Unlocking Carbon Capture and Storage in Asia Pacific

by User Not Found Nov 20, 2023, 15:20 PM

While carbon capture and storage is seeing progress, a cross-border value chain could be the key to wider deployment. Alika Koh reports.

Carbon capture and storage (CCS), the vital technology for capturing carbon emissions, has gained considerable momentum in recent times. Over 200 new capture facilities are expected to be operational by 2030.

Despite this growth, the current pace of global CCS projects accounts for only about 30 percent of what is needed to align with the International Energy Agency (IEA)'s Net Zero 2050 scenario. To meet climate mitigation targets, IEA projects that approximately 2,000 large-scale CCS projects are required. "Clearly, there's a lot more work to do," said Justin Oettmeier, Vice President of Technical Development, Asia Pacific, ExxonMobil Low Carbon Solutions. He was speaking at the SIEW TechTable on 25 October, on the topic of Carbon Capture and Storage (CCS): Key Enablers to Deploying CCS in Asia Pacific.

Recognised by the United Nations Intergovernmental Panel on Climate Change (IPCC) and the IEA, CCS is deemed a pivotal low carbon technology for achieving net zero goals at the lowest absolute cost. Its applications will be most pertinent for hard-to-abate sectors, such as industrial power generation and transportation.

Navigating unique regional dynamics

The Asia Pacific holds a unique position in the CCS landscape, compared with other parts of the world, due to its market dynamics. The region accounts for just over half of the world's carbon emissions across multiple countries, which are in varying stages of climate change mitigation.

More advanced economies in these regions have more aggressive decarbonisation plans. Paradoxically, these same countries frequently have limited access to low carbon energy sources due to constraints in storage capacity.

Then there are the developing countries within the region which boast significant potential for large-scale carbon storage. These countries could potentially export low carbon energy products but struggle to secure the capital needed for expensive abatement technologies like CCS.

Given this regional mix of "storage countries" and "customer countries", Mr Oettmeier recognised the potential for a unique opportunity to match supply with demand through the creation of "a cross-border value chain".

Barriers yet to overcome

This envisioned cross-border value chain is not without its challenges. As Mr Oettmeier pointed out:

  • Customer countries: Transporting and storing CO2 over long distances can be costly, making government incentives crucial in the near term before carbon markets become fully established.
  • Storage countries: These countries need to establish regulatory frameworks to enable CO2 sequestration and storage, access pore space which is typically owned or controlled by governments, manage long-term liability over the project's lifespan, create efficient processes for licensing, and gain public acceptance to receive third-party CO2.

Beyond these challenges, the regulations that facilitate cross-border transportation of CO2, including measurement and verification standards and accounting mechanisms for countries to register the carbon offsets, need to be carefully considered.

Key enablers for CCS in Asia Pacific

Mr Oettmeier shared that enabling CCS in Asia Pacific hinges on three key levers:

  1. Sourcing regions with higher concentrations of CO2 emissions: Focusing on areas with high CO2 emissions concentration can reduce initial development costs, as capture costs are commensurate with emissions density.
  2. Hub-type approach: Economies of scale can be captured by installing CCS services in collaboration with a consortium of companies to collectively meet carbon capture targets.
  3. Optimising transport and storage solutions: This can be through leveraging existing infrastructure such as natural gas pipelines, deploying lower-pressure shipping technologies for CO2 transport over longer distances, and integrating floating storage and injection units.

As Mr Oettmeier summed up, CCS is an indispensable component of the energy transition, particularly for economies heavily reliant on fossil fuels and for hard-to-abate sectors like industry and transportation. While there is growing momentum in the CCS sector, more effort is required to align with IEA’s Net Zero trajectory.

In looking at Asia Pacific, the region offers a unique market dynamic, with some countries facing storage limitations and others having substantial storage potential. Cross-border collaboration and government partnerships are vital to create a seamless cross-border value chain for CCS, bridging the gap between storage-rich and storage-limited nations.