A collaborative study by the Global Centre for Maritime Decarbonisation (GCMD) and Boston Consulting Group (BCG) has highlighted the pivotal role of shipping in facilitating Carbon Capture, Utilization, and Storage (CCUS) initiatives within the Asia Pacific (APAC) region, particularly in situations where significant geographical disparities exist between potential CO2 capture sources and sequestration hubs.
The 77-page report emphasizes the unique significance of CO2 shipping within the APAC region, characterized by vast oceans and seas separating emitters and sequestration sites, compared to the more geographically concentrated CCUS landscape of Europe.
Recognizing this, several APAC governments, including Australia, Indonesia, Japan, Malaysia, Singapore, and South Korea, are actively pursuing cross-border partnerships and initiatives to support the seamless transportation and sequestration of captured CO2.
The study projected that approximately 100 million tons of CO2 captured through carbon capture technologies are expected to be transported across national borders within the APAC region by 2050.
The creation of a market of this scale necessitates concerted efforts from both the public and private sectors, including the implementation of economic incentives, the establishment of long-term contracts for midstream players, and the provision of greater clarity on key standards.
The study revealed that shipping becomes economically advantageous over pipeline transport for the same volume of CO2 at longer distances, with a threshold distance of 310 miles (500 km) identified as economically viable for transporting 5 million tons of CO2 per year via shipping.
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A significant disparity exists between the levelized costs of cross-border CCUS and current domestic carbon pricing mechanisms within the APAC region. Current carbon taxes and emissions trading system prices range from $2 to $18 per ton of CO2, representing approximately a 10-fold gap compared to the range of levelized CCUS costs in this region.
Professor Lynn Loo, CEO of GCMD, stated: “Our study shows that APAC has the potential to lead in CO2 shipping.”
“In APAC, emitters and sinks are often separated by large bodies of water over vast distances, unlike Northern Europe where CCUS facilities are more geographically concentrated. This makes shipping a more attractive mode of CO2 transport in APAC, underscoring the importance of building up a shipping ecosystem.”
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