Aligning strategic interests, fostering trust, and building win –win relations are core to these successes and are ingrained in the way the region operates. The Asia–Pacific region has experience in these types of ecosystems, with some of the world’s leading special economic zones, major industrial parks, and megalopolis developments. These involve complex, interlinked commercial arrangements between public and private institutions. This represents up to $100 billion annually.Ī culture of partnerships and relationships: CCUS hub clusters are essentially mega-projects, with extensive regulatory engagement and multihorizon infrastructure investments. For example, the International Energy Agency (IEA) and the Asian Development Bank (ADB) estimate that CCUS could create additional value of between 0.2 percent and 0.6 percent of China’s 2019 GDP by 2030. On the contrary, it has the potential to create jobs, catalyzes innovations, drives trade, monetizes low-carbon product manufacturing, and sustains existing industries with decarbonization. Potential for economic-growth enablement: CCUS is not antithetical to long-term economic growth. These capabilities are significant for CCUS, which requires major new and refurbished infrastructure, rapid technology maturation, and scale economies. These companies have deep track records, proprietary technologies, and economies of scale. Leading engineering, procurement, and construction (EPC) capabilities: Asia boasts world-leading EPC companies and has the world’s largest shipbuilding capacity, with China, South Korea, and Japan holding more than 80 percent of the global market. Most significantly, costs at the storage stage are estimated to be 65 percent lower than the global average (Exhibit 2). In one Southeast Asian offshore basin, unit-abatement costs are comparable to global benchmarks at the capture stage, and the rest of the CCUS value chain is even more cost-efficient. These characteristics are present in many locations across geographies, such as the onshore Cooper Basin (Australia), onshore Sumatra (Indonesia), offshore Bohai Sea (China), and offshore Gulf of Thailand sites. Several fundamentals required to continue this momentum are present in the region, including:Ĭompetitive cost structure: The CCUS value chain overlaps with the upstream oil and gas industry, where the region has many advantages-mature local supply chains efficiencies in wells delivery established operational, maintenance, and health, safety, and environmental (HSE) practices and proven track records from state-owned and independent oil companies. There are now nine CCUS facilities operating in the region, principally in China and Australia, focused on the sequestration of emissions from natural-gas processing and the chemical sector. Five years ago, only two of 23 operational projects across the world were here, but this number has more than tripled. Asia–Pacific has the fundamentals for successful CCUS developmentĪlthough most global CCUS progress is found outside Asia–Pacific, the region has started to galvanize into action. It is also characterized by inequitable access to viable domestic underground storage, and varying levels of regulatory maturity. To realize its potential, the region needs to deliver exponential growth: at least 450 times its current operational CCUS projects. However, unlocking CCUS potential in Asia–Pacific is not an easy task.
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