- Cross-border CO2 shipping in Asia-Pacific is projected to reach 100 million mt/year by 2050.
- Economic support, long-term contracts, and clear regulations are essential to scale cross-border CCUS shipping initiatives.
- A ten-fold cost gap between CCUS expenses and carbon pricing in the region underscores the need for government financial support and regulatory frameworks.
The Asia-Pacific region is positioning itself as a key player in cross-border Carbon Capture, Utilization, and Sequestration (CCUS) initiatives, with CO2 shipping volumes expected to grow significantly by 2050. The vast distances between emitters and sequestration sites, coupled with economic advantages over pipeline transport, highlight the critical role of shipping in these efforts. However, overcoming financial, regulatory, and logistical challenges is crucial to unlocking the full potential of cross-border CCUS, reports SP Global.
CO2 Shipping Projections for Asia-Pacific
Shipping CO2 in the Asia-Pacific region will expand. The annual volumes are projected to reach 100 million mt/year by 2050.
Countries like Australia, Japan, South Korea, and Singapore are advancing cross-border CCUS partnerships to facilitate this growth. It leverages the economic advantage of shipping over pipelines for distances beyond 500 km.
Infrastructure Needs and Investment Requirements
The scale of shipping operations will necessitate constructing 85-150 liquefied CO2 carriers with a capacity of 50,000 mt each, alongside developing port infrastructure. Investments could total $25 billion by 2050.
Emerging routes include Northern Lights (500-1,000 km), intra-Southeast Asia (450-970 km), and Northeast Asia-Australia (6,000-11,000 km).
Economic and Regulatory Challenges
The cost of cross-border CCUS, ranging from $141-$287/ton of CO2, far exceeds domestic carbon pricing in Asia-Pacific, which is only $2-$18/ton.
To bridge this gap, governments must offer economic incentives and develop regulations for carbon accounting, verification, and permitting.
Need for Long-term Contracts
Emitters must commit to long-term contracts (10+ years) and guarantee minimum CO2 volumes. It ensures financial stability for shipping and terminal providers.
Such commitments enable stakeholders to secure funding for necessary infrastructure investments.
Collaboration is Key
Developing a robust cross-border CCUS value chain requires collaboration between public and private sectors.
Governments must address nascent regulations and provide financial support, while stakeholders work together to create standards for CO2 handling and operational frameworks.
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Source: SP Global
