Carbon Capture, Utilization

and Storage in South East

Asian Context
Sorting out the Myths and Realities
in Cost-Sensitive Markets

Putra Adhiguna
padhiguna@ieefa.org
 The promise to retrofit CCUS into existing assets
70%+ existing captured CO2 is used to produce more oil and gas.
Capture rates of CO2 vary with targets of 85 to 90+% common, realizations
has proven to vary widely

“ Global capacity of 40m tonne CO2 captured annually

– equal to only about 7GW of annual coal power
emissions.

Capture rates describe in percentage terms how much of the total CO2
emissions from a given facility is captured. 2
Cover image : Greenpeace
 What crosses your mind when hearing
about ‘carbon capture’?
Coal power plant? Gas power plant?

CCUS in operation globally

1GW Coal
power
emissions

“ Most CCUS are deployed to process excess CO2 from

gas production. Conflating the discussions on CCUS
raises public confusion on where it’s actually being
deployed and planned for.

Source: : IEA, CNBC, Greenpeace 3

 Context : US is home to more than half of
global CCUS capacity
Plenty of CO2 buyers - mostly for Enhanced Oil Recovery, developed CO2
pipelines with long history of government grants, supports and tax credits
(US$35-50/tonne of CO2 captured)

CCUS in operation globally

“ There are reasons why US has significant CCUS

presence. Yet US$50/tCO2 tax credit is not enough?
Plans abound to propose US$85/tCO2 tax credit
expansion.

Source: Bloomberg NEF 4

 CCUS is not a monolithic subject:
Each CCUS type is running on its own track
Capture costs vary and are typically more dominant than transport and storage costs
CCUS has been used for gas production since the 1970s
Current CCUS cost could easily add 6-9 c/kWh or more to power generation cost

CCUS in hard-to-abate sectors remain critical

Example : Iron & steel, cement

“ Given the variety, adoption of one type of CCUS does

not necessarily translates to another types easily.

Hard-to-abate sectors are those which has limited alternatives for decarbonization
Source: : Adapted from Goldman Sachs Equity Research 2021, IPCC, 5
Global CCS Institute
 South East Asia? CCUS plans are about gas
processing – not power
Some industrial/product-based CCUS, little mention about power sector
SEA is playing catch-up on past trends in gas processing

“
While the public may be captivated by the imagination
of low-to-no emissions coal and gas power, CCUS in
SEA is traveling in a different direction.

Source: ASEAN Secretariat, IEA, IEEFA 6

 Three drivers of CCUS – most of which are
not present in SEA context
Export-based products may be feasible but plays only a tiny role in the
larger context of SEA emissions

Carbon emission price

Singapore is the sole exception?

Public funding support

Subsidies and grants unlikely afforded
at scale by SEA countries

Market drivers
Drivers from investors, corporations, or
commodity buyers

“ There is no dodging the big question : ‘Which CCUS

drivers are present?’, as someone will need to
internalize the cost.

Source: : Compiled sources – Our World in Data, World Bank, IEEFA 7

 Gas production CCUS: Separating CO2 to
make the gas marketable
SEA has notable CO2-rich gas resources. With companies and gas buyers
increasingly becoming sensitive to CO2 emissions, CCUS has become an
imperative for some investments.
Actual capture rates for these projects will need to be in monitored closely*

“ Not all gases are created equal. With notable

CO2-rich gas resources in SEA, the region is likely
anticipating future changes in global market attitude.

Source: : Compiled sources, S&P Global Platts

*) In absence of CCUS, captured CO2 from gas processing are common to be directly 8
released into the atmostphere. Capture rates realization in CCUS projects such as
Australia’s Gorgon has proven to be well below intended target. See report for details.
 Power generation : high cost and patchy history
Decades of public supports, slow adoption and cost decline: Only one
active coal power CCUS, none for gas power.
IEA Projection of coal power CCUS capture cost from U̴ S$65 today to
US$40/tCO2 in 2070

• Energy (and emissions) intensive.

• Energy Penalty - significant loss of power
generation capacity
• Costs of CO2 avoided and not CO2 captured*

Petra Nova
US$1bn CCUS retrofit for 240MW coal power
US’ only coal power CCUS shut down indefinitely in
2021 only after three years in operation – despite
receiving US$190m of grant support

“ In power CCUS, be mindful of few things : History, Energy

penalty, and Cost claims solely based on studies. Also keep
watch on the competing RE+Storage costs decline.

Source: : IEA, EIA

*) In measuring impact of CCUS, emissions coming from CCUS process will need to be 9
considered. The measure should be ‘avoided CO2’ and not solely ‘captured CO2’
 Long trail of public fundings with little outcome
The US Department of Energy has spent US$1.1bn on CCUS demonstration
projects (2010-17), none for power are operational in 2022. EU has spent
at least €424m.

 Similar public funding trend has been noted in

‘Cluster’ CCUS developments which combine
multiple CO2 sources: UK & Norway, despite already
having substantial carbon prices
 International/bilateral funding such as Japan’s JCM
can help CCUS but the scale will likely be limited

“ Most South East Asian countries are unlikely to afford

similar actions to backstop CCUS developments.

Source: : US Government Accountability Office, Dept of Energy,

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European Court of Auditors
 The three (potential) CCUS leaders in Asia
These countries been more prudent in CCUS adoptions, with a lot to catch
up compared to more mature markets

Japan
0.2 MTPA long term trial
South Korea
 CCUS technology leader
Limited to very small pilots
 Leading various CCUS
initiatives in SEA  Exploring regional
China cooperation opportunities

2-4 MTPA in smaller facilities

 Have only started larger

scale projects (1MTPA+)
 81% of WIPO CCUS patents
in 2020/1

“ Their roles are important with US’ rapid departure

from coal, and potentially along with it, its attention
to coal power CCUS – a big part of SEA power mix.

Source: : Compiled source, IEEFA 11

Understand clearly what CCUS could and
could not offer to cost-sensitive markets
While CCUS in hard-to-abate sectors remain important, we need to sort
out the myths and realities

• SEA CCUS plan will likely continued to be dominated by gas processing

• Power generation CCUS maturity pathways will likely play out differently
due to the cost intensity
• Bilateral or multilateral fundings may help some projects but unlikely to
promote widespread adoption
• SEA can use the opportunity to ‘learn the ropes’ of CCUS – especially for
export products while being mindful to examine the fundamental drivers
• CCUS cluster can improve economics – but need to be grounded to other
supporting context such as public funds

“ In absence of strong drivers, widespread adoption

of CCUS in South East Asia remain in question.
Public discussions should remain clear - which CCUS
are being planned out.

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 “ Whether CCUS for power will commercially materialize
remains an open question. By that time, the costs of
RE+Storage will likely have dropped even further, and
the coal & gas plants will already be decades old.

Everyone wants CCUS to be viable, but it should not be

a convenient avenue to postpone important decisions
toward decarbonization.

Source: : Petra Nova, Texas Tribune 13

Read the full report at IEEFA.org
Author contact
Putra Adhiguna
padhiguna@ieefa.org

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