Transport and storage could prove to be “a major bottleneck” in scaling carbon capture, utilisation and storage (CCUS) technology as a viable decarbonisation solution, a new study found.
To continue reading, subscribe to Eco‑Business.
There's something for everyone. We offer a range of subscription plans.
- Access our stories and receive our Insights Weekly newsletter with the free EB Member plan.
- Unlock unlimited access to our content and archive with EB Circle.
- Publish your content with EB Premium.
Led by China, Japan and Indonesia, 41 million metric tonnes of carbon capture capacity is set to come online by 2030, which far outpaces the proposed 6 million metric tonnes of transport and storage capacity in the same period, said Temasek-owned investment platform GenZero and research provider BloombergNEF.
Under the report’s status quo decarbonisation scenario, the nascent technology is expected to play “a nearly negligible role” in this region due to its high costs, exacerbated by a lack of clear regulations as well as permitting delays.
But for Asia to get to net zero by 2050, it needs to start deploying CCUS within the next seven years, said Sahaj Sood, a senior associate with BloombergNEF at the paper’s launch event on Wednesday.
However, already proven and commercially-scalable technologies like wind and solar power will still be “the single biggest contributor to emissions abatement” in the net zero scenario, said Sood. “The key difference is that clean power has to be supported by a more diverse set of technologies, some of which may not be commercially viable today.”
The solid bars show cumulative capacity by 2030 and dotted-filled bars represent capacity with no announced commissiong year. The chart shows proposed capacities in China, India, Japan (including a bilateral project with Australia), South Korea, Indonesia and Vietnam. Image: BloombergNEF
Apart from Japan and Indonesia, no other Asia Pacific market to date has clear regulations around domestic and cross-border CCUS activities. Malaysia – which aims to develop three CCUS hubs with a shared storage capacity of up to 15 million tonnes per annum by 2030 – plans to pass its own CCUS bill by year-end.
In the study’s net zero scenario, clean power – which includes nuclear – will account for half of the region’s emissions reductions by 2050. CCUS is expected to make up 14 per cent of Asia’s carbon abatement efforts, while hydrogen and bioenergy would contribute 4 per cent each.
Failure to scale CCUS means that other potentially more expensive alternatives, such as hydrogen and bioenergy, might be needed to meet the region’s climate targets, the report’s authors said. They expect two-thirds of emissions captured by CCUS to come from Asia by 2050, driven by China and India’s expansive coal fleets.
Under the report’s net zero scenario, 75 per cent of Asia’s emissions abated through CCUS will come from the power sector. Of which, 80 per cent will be captured from combusting coal, followed by 16 per cent from gas and 1 per cent from oil. Image: BloombergNEF
“The reality is that if it weren’t CCUS that was playing this role, it would have to be something else. In this year’s modelling, what we found was… CCUS was relatively more mature than some of the other alternatives,” said Sood, who added that this might change in next year’s analysis. “But the industry is going to have to make some significant progress on cost reductions and technological developments if it is to turn this vision into reality.”
Despite decades of investments, CCUS has only abated 0.1 per cent of global emissions to date. Researchers and environmentalists have also warned that Japan’s promotion of CCUS, alongside ammonia co-firing, across Southeast Asia might prolong the use of fossil fuels, instead of phasing them out.
Other technologies identified as not currently cost-competitive, but “imperative” for the region to meet its decarbonisation targets include sustainable aviation fuels and heat pumps, which the study estimates must scale by 1,221.9 and 10.3 times, respectively.
US$88.7 trillion of investments – just 20 per cent above what is currently pledged – will be needed by 2050 for Asia to meet the Paris Agreement goal of limiting global warming to 1.5°C above pre-industrial levels, the report stated.
In response to Eco-Business query on the carbon price required to mobilise this extra financing, Ali Izadi-Najafabadi, BloombergNEF’s Asia Pacific head, said that the range around US$100 per tonne is “somewhat correct”.
But he highlighted that the exact figure will depend on specific circumstances, where to incentivise an iron ore producer to switch from dirty energy to clean hydrogen – priced at say, US$2 per kilogramme – would require carbon pricing to reach at last US$80 per tonne.
Additionally, most countries in Southeast Asia will probably need to address price distortions, in the form of direct and indirect fossil fuel subsidies, before introducing carbon pricing, he said.
Data centre boom unlikely to thwart Asia’s transition
When asked if the artificial intelligence (AI)-driven data centre boom will threaten Asia’s clean power goals, Izadi-Najafabadi told Eco-Business that “the [emissions] numbers don’t look that sizeable” on an aggregate basis.
“If you look at the annual electricity consumption of most countries, and try to suss out the proportion that comes from data centres of AI, it’s not a huge number. But when you’re looking at a city-state like Singapore, yes, it could be a significant issue,” he said.
But the challenges presented by data centres are not so much on the energy generation side, but grid and dispatch capacity, which is why many big tech companies are interested in powering their data centres with nuclear and geothermal power, rather than intermittent renewable energy sources.
On Tuesday tech giant Google signed a deal to purchase nuclear power from a small modular reactor developer Kairos Power. Last month, its competitor Microsoft also entered a 20-year deal to revive a nuclear power plant in the United States to fuel its data centre ambitions.
Speaking on the sidelines after the event, Izadi-Najafabadi acknowledged that data centre-related emissions have not been comprehensively quantified so far and shared that BloombergNEF is currently working on a separate report to calculate the sector’s carbon footprint.
Last month, an investigation by news outlet The Guardian found that emissions from in-house data centres of Google, Microsoft, Meta and Apple may be 7.62 times higher than official claims, due to the use of renewable energy certificates generated far away from where their data are processed.
