Study with Boston Consulting Group Identifies 5 Key Requirements For Cross-Border Projects in the Asia Pacific region
The Asia Natural Gas & Energy Association (ANGEA) today published a groundbreaking study in partnership with the Boston Consulting Group into the key requirements for cross- border carbon capture arrangements across the Asia Pacific region.
Titled “Accelerating cross-border CCS in Asia Pacific – Recommendations for bilateral and commercial agreements”, the study provides a framework to help accelerate the development of cross-border CCS with recommendations on bilateral and commercial agreements.
The goal of the study is to facilitate a common understanding of the issues and complexities in the region that need to be addressed in providing the necessary legal and regulatory clarity for cross-border CCS projects to move forward.
“CCS has been identified by the Intergovernmental Panel on Climate Change and the International Energy Agency as a technology that is critical for global net zero aspirations,” ANGEA CEO Paul Everingham said.
“For Asia Pacific, the successful implementation of cross-border CCS will be vital because of the presence of high-emitting nations around the region which will have the capability to capture CO2 but not the geological capacity to store it.
“This means that countries in Asia Pacific are seeking to establish partnerships and value chains that allow emissions to be captured in one country and stored elsewhere in the region.
“Asia Pacific has enormous storage potential – perhaps as much as 3 gigatonnes per annum by 2050 – but the development of cross-border CCS has been restricted so far by the lack of a common understanding and alignment of the required regulatory framework and policies to guide agreements.
“Our project is designed to address this, providing an overarching set of principles to help parties navigate the requirements for cross-border CCS arrangements.
“This includes measures to avoid double-counting of emissions reductions, procedures to account for reduction reversals and adoption of best practice in the operationalisation of cross-border CCS projects.”
Boston Consulting Group’s Senior Partner and Head of Energy Practice for Asia Pacific, Asheesh Sastry, noted that the study and its recommendations would significantly advance development of cross-border CCS projects in APAC.
The study reviewed and applied international standards – including those from the IPCC, the EU CCS Directive, and the London Protocol – in the Asia Pacific context.
“CCS in Asia Pacific is entering an exciting phase with countries exploring bilateral arrangements for cross-border emissions capture and storage,” Mr Sastry said.
“Realising its full potential requires clarity on bilateral and commercial agreement issues.”
The study offers actionable guidance to accelerate cross-border CCS under international frameworks while aligning with national carbon certification policies.
“These guidelines reflect months of engagements with governments and stakeholders and are designed to be flexible, technology-neutral, and adaptable to diverse regulatory environments.
“BCG is delighted to have partnered with ANGEA and its members for this work, and we look forward to it advancing decarbonisation across Asia Pacific.”
Access more details on the project and download the full study at: https://angeassociation.com/policy-areas/cross-border-carbon-study/
For ANGEA media enquiries
Contact Simon White
simon.white@angeassociation.com
Ph: +614 38 23 08 77
Study recommendations for bilateral and commercial cross-border CCS agreements
| Topic | Five recommendations for bilateral negotiations and agreements | Six underlying assumptions to recognize in bilateral agreements |
| Emission reduction certification | • Agree on ownership rights to the emission reductions*
• Agree to share data for emission reduction certification • Agree on jurisdictional accountability for emission reversals from leakages and acceptable mechanisms for the adjustment of such reversals* |
• Capture country decides on a whitelist of approved carbon certification standards
• Projects will follow standards for carbon MRV as required by chosen accreditation methodology • Reporting of emissions and leakages to follow established international guidelines |
| Cross-border CCS operations | • Agree on regulatory jurisdiction during CO₂ transportation*
• Agree on dispute resolution mechanisms, including arbitration forums etc. |
• CO₂ transportation and stream criteria is in line with international standards
• Storage country regulations govern storage, site closure, post-closure, MMV and auditing requirements • Storage country has authority to implement financial safeguards to be compensated for the long-term CO₂ storage risks |
*Options available under these recommendations are outlined in detail in the full study document.
| Topic | Recommendations for commercial agreements |
| Emission reduction certification | |
| Emission reduction unit generation | • Project proponent has the right to use the CCS project for its chosen certification standard, and should ensure compliance with domestic carbon policies and CCS regulations |
| Rights to emission reductions | • Only project proponent can claim for projects’ emission reductions or use them to generate carbon credits or certificates |
| Cross-border emission reduction transactions | • Project proponent has the right to transfer project’s emission reduction units to other parties, and should ensure that transactions are aligned with international standards and domestic regulations |
| Carbon MRV | • Project proponent is accountable for carbon MRV process and contracting an approved third-party auditor
• Other project operators will cooperate with project proponent to support emission reduction certification |
| Permanence | • Establish necessary indemnity and risk allocation clauses for emissions accounting adjustments
• Decide on mechanism to account for emission reduction reversals caused by leakages post-CO2 injection • Where shared storage hubs are used, clarify share of storage site used – to determine share of leaked emissions to account for (if using a buffer) |
| Cross-border CCS operations | |
| CO₂ stream criteria | • Align on project-specific CO₂ stream criteria standards, and/or default to international standard
• Where shared storage hubs are used, CO₂ stream criteria should be range bound to account for potential stream varieties |
| Transportation modes and requirements | • Ensure CO₂ transportation practices comply with the latest regulations and standards, and establish necessary indemnity and risk allocation clauses |
| Storage site permitting | • Storage operator to strictly follow storage and site operation standards (e.g. pore space rights) and any additional requirements required by law and in the bilateral agreement |
| MMV & auditing requirements | • Ensure compliance with local MMV and auditing requirements
• Storage operator to provide data on CO₂ leakages or irregularities to the project proponent and the relevant regulatory authority in a timely manner |
| Site closure procedures | • Project proponent has the right to request for site closure and post-closure progress reports from the storage operator to assure the integrity of CO₂ containment |
| Liabilities | • Operators should clarify liability for CO₂ leakage at designated transfer points across the value chain |
| Dispute resolution | • Parties to establish dispute resolution process focused on addressing issues in relation to the commercial terms of the project |
