon dioxide removal (CDR). Today, the U.S. has over 20 million tonnes per annum (MTPA) of carbon capture capacity, 1–5% of what could be needed by 2050. This scale-up represents a massive investment opportunity of up to ~$100 billion by 2030 and $600 billion by 2050.”
McKinsey, believes that the market needs to grow 120 times for the would reach its net-zero commitments (https://www.mckinsey.com/industries/oil-and-gas/our-insights/scaling-the-ccus-industry-to-achieve-net-zero-emissions):
“CCUS uptake needs to grow 120 times by 2050 for countries to achieve their net-zero commitments, reaching at least 4.2 gigatons per annum (GTPA) of CO captured, with some estimates ranging from 6.0 to 10.0 GTPA. This could lead to CCUS decarbonizing 45 percent of remaining emissions in the industry sector. Even in conservative scenarios, CCUS demand would reach approximately two GTPA by 2050—a 60-fold increase over today’s pipeline of projects”.
CMG’s simulation software can play an essential role in enabling the storage portion of the CCUS industry, and with 75% market share in second largest carbon capture and storage market, the EU (https://www.reuters.com/business/energy/energy-firms-bet-big-carbon-capture-projects-us-canada-2023-03-10/). CMG is well positioned to dominate the simulation side of this industry worldwide.
In the meantime, as the company growth opportunity in CCUS continue to brighten, the company core addressable O&G simulation market is expected to grow from $767m today to $1B in 2030, again from Canaccord:
“The market overall is expected to grow to a $1B opportunity by 2030. Conventional and onshore subsegments of the market are expected to grow 2 – 3% annually through 2030, while unconventional areas (CMG’s current focus) are expected to grow 4 – 7% over the same timeframe.”
In my judgment a move into the double digits is not the destination, but rather is the foundation for a prolonged multi-year advance underpinned by CMG’s evolution from a niche O&G simulation player to a foundational player in the global net-zero transformation.