A roundtable discussion on carbon capture in Asia
There’s no doubt that carbon capture, utilisation and storage (CCUS) is one of the most interesting and talked-about topics on the world energy landscape.
Which helps explain why a recent webinar on CCUS in Asia – organised by leading industry publisher Energy Voice – attracted a global audience in the hundreds and stretched out past the 90-minute mark, with plenty more that could have been said had time allowed.
Asia Natural Gas and Energy Association CEO Paul Everingham was delighted to be part of the discussion panel alongside Darius Chen (an associate partner at McKinsey and Company in Singapore), Chris Consoli (principal consultant at the Global CCS Institute) and Mark Wilkie (carbon management director at GaffneyCline).
The following edited excerpts highlight some of the key talking points of the webinar, which you can also watch in full in the player embedded below.
Attitudes towards CCUS in Asia
Paul: “I think CCUS is very well received in Asian countries. They know that they have a big emissions footprints, which are growing. They also know that they’re geologically blessed with some ideal reservoirs for CO2 storage. Indonesia, Thailand, Malaysia, Vietnam – all of them are very open and positive about the potential for CCUS. I think when you have a big problem in front of you, all options have to be on the table. In some wealthy Western nations, there’s a discussion about wanting to be able to select from what technology is available to choose our path to net zero by 2050. In my opinion, if you approach the problem like that you won’t achieve net zero by 2050.”
Darius: “There’s a lot of potential [for CCUS in Asia] and we believe in the potential. But the pathway to get there looks very different for different companies. Fundamentally, a hub cluster play is what’s needed, partnerships across different sectors and between different companies across the value chain enabled with the right policy. And the pathway also looks very different between different countries. CCS has been done in Australia so the comfort level for a company in Australia is very different vis-à-vis a company in Indonesia, Malaysia or Thailand.”
Learnings from other jurisdictions:
Mark: “If you look at the pipeline of CCS projects, from a retail perspective Australia by far is ahead of the pack. And I think that is largely down to their position on regulation and legal framework for CO2 storage. In order for hubs to be developed, it really needs that regulatory framework, but it also clearly needs today some financial support from the state or from governments. Where we are seeing hubs and clusters being developed, those are largely being backed at the moment through state funding. I think Australia, and certainly Western Australia, has taken quite a lead in terms of developing CCS and also considering the opportunities for hubs and clusters to decarbonise domestic emissions.”
Chris: “The underdog in all, this is Europe. And the reason why [ I say] Europe, which initially was hesitant for CCS, is because of the rise of CCS networks. What countries are seeing with CCS networks is a way to decarbonise their emissions, and then be able to transport it and store at a lower cost. And that’s not just at a country level, that’s at an industrial level. With networks, it reduces the overall cost due to increased volume and economies of scale. But importantly it also reduces operational risks. So a utilities company doesn’t have to worry about moving fluids into the subsurface because that’s not their remit and it would increase their operational risk.”
What an Asian CCUS hub might look like
Paul: “That hub and spoke model is something that our organisation would strongly support. We think an Asia Pacific transnational carbon hub is something that would make a lot of sense. Producers, like the United States and Australia would send molecules into the Asia Pacific to their users, typically North, South and Southeast Asia. The users might want to be paid to store the CO2, or the producers might want to store the CO2 if it was returned to them. Australia and parts of Southeast Asia like Indonesia and like Malaysia have good geological formations [for storage]. Australia, and particularly Western Australia, has a good legislative and regulatory regime. CCUS unfortunately hasn’t taken off in Australia the way it was expected after the Gorgon LNG project. Interest and demand is much stronger in Asia for CCUS than it is now in Australia.”
Guiding collaboration on CCUS
Darius: “The role of a lead orchestrator is immensely important [to developing CCUS hubs]. Because you try to bring in the entire value chain, you’re trying to represent multiple parties from different industry groups, trying to stitch up commercial arrangements across the value chain and to test different technologies. It is more than what different customers and companies can do, you need a lead orchestrator to drive all that…to go forward to the government and say ‘this is the plan, this is the vision, we need your support.’ We’ve seen that multiple times in different clusters around the world.”
Talking the U part of CCUS
Chris: “From the Institute’s point of view…any molecule of CO2 that you take out of the atmosphere or that would have been released, as long as it’s person permanently stored, then, you know, it’s part of the program. I think around adding it to cement, or mineral carbonation or using it as an offset fuel, we will see growth in that utilisation area. [But] I think the importance needs to be about its permanency. It needs to be part of the solution, not just – as the saying goes – to kick the bucket down the road. Some of the ambitious programs that we’ve seen are producing bicarbonate soda [from captured carbon]. But with some of the facilities that that are producing emissions, it you put that utilisation on those projects, you’re going to have literally mountains and mountains of bicarbonate soda pouring out of your facility, because some of them are 10 or 20 or 30 million tonnes per annum. That’s a lot of bicarbonate soda to be produced in the process!”
Building the fundamentals of a CCUS ecosystem
Mark: “It’s going to be crucial that CCS is implemented in order to be able to decarbonise products that are being exported worldwide. There are promising signs and there is development underway, but it’s largely within countries with the policy and regulatory framework [already] there. Fundamentals are going to be needed [elsewhere], if this is to move forward. Policy and regulatory framework is a key key foundation block but it’s going to be critical also to be able to manage risk and liability and to encourage investments from both industry and also from the commercial debt market. I think ultimately, the vision should be that CCS becomes a utility – it should be safe, it should be cheap and it should be readily accessible. But to do that, at least in the short term, there is going to need to be a price placed on CO2 in order to justify that investment in the first piece of infrastructure to deliver that vision, that utility.”
A final word looking ahead
Paul: “I live in Asia, I work in Asia…we can’t deny Asia its industrial revolution, where people will be lifted out of poverty or lower living standards into much stronger standards of living. And that will mean that Asia needs large amounts of energy for the next 50 years. I think there is momentum behind CCUS. There are very strong pivots from governments, including in the United States, that are now starting to realise that more gas molecules will be required for quite a long time. And I think potentially, public financing institutions will hopefully look to play a role in decarbonisation, especially in Asia. Without CCUS in Asia, there is zero chance the region will meet its emissions targets. And I’m not just talking about 2050. India has a 2070 target. If there’s not a transition to gas, including carbon capture and storage, the idea that India will meet its targets even in 2070 is not statistically possible.”
ANGEA is an industry association representing LNG and natural gas producers, energy buyers, suppliers and companies in APAC. Based in Singapore, it works in partnership with governments and societies across the region to deliver reliable and secure energy solutions that achieve national economic, energy security, social and environmental objectives and meet global climate goals.