SHIPPING could play a pivotal role in emerging cross-border carbon capture, utilisation and sequestration (CCUS) initiatives in Asia-Pacific, according to a new study by the Global Centre for Maritime Decarbonisation and Boston Consulting Group.

The report projects regional countries could require between 85 to 150 vessels by 2050 to transport around 100m tonnes per year of captured carbon dioxide across borders.

Shipping CO2 is more economical compared to pipelines at distances more than 500 km when transporting 5m tonnes annually, the analysis found. This makes sea transport an attractive option for important CCUS routes in the region.

For example, the Northern Lights project extending 500 km – 1,000 km, intra-Southeast Asia routes of 450 km – 970 km, and long-haul links from Northeast Asia to Australia at 6,000 km – 11,000 km are prime candidates for CO2 shipping.

The study estimated the investment for the projected liquefied CO2 shipping fleet could total $25bn by mid-century.

Stakeholders must still address several challenges for cross-border CCUS networks enabled by shipping to reach their full potential.

One is closing the gap between levelised costs of end-to-end CCUS operations, pegged at $141-$287 per tonne of CO2 for Asia-Pacific routes, and current carbon prices and incentives ranging from $2-$18 per tonne in regional markets.

This 10-fold difference could hamper investment without additional government subsidies and business model innovation to improve project economics, according to the study.

Nascent regulations around permitting, liability, and standards also pose hurdles. Countries were advised to expedite clear rules and guidelines for domestic CCUS activities and cross-border transport to provide investor certainty.

Additionally, the lack of harmonised technical specifications for shipping CO2 could hinder seamless infrastructure connections. Early alignment by stakeholders on acceptable pressure, temperature and purity thresholds was cited as essential.

Offering a degree of flexibility on purity levels was suggested as a way to balance purification costs versus infrastructure compatibility for regional emitters.

Despite the challenges, GCMD chief executive Lynn Loo said Asia-Pacific has the potential to lead global CO2 shipping given its geographical advantages.

“This effort entails constructing CO2 carriers, developing port-side infrastructure, establishing standards and guidelines for transporting and offloading CO2, and upskilling crew with requisite training,” Loo added.

BCG½s Carl Clayton said realising the upside potential would hinge on collaborative efforts by governments and industry to ensure CCUS value chain viability across borders.

“Northeast Asian emitting countries have a chance to drive technological innovation and strengthen their leadership in commodity shipping, while Southeast Asia and Australia can utilise their vast depleted oil and gas and other storage assets, to foster green economy growth and international collaboration,” Clayton added.

The report stated that several governments in the region, including Australia, Indonesia, Japan, Malaysia, Singapore and South Korea, are pursuing partnerships and initiatives to support cross-border CO₂ transport and sequestration.

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