According to a 2023 study by the Asia Pacific Energy Research Centre, energy demand across Asia-Pacific is expected to grow by over 10% overall over the next 25 years. Of which, a stunning 100% growth projection is made for Southeast Asia through the year 2050. Indonesia alone is expected to account for 40% of the regional total, as its economy grows over 5% yearly and its middle-class population continues to swell.
In Asia, hydrocarbon oil demand is not expected to peak until 2030 at the earliest. Electricity demand continues to accelerate, as electric vehicles (EV) related policies kick in and industrial electrification gains momentum. While electric generation differs across countries, electricity generation in China and Indonesia is still strongly dependent on coal-powered plants, despite rapidly accelerating investment in renewable electricity production. The ability to reconcile regional growth in energy demand with individual countries’ net-zero policies, carbon capture and storage (CCS) and carbon dioxide removal (CDR) will be a crucial component of regional energy strategies, and the longer-term dilemma is to reduce greenhouse gas emissions (GHG) while Asian economies grow, and international energy transition funding lags.
Each Asian country faces unique challenges. India and Southeast Asian countries are seeing projected increase in energy demand, immediate climate change challenges, as well as an urgent need for affordable and available electricity plus water supply challenges.
India has focused its policy efforts on EV adoption, green hydrogen infrastructure, water, and air pollution abatement. Indonesia has created the region’s first carbon market and is additionally focused on development of its unique resources (geothermal, critical metals, rainforest). Indonesia’s policies have led to a broad CCS and direct air capture (DAC) long range plan by Indonesia’s energy industry. Japan and Korea need to address concentrations of very hard-to-abate industrial assets, such as chemical and steel production, with no significant mitigating subsurface zones for CO2 storage. To address this, the Korean chemical industry is partnering with Malaysia’s Petronas (and possibly also Indonesia) pursuing a regional alliance. Beyond addressing CCS regionally, this collaboration also enables Malaysia to monetize its carbon storage assets.
Japan and Australia are partnering to utilize Australia’s natural gas and green hydrogen advantage as a regional resource to support Japan’s sustainable electricity and industry needs. China continues to accelerate its lead in solar production affordable EV mobility and utility scale batteries faster than any other region. However, the country’s energy demand is so large and still growing, such that China cannot achieve its stated CO2 abatement objectives without significant CCS and DAC adoption. Malaysia and Indonesia also have significant reforestation opportunities, which they can convert into significant carbon removal plays.
Across Asia, CCS requires favorable geology for storage. Storage resources are concentrated in Southeast Asia (Malaysia, Indonesia, Vietnam), China, and Australia. DAC requires access to favorable geography and climate for renewables – which is concentrated in Eastern China, Australia and Southeast Asia.
Only about 80 carbon capture facilities globally are in operation and construction today with hundreds more in development. This represents a 100% projected increase in operations or development from 2022 to 2023 (Global CCS Institute, 2024). The total value of today’s capital project backlog of announced CCS and CDR projects is over US$129 billion (IEC and HP databases). According to the goals and targets set by IEA, COP, governments, and companies, carbon capture will need to be scaled up to 7 gigatons per year of CO2 captured by 2050, a multiple of over 1000 higher than the capture capacity today.
How do CCS and DAC play into this geo-political energy context? Both technologies face similar economic, technological and funding challenges.
The key techno-economic challenges focus around (a) the energy input needed to capture and sequester carbon, (b) the operating challenges of operating carbon capture processes at high scale, including the cost of catalyst (amines or equivalent) regeneration, and (c) the cost, supply chain, and financing challenges of executing and scaling these technologies fast enough to achieve a significant impact in the region.
Many analysts predict that the economics of carbon capture will continue to improve as technology continues to innovate and to scale. The cost of carbon, which has varied between $70/metric ton and $110/metric ton in Europe over the past year, continues to be an uncertainty. What is clear is that digitalization technology has already and will continue to play a crucial role in improving CCS and DAC economics. Industrial AI is becoming an increasingly important part of that equation, especially in capturing, contextualizing and interpreting data from operating carbon capture projects to feed the ongoing innovation and optimization journey of CCS.
Digital technologies will help improve economics, scale-up the new decarbonization processes, accelerate execution of projects, and monitor and validate results.
Agile modeling approaches, assisted by artificial intelligence (AI) provide agility in screening thousands of innovation options – allowing companies to quickly evaluate thousands of (possible) solvents and project designs. In identifying the most efficient, economical, and scalable processes, such tools are helping to develop more efficient carbon capture. For example, AspenTech and Aramco are using generative AI and machine learning approaches to speed up technology evaluation and selection for CO2 capture and low carbon pathways. Pertamina uses agile modeling to evaluate the best programmatic strategies.
Digital modeling and simulation tools, together with edge instrumentation, using the hybrid model approach which combines AI with first principles, provides digital twins that provide feedback to improve economics, performance and reliability, as employed by Mitsubishi Heavy Industries, ExxonMobil, Climeworks, and Technology Centre Mongstad.
Automated workflows from feasibility studies through detailed design, including integration of rigorous cost estimation enables repeatable and modular design mitigate risk. Innovators such as Climeworks in Switzerland; Carbon Capture Inc. in California; Carbon Circle in Norway; and Mitsubishi Heavy Industries in Japan, have developed digitally based modular design and implementation approaches using this streamlined engineering approach.
Advanced digital technologies can identify the best subsurface reservoirs for long-term CO2 storage. Digital solutions are used to engineer projects, de-risk geological storage, and maximize the volume of CO2 that can be injected. It can also set the foundation for monitoring and measurement strategies, necessary to track and account for the CO2 that is being captured and stored.
Once implemented, these born-digital modular systems have data collection, automation, and digital twin technologies built in to the systems. As such, this enables better operation and management, as well as feedback loops to drive continued innovation towards the next-generation design, while optimizing costs and economics.
With the ability to provide verifiable and auditable data, digital tools can address industry skeptics. Accurate measurement and reporting of the emissions reductions, the carbon removal, and the monitoring in place of the stored carbon, are essential for building trust and demonstrating compliance with regulatory standards. Tools that offer detailed tracking and validation of carbon capture processes can help dispel doubts and highlight the tangible benefits of these technologies.
As companies refine their strategies and technologies, the integration of innovative solutions will be key to achieving sustainable impact on global carbon emissions. Digital technologies can help to realize this much faster.
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