The Asia-Pacific (APAC) region is set to become the world’s largest hub for CO2 shipping, according to a new report by the energy consultancy Xodus, a subsidiary of offshore construction and services company Subsea7.
The report, published last week, forecasts that by 2055, the APAC region will require nearly 80 specialised vessels for interregional CO2 transport, 8,000 kilometres of pipelines, and more than 90 storage sites to support the large-scale deployment of carbon capture, utilisation and storage (CCUS) technologies.
Unlike Europe, where the proximity of emitters to storage sites has facilitated the deployment of pipeline-based CCUS deployment, APAC’s geography will entail reliance on long-distance maritime transport. The report identifies Japan and South Korea as the primary drivers of regional demand. Both countries lack domestic oil and gas resources, and their storage requirements are expected to necessitate offshore infrastructure comparable in scale to Australia’s liquefied natural gas (LNG) developments.
Simon Allison, Vice President APAC at Xodus, said of the report’s findings: ‘While APAC currently trails areas like the North Sea in terms of deploying commercial-scale CCUS to serve industrial emitters, its large emissions footprint and operational experience in CO2 re-injection positions it to become a global hub for CCUS development in the decades ahead.’
The regional disparity between emission sources and suitable storage locations is identified as a key structural constraint in APAC, with distances in many instances exceeding 5,000 kilometres. To meet projected demand, nearly 80 CO2 carriers will be required by 2050, which is equivalent to approximately 20% of the region’s current LNG fleet. The report indicates that constructing six vessels per year over the next 15 years is operationally feasible.
The study identifies the integration of existing LNG infrastructure as a key strategy for cost reduction. Repurposing existing cryogenic systems, pipeline connections, and port facilities could lower costs by 10 to 15%, which is comparable to shortening shipping routes by more than 3,000 kilometres.
‘Our analysis,’ commented Olivier Mette, Global Advisory Director at Xodus, ‘backed by regionally adjusted cost assumptions and a robust, bottom-up methodology reviewed by leading industry bodies, demonstrates that while early projects will face high transport costs, these are expected to fall significantly as infrastructure scales and more emitters enter the market.’
Despite the high capital costs associated with long-distance offshore transport and storage, the region’s concentration of industrial and power-sector emissions is expected to maintain relatively low costs for capture and onshore collection. This may improve the long-term competitiveness of CCUS in APAC.
The report emphasises the importance of international collaboration, regulatory harmonisation and early investment in shipping infrastructure as critical factors in realising the region’s potential to become a global CCUS leader. The scale and pace of APAC’s infrastructure rollout may also create opportunities for maritime innovation and provide a strategic first-mover advantage.
