A JOINT study by the Global Centre for Maritime Decarbonisation (GCMD) and Boston Consulting Group (BCG) has identified shipping to play a vital role in cross border carbon capture initiatives.
The report, titled “Opportunities for Shipping to Enable Cross-border CCUS Initiatives”, found that shipping CO2 will be especially important in the Asia Pacific (APAC) region due to the vast oceans that separate emitters and sequestration sites when compared to Europe.
The study stated that shipping particularly plays a key role in Carbon Capture, Utilisation and Sequestration (CCUS) when there is a large geographical mismatch between potential captured CO2 sources and sequestration hubs.
The report highlighted several APAC governments, including Australia, Indonesia, Japan, Malaysia, Singapore, and South Korea, are pursuing cross-border partnerships and initiatives to support cross-border CO2 transportation and sequestration.
The study estimated that approximately 100 million tons per annum (MtPA) of CO2 captured using carbon capture technologies is expected to be transported across APAC by 2050.
To transport this projected annual tonnage would require between 85 to 150 liquefied CO2 carriers of 50 kilotonnes capacity, with the total investments needed for these vessels could reach US$25 billion by 2050.
The study found that shipping becomes economically advantageous compared with pipeline transport of the same amount of CO2 at longer distances, with a threshold distance of 500km identified to be economically viable for transporting 5 MtPA CO2 transport via shipping.
The emerging cross-border CCUS hubs and routes that are aligned with this criteria for CO2 shipping include the Northern Lights project, which spans 500 to 1000 km, intra-southeast Asia routes ranging from 450 to 970 km, and the longest routes, northeast Asia to Australia, which extends from 6000 to 11,000 km.
The report found that to stimulate cross-border CCUS investment, stakeholders need clear technical specifications for CO2 pressure, temperature, and purity, as these have significant cost, operational, and safety implications.
Further, the report idenfified three components that governments and private sector players must provide to activate the shipping industry for cross-border CCUS, including direct economic support, long-term contracts and minimum volume guarantees, and clarity on standards and specifications for shipping.
Professor Lynn Loo, CEO of GCMD said, “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.”
Carl Clayton, partner and associate director, global co-lead for BCG’s CCUS topic commented, “The unique distribution of large emitters and sequestration sites across APAC offers significant opportunities for CO2 shipping and cross-border CCUS”.
“Southeast Asia and Australia can utilise their vast depleted oil and gas and other storage assets, to foster green economy growth and international collaboration. Government support will be essential in the short term to ensure economic viability and to address cross value chain risks.”
The report concluded the success of CCUS hinges on the simultaneous development of all parts of its value chain, including midstream activities like shipping and intermediate storage.
