The Asia Pacific (APAC) region is rapidly emerging as a major player in the carbon capture and storage (CCS) sector as countries intensify their decarbonisation efforts.
Despite challenges like unsuitable geological conditions in some nations, Rystad Energy’s research highlights Australia, Malaysia and Indonesia as emerging CCS hubs driven by their depleted oil and gas reservoirs’ CO2 storage potential and stricter environmental regulations.
“The race is on for CO2 mitigation leadership in APAC,” said Sohini Chatterjee, Senior Analyst at Rystad Energy.
“Policymakers are taking steps to close regulatory gaps, create a friendly investment environment through incentives, and establish standardised CCS frameworks.”
Southeast Asia is emerging as a promising contender, offering some of the most cost-effective CO2 storage options in APAC.
This has prompted carbon-intensive countries like Japan and South Korea to forge cross-border alliances with the likes of Malaysia’s Petronas, Indonesia’s Pertamina, and Australian firms like Santos and Woodside Energy.
Momentum is building on policies in Australia, Malaysia and Indonesia to address regulatory gaps and position them as key regional CO2 storage hubs, leveraging depleted oil and gas fields, ample storage capacity, existing infrastructure and supportive regulations.
2022 was a record year for carbon capture, utilisation and storage (CCUS) projects in APAC, with more new initiatives launched than any previous year, accounting for over half the region’s total CO2 capture capacity.
The surge was driven by Australia, East and Southeast Asia amid policies promoting cross-border CCUS.
While China prioritises national projects, Japan and South Korea focus on cross-border permanent storage initiatives.
Australia’s extensive CO2 storage potential and comprehensive regulations position it as a key regional player, though regulatory gaps like the London Protocol limitation persist.
“Ultimately, the region with the most cost-effective solutions and clear CO2 storage pathways will lead,” Chatterjee said.
“Strong government support through financing and standardised frameworks will be vital for unlocking the full CCS value chain.”
As the race to be APAC’s CCS leader intensifies, time will tell if Australia, Malaysia, Indonesia or other emerging players take the lead in this crucial decarbonisation technology.