IEA (2021), Carbon capture, utilisation and storage: the opportunity in Southeast Asia, IEA, Paris https://www.iea.org/reports/carbon-capture-utilisation-and-storage-the-opportunity-in-southeast-asia, License: CC BY 4.0
Carbon capture, utilisation and storage (CCUS) can help to put the fast-growing economies of Southeast Asia on the path to net-zero emissions. Since 2000, almost 90% of Southeast Asia’s energy demand growth has been met by fossil fuels and the region is home to major coal and liquefied natural gas (LNG) exporters. While the opportunity for CCUS goes beyond fossil fuel applications, the technology can be an important pillar for helping the region transition from its current energy mix to one that is aligned with future climate goals.
CCUS can contribute to emissions reductions in many parts of the region’s energy systems. The deployment of CCUS can enable some of the more recently built power plants and industrial facilities in Southeast Asia to continue to operate with substantially reduced emissions, contributing to economic development and energy security objectives. CCUS is one of the few scalable solutions available for decarbonising heavy industries like cement and steel, and its deployment could also unlock new economic opportunities associated with low-carbon hydrogen or ammonia production. CCUS can also play a critical role in reducing emissions along the supply chain for natural gas.
Meeting climate goals will require countries to accelerate the deployment of CCUS technology. In pathways consistent with the Paris Agreement’s temperature goals, CCUS would build from a limited base in the region today to 200 million tonnes (Mt) or more of CO2 capture by 2050. Investment in carbon capture technologies in Southeast Asia would need to reach an average of almost USD 1 billion per year between 2025 and 2030.
Momentum for CCUS is growing in the region. Interest in CCUS in Southeast Asia has been growing in line with international trends. Worldwide, plans for more than 30 commercial CCUS facilities were announced in the first half of 2021 alone. In Southeast Asia, at least seven potential projects have been identified and are in early development – in Indonesia, Malaysia, Singapore and Timor‑Leste. Singapore has identified an important role for CCUS in its long-term emissions-reduction strategy and is actively pursuing research and international partnerships, including with Australia. The establishment of the Asia CCUS Network in June 2021, with the objective of facilitating collaboration and the deployment of CCUS, is another significant milestone and opportunity to advance CCUS in the region.
Targeting industrial clusters will support economies of scale and kick-start deployment CCUS in the region. A hub approach can enable CO2 capture from multiple industrial and power facilities and promote greater efficiencies in the planning and construction of capital-intensive transport and storage infrastructure. Separating capture from the transport and storage elements of the CCUS supply chain can also facilitate dedicated business models for transport and storage, recognising that the specific skills and expertise needed for large-scale carbon management may not be available in most emissions-intensive sectors. Globally, plans to develop CCUS hubs are progressing in more than 12 locations, with potential to capture more than 50 Mt CO2 per year. In Southeast Asia, some of the largest industrial clusters can be found in Indonesia, Malaysia, Thailand and Viet Nam.
Regional approaches to CO2 transport and storage infrastructure can build on international experience. Regional approaches to CO2 transport and storage infrastructure could enable faster and more widespread uptake of CCUS in Southeast Asia. In particular, the development of large, shared CO2 storage resources that can be accessed by multiple facilities and countries could support CCUS investment in locations where storage capacity is either limited or where its development faces delays. Such an approach could incorporate offshore CO2 storage together with CO2 shipping, providing additional flexibility and contingency in the CCUS value chain where several storage facilities are available. Efforts to develop shared infrastructure in Southeast Asia could be informed by international experience. For example, the Northern Lights CO2 transport and storage project in Norway will accept CO2 from facilities across Europe and has sparked plans for several new CCUS projects.