Comprehensive CCUS Research Report: Storage, Value Chain, Policy & Regulation and Financing

Table of Contents

• Table of Contents 6
• Geological Storage Potential of CO2 in Southeast Asia 19
• Establishment of Asia CCS/CCUS Value Chain as a Collective Framework in the Asia Pacific Region 21
• Legal and Policy Framework for Deployment of CCUS in Asia Region, focused on ASEAN 23
• Study on Financial Framework for Deployment of CCUS in the Asian Region, including ASEAN 29
• Geological Storage Potential of CO2 in Southeast Asia 34
• 1.1. Southeast Asian CO2 Storage Resource Development 34
• 1.1.1. Current CCS Deployment Status 34
• 1.2. Methodology 36
• 1.2.1. Basin Suitability Assessment and Source Sink Matching 36
• 1.2.2. Resource Calculation 40
• 1.2.2.1. Depleting and Depleted Hydrocarbon Fields 40
• 1.2.2.2. Saline Formations 42
• 1.2.2.3. CO2 EOR-Storage (CCUS) 44
• 1.3. Results and Discussion 46
• 1.3.1. Indonesia 46
• 1.3.1.1. CO2 Storage Resources Summary 47
• 1.3.1.2. Prospective Basins with Potential Clusters 51
• 1.3.1.2.1. Central Sumatra 51
• 1.3.1.2.2. South Sumatra Basin 52
• 1.3.1.2.3. Java Island 54
• 1.3.1.2.4. Kutei 56
• 1.3.1.3. Summary of storage deployment prospects, barriers, and issues 56
• 1.3.2. Malaysia 57
• 1.3.3. CO2 Storage Resource Summary 58
• 1.3.3.1. Prospective Basins with Potential Clusters 62
• 1.3.3.1.1. Malay Basin (Thailand and Malaysian Waters) 62
• 1.3.3.1.2. Sarawak 64
• 1.3.3.1.3. Sabah - Baram Delta 66
• 1.3.3.2. Summary of Storage Deployment Prospects, Barriers, and Issues 67
• 1.3.4. Brunei 67
• 1.3.4.1. CO2 Storage Resource Summary 67
• 1.3.4.2. Prospective Basins with Potential Clusters 69
• 1.3.4.2.1. Sabah - Baram Delta 69
• 1.3.4.3. Summary of Storage Deployment Prospects, Barriers, and Issues 71
• 1.3.5. Thailand 71
• 1.3.5.1. CO2 Storage Resource Summary 72
• 1.3.5.2. Prospective Basins with Potential Clusters 76
• 1.3.5.2.1. Pattani 76
• 1.3.5.2.2. Khorat, Greater Choa Phraya and Phitsanulok basins 77
• 1.3.5.3. Summary of storage deployment prospects, barriers, and issues 78
• 1.3.6. Viet Nam 78
• 1.3.6.1. CO2 Storage Resource Summary 79
• 1.3.6.2. Prospective Basins with Potential Clusters 82
• 1.3.6.2.1. Cuu Long Basin 83
• 1.3.6.3. Summary of Storage Deployment Prospects, Barriers, and Issues 85
• 1.3.7. Philippines 85
• 1.3.7.1. CO2 Storage Resource Summary 86
• 1.3.7.2. Prospective Basins with Potential Clusters 87
• 1.3.7.2.1. North Palawan Basin 87
• 1.3.7.3. Summary of Storage Deployment Prospects, Barriers, and Issues 88
• 1.3.8. Singapore 89
• 1.3.9. Cambodia, Lao PDR, and Myanmar 89
• 1.4. Summary and Recommendations for Storage Development 89
• Establishment of Asia CCS/CCUS Value Chain as a Collective Framework in the Asia Pacific Region 98
• 2.1. Introduction 98
• 2.2. Understanding Clusters, Hubs, and Networks 98
• 2.2.1. Clusters 98
• 2.2.2. CCS Hubs 99
• 2.2.3. CCS Networks 99
• 2.3. Strategic Benefit of CCS Networks 99
• 2.3.1. Cost Reductions through Shared Infrastructure 100
• 2.3.2. Enabling the Use of CCS for Smaller Emissions Sources 100
• 2.3.3. Enabling CCS in Regions without Access to Suitable Local Storage 100
• 2.3.4. Enabling Low-Carbon Industrial Production 100
• 2.3.5. Reduced Exposure to Resource Constraints 101
• 2.4. CCS transportation methods 101
• 2.4.1. Pipeline 101
• 2.4.2. Shipping 102
• 2.4.3. Rail and Truck 106
• 2.5. CCS Transport Cost Trends 106
• 2.6. Hypothetical CCS Network Design and Costs 112
• 2.6.1. CCS Network Configuration 112
• 2.6.2. Vertically Integrated CCS Project Configuration 113
• 2.6.3. CCS Network Emissions Sources 113
• 2.6.4. Design Basis 115
• 2.6.5. Cost Basis 119
• 2.6.6. CCS Network Design Costs 119
• 2.6.7. Conclusions and Recommendations 125
• 2.7. Regional Legal and Institutional Frameworks Necessary to Support CCS Hub and CO2 Transport Networks 126
• 2.7.1. Introduction 126
• 2.7.2. Regional Legal and Regulatory Frameworks for Southeast Asia 128
• 2.7.2.1. International Legal Frameworks - London Protocol Implications for Transboundary Transport and Storage of CO2 128
• 2.7.2.2. Transboundary transport of CO2 128
• 2.7.2.3. Storage of CO2 - Allocation of Responsibilities 130
• 2.7.2.4. Acceptance and Application of the London Protocol and Its Amendments 131
• 2.7.3. Regional Legal and Regulatory Frameworks for CCS 132
• 2.7.3.1. Cooperative Legal Framework – EU Directive Case Study 132
• 2.7.3.2. Cooperative Regulatory Framework 134
• 2.7.3.3. Enabling Policies 135
• 2.7.4. Models for Regional CCS Cooperation 135
• 2.7.5. Integrated Regional Emissions Trading System (ETS) 137
• 2.7.6. Project Considerations 141
• 2.7.6.1. Cost competitiveness of Southeast Asia 141
• 2.7.7. Integrated Investment Frameworks 141
• 2.7.8. Institutional Frameworks in Southeast Asia 144
• 2.8. Asian CCS Value Chain Centre 145
• 2.8.1. The Opportunity 145
• 2.8.2. Focus Areas for a CCS VCC 147
• 2.8.2.1. Policy, Regulations, and Standards 147
• 2.8.2.2. Network and Infrastructure Planning 148
• 2.8.2.3. Funding for CCS Infrastructure/Projects 148
• 2.8.2.4. Storage Resource Appraisal and Development 149
• Legal and Policy Framework for Deployment of CCUS in Asia Region, focused on ASEAN 151
• 3.1. Introduction 151
• 3.2. Overview and Methodology 152
• 3.2.1. Stakeholder Engagement 152
• 3.2.2. Review and Analysis 153
• 3.2.3. Structure 154
• 3.3. Policy Architecture for CCS – Overarching Considerations 154
• 3.3.1. Integration of CCS within Wider Domestic/International Commitments 154
• 3.3.2. Energy Roadmaps/Climate Strategies 155
• 3.3.2.1. National CCS Roadmaps/strategies 155
• 3.3.2.2. ASEAN Strategy for Carbon Neutrality 162
• 3.3.3. Paris Commitments/NDCs and CCS Specific Commitments 169
• 3.3.3.1. Singapore 169
• 3.3.3.2. Indonesia 169
• 3.3.3.3. Thailand 170
• 3.3.3.4. Malaysia 170
• 3.3.3.5. The Philippines 171
• 3.3.3.6. Viet Nam 171
• 3.3.3.7. Brunei Darussalam 171
• 3.3.4. Consideration and Position of CCS in Existing or Proposed Incentives and Support Mechanisms 172
• 3.3.4.1. Carbon Credits/Tax Credits/Funding/Finance 172
• 3.3.4.2. Transboundary Bilateral Agreements 177
• 3.4. Designing CCS-Specific Law and Regulation 178
• 3.4.1. Approach to Developing CCS-Specific Legislation 178
• 3.4.1.1. Supporting Domestic Policy Priorities 179
• 3.4.2. Role of Existing Regulatory Pathways 179
• 3.4.3. Social License Considerations 180
• 3.4.4. Scope of Frameworks 182
• 3.4.4.1. Permitting Various Applications 182
• 3.4.4.2. The Inclusion of Carbon Dioxide Removal (CDR) within CCS-Specific Legislative Frameworks 183
• 3.4.5. Detailed Review and Assessment of Domestic Regimes 184
• 3.4.6. Identifying and Designating a Regulatory Authority 186
• 3.4.7. Stakeholder Engagement in the Development of Legislation 187
• 3.5. Overarching Legal and Regulatory Considerations 189
• 3.5.1. International Obligations and Considerations 189
• 3.5.2. The Legality of Transboundary Offshore CO2 Storage Value Chains under the London Protocol 196
• 3.5.3. Interactions with Wider Domestic Legal Frameworks 199
• 3.5.4. Enabling Emerging Project Models 201
• 3.5.5. Eligibility under Carbon Crediting Mechanisms 202
• 3.5.6. Interaction with Reporting and Accounting Mechanisms 203
• 3.5.6.1. Accounting and Reporting Obligations in the Context of Transboundary CCS Value Chains 204
• 3.5.7. Developing National Protocols and Regulatory Guidelines 205
• 3.6. A CCS-Specific Legal and Regulatory Framework 208
• 3.6.1. Identifying the Key Elements of a Legal and Regulatory Framework 209
• 3.6.1.1. Assessment and Guidance Frameworks 209
• 3.6.2. ASEAN Nations’ Perspectives 211
• 3.6.3. Developing a Permitting Model for CCS Activities 213
• 3.6.4. Core Legal and Regulatory Issues Across the CCS Project Lifecycle – the Institute’s Model 216
• 3.6.5. Pre-Injection 218
• 3.6.5.1. Classification and Purity of CO2 Streams 218
• 3.6.5.2. Ownership of the Pore Space within CO2 Storage Sites 219
• 3.6.5.3. Ownership or Title to Stored CO2 220
• 3.6.5.4. Authorisation to Conduct Assessment for Potential CO2 Storage Sites 221
• 3.6.5.5. Site Characterisation Requirements 222
• 3.6.5.6. Construction and Development Requirements 223
• 3.6.5.7. Environmental Impact Assessments 224
• 3.6.5.8. Public Engagement Requirements 226
• 3.6.5.9. Clarification of Obligations where There are Interactions with Existing Resource Interests 227
• 3.6.5.10. Transboundary CO2 Storage Considerations 228
• 3.6.6. Operation 229
• 3.6.6.1. CO2 Capture 230
• 3.6.6.2. CO2 Transport 230
• 3.6.6.3. Authorisation of Storage Activities 231
• 3.6.6.4. Development of Plans 232
• 3.6.6.5. Monitoring, Reporting and Verification Requirements 233
• 3.6.6.6. Corrective Measures and Remediation Measures 234
• 3.6.6.7. Liability During the Project Period 235
• 3.6.7. Closure 237
• 3.6.7.1. Authorisation for Storage Site Closure 238
• 3.6.7.2. Well Plugging and Decommissioning Requirements 238
• 3.6.8. Post-Closure 239
• 3.6.8.1. Post Closure Site Care and Monitoring Requirements 240
• 3.6.8.2. Transfer of Liability and Stewardship 240
• 3.6.8.3. Financial Security 242
• Design and Structure of Indonesia’s New CCS-Specific Regime 213
• Study on Financial Framework for Deployment of CCUS in the Asian Region, including ASEAN 245
• 4.1. Introduction 245
• 4.2. Global Economic Net Zero Optimization (GENZO) Model 245
• 4.3. Scenarios 247
• 4.4. High-Level Results 249
• 4.5. CCS 275
• 4.6. The CCS Financing Challenge 285
• 4.7. Policies to Incentivise Investment in CCS 287
• 4.7.1. USA 287
• 4.7.2. European Union and the United Kingdom 290
• 4.7.3. Japan 293
• 4.7.4. Effective Policies – Observations 293
• 4.8. Public Finance for CCS in ASEAN 294
• 4.9. Potential Sources of External Finance 297
• 4.9.1. Multilateral Development Banks 297
• 4.9.2. Voluntary Carbon Markets 300
• 4.9.3. Sustainable Finance – Green and Climate Bonds 301
• 4.9.4. The Loss and Damage Fund 302
• 4.10. The Role of Carbon Pricing 303
• 4.11. Policy Recommendations 304
• 4.11.1. Phase 1 – First Projects; 2020s 305
• 4.11.2. Phase 2 – CCS Network Establishment and Deployment Ramp-up; 2030s 306
• 4.11.3. Phase 3 - CCS Industry Maturity: 2040s and beyond 308
• References 310
• Appendices 320
• Appendix A 320
• Appendix B 322