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1、Opportunities for Shipping to Enable Cross-Border CCUS Initiatives December 2024By Dr.Sanjay C Kuttan,Eng Kiong Koh,Carl Clayton,Dave Sivaprasad,Anand Veeraraghavan,Sanjaya Mohottala,and Calvin KhaingThe Global Centre for Maritime Decarbonisation(GCMD)was established as a non-profit organisation on

2、1 August 2021 with a mission to support the decarbonisation of the maritime industry by shaping standards,deploying solutions,financing projects,and fostering collaboration across sectors.Founded by six industry partners namely BHP,BW Group,Eastern Pacific Shipping,Foundation Det Norske Veritas,Ocea

3、n Network Express and Seatrium,GCMD also receives funding from the Maritime and Port Authority of Singapore(MPA)for qualifying research and development programmes and projects.Since its founding,bp,Hanwha Ocean,Hapag-Lloyd and NYK Line have joined as Strategic partners.To-date,over 100 centre-and pr

4、oject-level partners have joined GCMD,contributing funds,expertise and in-kind support to accelerate the deployment of scalable low-carbon technologies and lowering adoption barriers.Since its establishment,GCMD has launched four key initiatives to close technical and operational gaps in:deploying a

5、mmonia as a marine fuel,developing an assurance framework for drop-in green fuels,unlocking the carbon value chain through onboard carbon capture and articulating the value chain of captured carbon dioxide as well as closing the data-financing gap to widen the adoption of energy efficiency technolog

6、ies.GCMD is strategically located in Singapore,the worlds largest bunkering hub and busiest transshipment port.For more information,go to www.gcformd.orgBoston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportun

7、ities.BCG was the pioneer in business strategy when it was founded in 1963.Today,we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow,build sustainable competitive advantage,and drive positive societal impact.Our div

8、erse,global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change.BCG delivers solutions through leading-edge management consulting,technology and design,and corporate and digital ventures.We work in a uniquely collaborative mode

9、l across the firm and throughout all levels of the client organization,fueled by the goal of helping our clients thrive and enabling them to make the world a better place.Table of Contents01 Executive summary02 Chapter A:Importance of shipping in the CCUS ecosystem03 Chapter B:Complexities of shippi

10、ng CO204 Chapter C:Key technical considerations for handling CO2 05 Chapter D:Opportunities in APAC06 Chapter E:CCUS value chain challenges in APAC 07 Chapter F:A roadmap for action08 Appendix1 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESWith Carbon Capture,Utilization,and Sequ

11、estration(CCUS)likely to be a key lever in reducing carbon dioxide(CO2)emissions,effective and economical transportation of CO2 will play a key role in bridging emitters with utilization sites or sequestration sinks within this ecosystem.In countries with limited economically viable greenhouse gas(G

12、HG)abatement options for their energy intensive sectors,CCUS presents a potential pathway towards supporting their achievement of net-zero targets.Shipping is a crucial component of this value chain where CO2 needs to be transported across vast distances between points of capture and utilization or

13、sequestration.Shipping offers economic advantages when captured CO2 need to be transported over long distances,compared to pipelines1.However,cross-border transport of CO2 requires an effective cross-border framework to properly account abated emissions.The significance of shipping in the CCUS value

14、 chain is particularly prominent in Asia-Pacific(APAC),where expansive oceans and seas separate the emission sources and available sequestration sinks,necessitating a robust logistical network to connect them.Some APAC countries are taking steps to develop CCUS as a cornerstone of their decarbonizat

15、ion pathway by establishing collaborations across borders.Notably,Japan,South Korea,and Singapore are emerging as likely net exporters of CO2,while Malaysia,Indonesia,Australia,and Brunei are potential net importers.Executive summary1.Threshold distance of 500 km for 5 MtPA(elaborated in Chapter A)2

16、 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESBy 2050,approximately 100 million tons per annum(MtPA)of captured CO2 is expected to be transported across national borders in APAC,with 85 to 150 vessels(i.e.,50 kt liquefied CO2 carriers)required to support the scale of this activi

17、ty.The total investments needed for these vessels by 2050 could be USD 10 to 25 billion.When including anticipated annual CO2 shipping volumes from CCUS in Europe,total global annual sequestered volumes by 2050 could reach 170 MtPA.The potential global investments required for these vessels(i.e.,20

18、to 50 kt liquefied CO2 carriers)could go up to USD 30 billion or higher,should CO2 shipping markets emerge beyond APAC and Europe.To stimulate investment in cross-border CCUS,companies need clarity on technical considerations.CO2 pressure,temperature,and purity specifications have significant cost,o

19、perational,and safety implications.While shipping CO2 under Medium Pressure (MP)conditions is the norm in this nascent industry,interest is growing in Low Pressure(LP)and Elevated Pressure(EP)conditions2 for scale,economic and operational considerations.Each condition will have its own advantages.Fo

20、r example,LP may offer economic benefits,such as increased vessel capacity and lower vessel capital expenditure(CAPEX),but it is operationally disadvantaged because CO2 is stored at conditions closer to the triple point,with this proximity increasing the risk of dry ice formation compared to storage

21、 and transport at other conditions.Additionally,impurities in CO2 have implications on infrastructure buildout(e.g.,asset reliability of vessel tanks and type of intermediate storage tanks)and the purification process to remove impurities comes with significant operational costs.There is a trade-off

22、 between the cost of purification and the risk of accommodating impurities within the CO2 storage and delivery infrastructure.CO2 purity specifications and responsibility for its purification need to be aligned at least within a projects value chain from capture to sequestration,to provide clarity a

23、nd interoperability among participants along the value chain.Today,CO2 purity specifications are not harmonized across different projects.In APAC,the prevalence of sizeable emitters3 reduces the need to aggregate captured CO2 from different emitters,which opens the possibility of relaxing impurity t

24、hresholds compared to open-source models that need to maintain stringent CO2 purity specifications to accommodate the aggregation of captured CO2 from a diverse set of emitters.The investments required to support CCUS in APAC,including shipbuilding,port and terminal infrastructure development,is sub

25、stantial.The end-to-end levelized costs4 of cross-border CO2 value chain via shipping(from capture to sequestration)range from USD 141-174 per ton of CO2(tCO2)for intra-Southeast Asia(SEA)routes to USD 167-287/tCO2 for routes between Japan and Australia.Poor CCUS project economics and nascent regula

26、tions pose challenges to advance CCUS at scale.The current gap between the cost of cross-border CCUS and available carbon pricing in APAC is approximately 10-fold,and presents a significant hurdle to kickstart this industry.The articulation of supporting regulations and standards also necessitate cl

27、ose coordination between governments and industry stakeholders.To activate shipping for cross-border transport of captured CO2,governments and private sector need to work together to develop economic incentives and mandates,clarify domestic regulations and standards,and set up comprehensive cross-bo

28、rder agreements with like-minded governments.Only then can shipping and other CCUS stakeholders invest,participate,and coordinate activities across the value chain to achieve the net zero ambitions of countries in the region.2.LP conditions(5.7 bara to 10 bara,-54.3C to-40.1C),MP conditions(14 bara

29、to 19 bara,-30.5C to-21.2C),EP conditions (35 bara to 46 bara,0C to 10C)3.Over 1 MtPA annual volume for shipping economies of scale(elaborated in Chapter D)4.Levelized cost estimates calculated using 2023 prices,assuming an 8%discount rate and a 20-year project horizon.Analysis considers low-pressur

30、e shipping conditions,with the value chain boundary defined from capture to sequestration3 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESAn overview of the CCUS ecosystemTo limit global temperature rise to 1.5C by 2050,the immediate and steady reduction of global emissions at a l

31、evel to stay within the carbon budget is essential5.CCUS deployment contributes to the broad strategy for decarbonization,particularly for stationary emitters and sectors where abatement options are limited.By employing technologies to capture and sequester (or utilize)CO2,CCUS can contribute signif

32、icantly to the global effort,potentially accounting for up to 8%of the cumulative CO2 reductions needed to achieve the 2050 Net Zero Emissions(NZE)target(as illustrated in Exhibit A1).Chapter A:Importance of shipping in the CCUS ecosystem5.The best estimates from IPCC on the remaining carbon budget(

33、RCB)from the beginning of 2020 for limiting warming to 1.5C with a 50%likelihood is estimated to be 500 GtCO2;for 2C(67%likelihood)this is 1,150 GtCO24 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESCumulative CO2 emissionsWind and solarElectrifi-cationEnergy efficiencyActivity re

34、ductionOther fuel shiftsCCUSBioenergyHydrogen(%of 2022-2050 cumulative CO2 savings,global)Contribution to NZE 2050 by mitigation measures 25%20%12%12%12%8%7%4%Exhibit A1-Eight key types of mitigation measures are projected to be key to achieve NZE 2050 CCUS is one of themSources:IEA(2023),“Net Zero

35、Roadmap:A Global Pathway to Keep the 1.5C Goal in Reach”CCUS uptake must accelerate significantly in the coming decades to support a 2050 NZE scenario,with captured CO2 sequestered underground in depleted oil and gas fields(DOGF)or in saline aquifers.To achieve this goal,the CCUS industry needs to g

36、row by 19%annually6 from current levels until 2050,requiring substantial uptake across all sectors.By mid-century,most captured CO2 will likely come from established sectors,such as industrial manufacturing and fossil fuel power generation.Emerging sectors,such as low-carbon hydrogen production,may

37、also contribute to meet the decarbonization targets.Exhibit A2 illustrates the growth required in CCUS technology globally by 2050 and the role of CCUS in various sectors.6.Based on IEAs NZE scenario and BCGs CCUS Global Deployment Scenarios model202220302050CCUS volume by sector(global,MtCO2)Exhibi

38、t A2-Majority of CCUS uptake expected to come from industry and fossil fuel power generation1571421491873217497803938232,6745,4194495638411+19%HydrogenCCUS necessary to convert grey hydrogen produced by the steam reforming process to blue hydrogenBioenergyBioenergy with CCUS(BECCS)necessary to captu

39、re CO2 produced by biofuels conversion(e.g.,ethanol production)or combustionCementCCUS necessary to capture CO2 produced by calcination of limestone to produce lime Industry3BioenergyFossil fuel power generationHydrogen1Other fuel transformation2ChemicalsCCUS necessary to capture CO2 produced from p

40、roduction of ethylene,propylene,methanol,etc.Iron and steelCCUS necessary to capture CO2 produced at various steps of the industrial process including coking coal,blast furnacesFossil fuel power generationAny remaining fossil fuel power generation needs to be abated by CCUS(including fossil fuel tra

41、nsformation2)Note:Alternative technologies are currently more expensive generally(e.g.,electrolysis for H2 production is 1.7x blue H2 production cost)1.Including hydrogen-based fuels such as ammonia2.Other fuel transformation mainly covers sectors such as petroleum refining and natural gas processin

42、g3.Cement,iron and steel,and chemicals make up 95%of industry CCUS usageSources:IEA(2023),Net Zero Roadmap:A Global Pathway to Keep the 1.5C Goal in Reach;Research publications;BCG analysisINDUSTRY35 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVES7.For example,the OGCI-BCG white p

43、aper(2024),“Carbon Capture and Utilization as a Decarbonization Lever”and Navigant(2021),“Carbon Capture,Storage,and Utilisation:Decarbonization Pathways for Singapores Energy and Chemicals Sectors”,commissioned by Singapores National Climate Change Secretariat(NCCS)and Singapores Economic Developme

44、nt Board(EDB)8.Growth in demand for utilization of CO2 and geographical demand-supply mismatch for biogenic CO2 emissions in APAC region (e.g.,pulp and paper industry in Indonesia to supply biogenic CO2 for methanol production in Australia)could create a role for shipping to transport carbon for uti

45、lization9.Estimate from OGCI-BCG white paper(2024),“Carbon Capture and Utilization as a Decarbonization Lever”10.National Petroleum Council(2019),Meeting the Dual Challenge:A Roadmap to At-Scale Deployment of Carbon Capture,Use,and StorageExhibit A3-CCUS involves capturing CO2 from stationary emitte

46、rs and transporting it for permanent sequestration or utilizationPowerIndustrialOil and gasAmmoniaNatural gasprocessingEthanolSequestrationChemicalsEORExample usesCO2 compressionConcentrated CO2 streamsBuildingmaterials Dilute CO2 streamsExample CO2 streamsExample CO2 streamsCO2 captureCO2 sold to i

47、ndustry for utilizationTypically through pipeline,nascent for shippingCO2 transport and intermediate storageEOR:Enhanced oil recoverySource:BCG analysis Exhibit A3 provides an illustrative view of the CCUS value chain.Shipping vs.pipelines within the CCUS ecosystemThe CCUS ecosystem spans the captur

48、e of CO2 at stationary emitters(CC)to either its utilization(U),or its permanent sequestration underground or in saline aquifers(S).A critical component along this value chain is the transportation of CO2 from the capture source to utilization sites or sequestration sinks.The share of CO2 utilizatio

49、n is expected to be small compared to that needed to be sequestered.Several studies7 have determined that the current business and commercial viability of utilization options are limited8,with 10-33%of total CO2 captured projected for utilization by 2050 if economic hurdles can be overcome9.Utilizat

50、ion sites are expected to be close to where CO2 feedstock is available,coupled with the low annual volumes of CO2 projected to be utilized,shipping is unlikely to be the low cost mode of transport for such applications.Instead,we expect captured CO2 designated for utilization pathways to be delivere

51、d to their utilization sites via pipelines.Given the large volumes of CO2 that would need to be captured as CCUS is deployed at scale in the longer term,transport of CO2 by truck and rail is not an economical or scalable option.The cost of CO2 transport by truck and rail ranges from three to ten tim

52、es more per ton than by pipeline transport due to economies of scale10.As such,the main transport methods for CCUS will be pipelines(both onshore and offshore)and shipping.Exhibit A4 illustrates how the optimal choice for transporting captured CO2 depends on the volume of CO2 transported and the dis

53、tance of transport.Offshore,larger volumes transported over shorter distances favor pipelines,whereas smaller volumes of CO2 transported over longer distances favor shipping.The line demarcates a transition between the two modes of transport.For a given transport distance of 500 km,for example,trans

54、porting captured CO2 via offshore pipelines is favored when the amount transported is above 5 MtPA.If the amount is less than 5 MtPA,it is more economical to transport the captured CO2 over this same distance with ships.6 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESOptimal tran

55、sport vector based on annual volumes and distanceExhibit A4-Shipping is more economical at longer distances and lower annual volumes5001,00002040601,500Threshold distance at 500 km for 5 MtPAMtPAkmOffshore pipes1Ships2Note:Assumes discount rate of 8%used1.Assumes compression occurs at capture site/i

56、ntermediate storage site,offshore CAPEX cost 1.5x of onshore pipes,pipeline to have 20-year life span(in-line with ships)2.Inlet feed to liquefaction plant being pre-pressurized(i.e.,compression of CO2 to occur at capture site),onshore storage capacity being 120%of ship capacity,fixed ship speed of

57、15 knots,standard times for loading/unloading and port maneuvering,lifespan of 20 years,low pressure shipping conditions used(5.7 bara to 10 bara,-54.3C to-40.1C)Sources:IEAGHG Technical Report(2020),The Status and Challenges of CO2 Shipping Infrastructures;Element Energy(2018),Shipping CO2 UK Cost

58、Estimation Study:Final Report for Business,Energy&Industrial Strategy Department;Research publications;BCG CCUS cost model;BCG analysisShipping has a higher startup cost than pipelines due to additional costs associated with the need for supporting infrastructure,such as liquefaction plants,conditio

59、ning facilities and intermediate storage tanks for captured CO2 This explains why offshore pipelines are more cost-effective at shorter transport distances for a given amount of CO2 transported.However,as transport distances increases,the marginal CAPEX for shipping is less sensitive to distance com

60、pared to that of pipelines.As a result,shipping becomes more economical over longer distance for a given amount transported.On the other hand,as storage capacities onboard vessels are finite,larger volumes will require additional vessels.As such,offshore pipelines benefit more from economies of scal

61、e for transporting captured CO2 at large annual volumes compared to shipping for a given transport distance.In weighing the offshore CO2 transport options,other considerations that need to be factored in include site-specific technical and operational feasibility and public opinions of pipelines nea

62、r residential clusters.Development of pipelines may be inhibited due to challenging terrains(e.g.,uneven or mountainous terrains)11 and need to obtain necessary land rights and permissions which can be a time-consuming process.Moreover,unlike the modularity of shipping,pipelines lack flexibility,req

63、uiring significant volumes to be locked in at the start to justify pre-investment and offering no alternatives(e.g.,changes in routes),such as during downtime or force majeure events across the value chain.11.In such areas where terrains are challenging,pipelines may need to be re-routed to bypass t

64、he challenging area.Alternatively,the option of shipping(both coastal or cross-border)may be considered,whereby CO2 is shipped and then(if needed)sent to the final point using another pipeline that bypasses the challenging area7 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESChapt

65、er B:Complexities of shipping CO2The CCUS value chain entails multiple processes which begins with the capture of CO2 from stationary emitters,followed by processing at liquefaction plants to yield a state suitable for shipping.The CO2 may be stored temporarily in onshore facilities.The next stage i

66、nvolves loading the CO2 onto ships,and then transported to the sinks or utilization sites.Upon arrival,the unloaded CO2 may again be temporarily stored in onshore facilities.The CO2 then undergoes conditioning to pressurize it into a dense phase12 for permanent sequestration.Finally,the CO2 is seque

67、stered,typically in offshore or onshore oil and gas wells or in saline aquifers,completing the CCUS process.In instances where captured CO2 can be directly injected,port-side intermediary storage would be eliminated from the otherwise similar process.Exhibit B1 illustrates the entire CCUS value chai

68、n.12.Inputs from industry and stakeholder interviews8 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESExhibit B1-End-to-end CCUS value chain view Onshorestorage(Source-side)Liquefac-tionTransportto liquefac-tionCarbon captureOnshorestorage(Sink-side)Condition-ingCarbon seques-trati

69、onShiploadingShippingShip unloadingSequester in on/offshore O&G wells/saline aquifersConvert to dense phaseStore in interme-diate storage to act as bufferUnload from shipTransport from source to sink through shippingLoad from storage(source-side)to shipsStore in interme-diate storage as shipping is

70、a batch processConvert to liquid state for shippingTransport to liquefaction plants usually via pipelineCapture from emittersDescriptionOnshore storage not needed if a direct injection vessel is used where conditioning is onboard ship Sources:Global Centre for Maritime Decarbonisation(2024),Concept

71、Study to Offload Onboard Captured CO2;Al Baroudi,Hisham,et al(2021),“A Review of Large-scale CO2 Shipping and Marine Emissions Management for Carbon Capture,Utilization and Storage”;EU CCUS Projects Network(2019),Briefing on Carbon Dioxide Specifications for Transport;Element Energy(2018),Shipping C

72、O2 UK Cost Estimation Study:Final Report for Business,Energy&Industrial Strategy Department;Aramis Project;Porthos Project;National Petroleum Council;Global CCS institute;Stakeholder interviews;BCG analysis Business and commercial modelsCO2 specifications(purity,pressure and temperature)Vessel infra

73、structurePort and terminal infrastructureExhibit B2-Commercial,technical and governmental aspects need to be addressed to enable cross-border CCUSCommercialEnd-to-end economics(including shipping)All aspects are applicable globallyfor CO2 shipping For this report,we will contextualize shipping route

74、s and specific nuances to APACCoordination required for operational feasibility and optimization and to ensure economics are viable in order to enable cross-border CCUSShipping routesDECCDFDDEApplicable chapters in reportXFinancial incentives and penaltiesRegulations and standardsEEFTechnicalGovernm

75、entalFShipping CO2 encompasses several critical aspects,each requiring close coordination.These aspects are commercial,technical and governmental in nature,and are explored in Exhibit B2.9 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESThe commercial aspects encompass critical ele

76、ments,including the selection of optimal shipping routes,revenue models to de-risk uncertainties(e.g.,long-term contracts and higher fixed-fee components)and partnerships (to share knowledge,spread risks and offer more comprehensive solutions).On the technical front,several considerations must be ad

77、dressed,such as establishing the specifications of the captured CO2,including the types and quantities of allowable impurities,transport and storage pressures and temperatures,all of which are critical to operational reliability and safety during transport.Additionally,vessel and port/terminal infra

78、structure build out and interoperability will be needed to support cross-border CCUS operations.Vessel and port/terminal infrastructure considerations include vessel pressure specifications,and the adequacy of port infrastructure for CO2 loading,offloading,storage and distribution.Participants in th

79、e value chain will need to agree on the threshold of various impurities in the CO2 purity specifications and implement CO2-specific operational and safety protocols.In a hub model where CO2 is aggregated from multiple emitters,CO2 specifications will need to be standardized and compatibility between

80、 parties ensured to allow for seamless aggregation.These technical considerations will impact the total investment required for infrastructure development.To accelerate cross-border CCUS,governments can create financial incentives,impose mandates and penalties,and develop regulations and standards t

81、hat improve CCUS commercial viability.Governments can provide clear guidelines on domestic regulations related to captured CO2 purity specification standards,accounting and verification procedures,project permitting processes,and the allocation of liabilities across the value chain.Shippers also nee

82、d robust intergovernmental governance frameworks to operationalize cross-border CCUS effectively.As the operational complexity of shipping increases,there is a need and thus opportunity to develop and provide reskilling and upskilling programs that can equip workers and seafarers with the necessary

83、knowledge and expertise to participate in this emerging endeavor.Reskilling programs are essential to bridge the gap between existing skills and the new technical requirements.For example,seafarers may need to be trained in new safety protocols and in the handling of specialized equipment and unders

84、tanding the properties of CO2,which can be hazardous if the impurities in the CO2 are not managed properly13.13.GCMD commissioned a Concept study to offload onboard captured CO2 with specific descriptions of the competency requirements for handling CO210 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BO

85、RDER CCUS INITIATIVESChapter C:Key technical considerations for handling CO2Overview of CO2 operating conditions and purity specifications14Understanding the phase behavior of CO allows for optimizing operations at each stage.Exhibit C1 summarizes the states of CO as it progresses through the value

86、chain.14.CO2 purity specifications refer to the CO2 stream requirements with a threshold limit for the presence of impurities (e.g.,non-condensables such as nitrogen and oxygen)11 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESExhibit C1-CO2 is optimally transported and stored in

87、liquefied state for shipping,and sequestrated in dense/supercritical stateSimilar CO2purity specification requirements as pipeline4,6Ship:CO2 99.7%mol%Pipe:CO2 95%mol%5Output matching shipping requirementsCO2:99.7%mol%Output matching shipping require-mentsPipe:CO2 95%mol%Output matching transport to

88、 liquefactionDense phase/Super-criticalDense phase/SupercriticalLiquid CO23Mainly gas1 CO2concen-tration in emitters would affect cost estimates Convertto dense phase for cost-effi-cient pipeline transport Outputto match required shipping conditions Plant to be near onshore storage Storage must with

89、stand shipping conditions Sufficient storage capacity Loading arm catered to shipping conditions Same conditions from liquefac-tion stage Unload to an onshore storage or to sink through a direct injection vessel Storage must withstand shipping conditions Sufficient storage capacity Plant to be near

90、port except for direct injection vessels 1 km deep sinks Quality geologic seal Sufficient permeable rock formation State of CO Opera-tionalconsider-ationsPurifica-tion require-ments1.Majority of capture employed today produces gaseous CO2 apart from cryogenic which produces liquid CO2 2.Most CO2 pip

91、eline systems transport CO2 in the dense/supercritical phase.Gas-phase pipeline transport is suitable for low-throughput and short-distance applications,but this is likely less relevant in CCUS due to the larger throughputs and potentially larger distances between capture plants and ports.In contras

92、t,truck and railway transport are more suitable for very small-scale CO2 throughput3.Low pressure(5.7 bara to 10 bara,-54.3C to-40.1C),medium pressure(14 bara to 19 bara,-30.5C to-21.2C),elevated pressure(35 barato 46 bara,0C to 10C)4.Referenced from EU CCUS Projects Network(2019),Briefing on Carbon

93、 Dioxide Specifications for Transport which has a lower CO2 purity requirement than Northern Lights CO2 purity requirement of 99.81%mol%5.Referenced and triangulated from multiple sources including Aramis(pipeline),Porthos,Project DYNAMIS,etc.6.Inputs from stakeholder interviews Sources:Global Centr

94、e for Maritime Decarbonisation(2024),Concept Study to Offload Onboard Captured CO2;Al Baroudi,Hisham,et al(2021),“A Review of Large-scale CO2 Shipping and Marine Emissions Management for Carbon Capture,Utilization and Storage”;EU CCUS Projects Network(2019),Briefing on Carbon Dioxide Specifications

95、for Transport;Element Energy(2018),Shipping CO2 UK Cost Estimation Study:Final Report for Business,Energy&Industrial Strategy Department;Aramis Project;Porthos Project;National Petroleum Council;Global CCS institute;Stakeholder interviews;BCG analysisOnshorestorage(Source-side)Liquefac-tionTransport

96、to liquefac-tionCarbon captureOnshorestorage(Sink-side)Condition-ingCarbon seques-trationShiploadingShippingShip unloadingDescriptionSequesterin on/offshore O&G wells/saline aquifersConvert to dense phaseStore in interme-diate storage to act as bufferUnload from shipTransport from source to sink thr

97、ough shippingLoad from storage(source-side)to shipsStore in interme-diate storage as shipping is a batch processConvert to liquid state for shippingTransport to liquefaction plants usually via pipelineCapture from emittersTrade-off between cost and operational risk12 OPPORTUNITIES FOR SHIPPING TO EN

98、ABLE CROSS-BORDER CCUS INITIATIVESWhen managing the CCUS value chain,it is essential to consider pressure,temperature,and purity specifications of CO2,as these specifications can have significant implications on cost,operations,and safety.It is therefore important to coordinate and align these speci

99、fications across the different processes as captured CO2 travels across the value chain.Refer to Appendix 1 for more information.In order to ensure interoperability and seamless movement of CO2 along the value chain,it is also important to have clarity on the pressure and temperature conditions and

100、CO2 purity specifications.Clarity and harmonization are required at the project level along the value chain,and between projects when assets are shared across them.Considerations on CO2 pressure and temperature conditionsInfrastructure specifications along the value chain,including the type of vesse

101、l for CO2 transport,will depend on the CO2 pressure and temperature conditions across the value chain.Exhibit C2 compares the trade-offs related to CO2 shipping under varying pressure and temperature conditions.The exhibit highlights how pressure influences the design and operational requirements of

102、 CO2 vessels,including considerations,such as safety,cost,and efficiency.15.For example,dry ice formation could block safety equipment,such as safety valves,stop valves,or pressure gauges,preventing them from operating correctlyCost implicationsOperational and safety implicationsPressure and tempera

103、ture The specifications of infrastructure across CCUS value chain must be tailored according to pressure and temperature conditions.Maintaining these variables in a tight band away from the triple point is critical for averting dry ice formation,which will result in operational disruption and reduce

104、 the reliability of the assets.There are also safety issues related to vessel operations that are affected by the formation of dry ice15.CO2 purity specifications Potential impurities in CO2 necessitates specific purification steps and/or the use of specialized materials to accommodate these impurit

105、ies averting any operational issues(e.g.,dry ice formation,asset reliability issues).Pressure and temperature The pressure and temperature directly specify the state of captured CO2(whether gas,liquid or solid),which directly influences the cost of vessels,intermediate storage,and the processes of l

106、iquefaction and conditioning.These factors determine the type of infrastructure required and the associated capital and operating expenditures(OPEX).CO2 purity specifications The presence of impurities in the CO2 impacts the cost of purification processes which needs to be weighed against the potent

107、ial costs associated with the loss of asset reliability,i.e.,damage or early replacement of equipment.There is a trade-off between investing in purification processes up front to meet required purity specifications and the cost implications of accommodating impurities within the system.13 OPPORTUNIT

108、IES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESLiquefac-tion costs decreases as CO2shipping pressure increases Refrige-rant duty for LP is largest due to lower tempera-ture but compress-ion duty is lowest due to lower CO2shipping pressureCondi-tioning costs decreases as CO2shipping pressure

109、 increases Less compress-ion and heating required at higher CO2shipping pressureExhibit C2-Trade-offs for CO2 shipping pressure and temperature1.If CO2 is liquified after capture(e.g.,eliminating need to convert to supercritical CO2 for pipe transport),shipping pressure becomes pertinent as higher p

110、ressure will lead to increased compression costs 2.Referenced from company presentations by KNCC and Clarksons/CCSA Report on Updated Costs for CO2 Ship Transport(2024)Sources:Expert interviews;BCG analysis Specific CAPEX of vessels and storage increases with pressure even aer factoring in different

111、 material usage for LP tanks(for LP and MP)Cost of shipping and intermediate storage is lowest when CO2pressure is lowest(for LP and MP)Data from third-party sources indicate a wide range for EP vessels CAPEX costs,ranging from 13%less than LP vessels CAPEX to 28%more than LP vessel CAPEX2 Size for

112、MP vessels(typically 10-35 kt)likely smaller as compared to LP/EP vessels2 Shipping at a lower pressure has a higher risk of dry ice formation Boil-off gas management most needed at lower CO2 shipping pressure and the need is reduced as CO2 shipping pressure increasesNo direct cost and operational i

113、mplications for sink side Cost implica-tions Opera-tional implica-tions Onshorestorage(Source-side)Liquefac-tionTransportto liquefac-tionCarbon captureOnshorestorage(Sink-side)Condition-ingCarbon seques-trationShiploadingShippingShip unloadingCO2 pressure and temperatureCO2 pressure and temperatureN

114、o direct cost and operational implications for capture side Exhibit C3 compares Low Pressure(LP)(which has vessel conditions range of 5.7 bara to 10 bara,and-54.3C to-40.1C),Medium Pressure(MP)(which has vessel conditions range of 14 bara to 19 bara,-30.5C to-21.2C),and Elevated Pressure(EP)(which h

115、as vessel storage conditions range of 35 bara to 46 bara,0C to 10C)vessels,which have different costs and operational considerations and implications.14 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESExhibit C3-Comparison between LP,MP and EP vessels from a cost and operational vi

116、ew 1.KNCC GCCSI Seminar(2024)2.Clarksons/CCSA Report on Updated Costs for CO2 Ship Transport(2024)3.Global Centre for Maritime Decarbonisation(2024),Concept Study to Offload Onboard Captured CO2”4.Assumptions for the assessment include pure CO2 with no impurities,a surrounding temperature of 45C,sti

117、ll air(no wind),and specific heat loss parameters;for more information,refer to the Global Centre for Maritime Decarbonisation(2024),Concept Study to Offload Onboard Captured CO2”5.Considering a 45%safety factor,the time taken for LP tanks to reach PRV set pressure ranges from 18 to 38 days,whereas

118、MP tanks require over 41 days6.KNCC presentation,“Introduction of Three Modes of Handling LCO2,”indicates that data from the test rig show heat ingress is small and that the CO2 inside the test rig has remained stable with no actions to the rig for months7.Inputs from industry and stakeholder interv

119、iews8.Range exist due to the operating ranges of the different pressure modes;inputs from industry and stakeholder interviews,and literature reviewSources:Global Centre for Maritime Decarbonisation(2024),Concept Study to Offload Onboard Captured CO2;Element Energy(2018),Shipping CO2 UK Cost Estimati

120、on Study:Final Report for Business,Energy&Industrial Strategy Department;Company presentations from KNCC;BCG analysisEP vesselsMP vesselsLP vesselsLP value chain likely has lower aggregated cost vs MP due to lower costs from shipping and onshore storageMP value chain likely has higher aggregated cos

121、t vs LP even with savings from liquefaction,onboard liquefaction and conditioningData from third party sources indicate a wide range for EP vessel CAPEX,ranging from 13%less1 than LP vessel CAPEX to 28%more2 than LP vessel CAPEXClosest to triple pointFurther from triple pointFurthest from triple poi

122、nt BOG generation is driven by four key factors3:1)temperature difference between CO2 carried and surrounding environment,2)thermal resistivity and thickness of insulation,3)CO2 level in the tank,and 4)capacity of storage tank Considering the four key factors,LP vessels typically have a greater need

123、 for BOG management tools such as reliquefaction plants4;however,for voyages shorter than the safety limit5,6,this need is significantly reducedLP vessel tends to have higher capacity vs MP vessel1.12 to 1.17 t/m1.03 to 1.08 t/m0.86 to 0.93 t/mMP vessel capacity smaller(typically 10-35 kt7);difficul

124、t to build large capacity vessels as multiple small tanks required Specific third party analysis suggests that EP vessels can exceed 20 kt1Costs Risk of dry ice formationBoil-off gas(BOG)managementDensity of CO2 carried8Vessel capacity When considering the operational implications of different press

125、ure conditions for CO2 shipping,each type of vessel has its own set of advantages and disadvantages.15 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESWhen considering the cost implications across different pressure conditions for CO2 shipping,each pressure condition offers distinc

126、t advantages and trade-offs:LP vessels LP shipping can achieve cost savings due to the scale benefits associated with LP vessels having a larger CO2 carrying capacity.Additionally,the tank walls in LP vessels are thinner and less costly to manufacture compared to MP vessels,which reduces overall con

127、struction costs.While additional expenses arise a need for an onboard re-liquefaction system,these are outweighed by the savings from less expensive tanks and the scale benefits of LP vessels.As a result,the LP value chain is likely to have the lowest aggregated cost compared to one that relies on M

128、P shipping.This makes LP shipping an economically attractive option,particularly when large volumes of CO2 need to be transported.16.Global Centre for Maritime Decarbonisation(2024),Concept Study to Offload Onboard Captured CO217.Considering a 45%safety factor,the time taken for LP tanks to reach PR

129、V set pressure ranges from 18 to 38 days,whereas MP tanks require over 41 days18.KNCC presentation“Introduction of Three Modes of handling LCO2”indicates that data from test rig shows heat ingress is very small and that CO2 inside the test rig has been stable with no actions to the test rig for mont

130、hs19.Zevenhoven,Cornelis A P et al(2020),“Controlling Evaporation of Liquid CO2 During Transport as Part of CCSRisk of dry ice formationBoil-off gas managementConsidering the four key factors below,LP vessels typically have a greater need for BOG management tools such as reliquefaction plants16;howe

131、ver,for voyages shorter than the safety limit17,18,this need is significantly reduced.The four key factors include:Temperature difference between CO2 carried and surrounding environment A smaller temperature difference results in reduced heat ingress19 and,consequently,lower BOG generation.Thermal r

132、esistivity and thickness of insulation A larger thermal resistivity results in reduced heat ingress,and,consequently,lower BOG generation.A thicker insulation results in reduced heat ingress,and,consequently,lower BOG generation.Hence,there exist a trade-off between material cost(e.g.,increased thic

133、kness of insulation)and resulting reduction of boil-off.CO2 level in the tank High filling level of CO2 in the tank leads to a lower evaporation rate of the liquid and,consequently,lower BOG generation.Capacity of storage tank Assuming same absolute filling amount,smaller tanks exhibit lower rate of

134、 pressure build up due to BOG within the vessel.LP vessels These vessels operate closest to the triple point,creating additional complexity to their operation.MP and EP vessels The risk of dry ice formation is much lower than LP vessels as they operate further away from the triple point,making them

135、more stable in terms of CO2 state management.16 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESMP vessels MP vessels typically range in size from 10 to 35 kt20,smaller compared to the carrying capacity of LP vessels(which has carrier designs that can go up to 74 kt21),as MP tanks

136、require thicker walls due to higher operating pressures.This increases the complexity and cost of building MP vessels which makes MP vessels less cost-effective on a per-unit basis compared to LP vessels.EP vessels EP vessel CAPEX range widely from 13%less than LP22 to 28%more than LP23 because of i

137、ts technological nascency.Exhibit C4 compares the unit cost between the LP and MP value chain.20.Inputs from industry and stakeholder interviews21.Based on press releases from various companies 22.KNCC GCCSI Seminar(2024)23.Clarksons/CCSA Report on Updated Costs for CO2 Ship Transport(2024)Exhibit C

138、4-Across the entire value chain,LP likely to have a lower aggregated cost than MPNote:Boundary of value chain starts from liquefaction and ends at conditioning;8%discount rate used,inlet feed to liquefaction being pre-pressurized(i.e.,compression of CO2 to occur at capture),onshore storage capacity

139、being 120%ship capacity,speed of 15 knots,standard times for loading/unloading and port maneuvering,low pressure(5.7 bara to 10 bara,-54.3C to-40.1C),medium pressure(14 bara to 19 bara,-30.5C to-21.2C)1.Includes loading and unloading arms 2.Includes onboard liquefaction for LP shipsSources:Simon Rou

140、ssanaly(2021),At What Pressure Shall CO2 Be Transported by Ship?An In-depth Cost Comparison of 7 and 15 Barg Shipping;IEAGHG Technical Report(2020),The Status and Challenges of CO2 Shipping Infrastructures;Element Energy(2018),Shipping CO2 UK Cost Estimation Study:Final Report for Business,Energy&In

141、dustrial Strategy Department;BCG CCUS cost model;BCG analysisUnit cost by distance(USD/tCO2)Unit cost by annual volume(USD/tCO2)Unit cost by different shipping pressures(USD/tCO2)Fixed distance of 4,750 km at 2 MtPA with a 20-year lifespan Low PressureMedium Pressure1%4%61-7542-51Supporting infrastr

142、ucture1Onshore storageShipping2ConditioningLiquefaction1%2%8%8%81%Illustrated with fixed annual volume of 1 MtPA with a 20-year lifespanIllustrated with fixed distance at 1,000 km with a 20-year lifespanLow Pressure1,000 km4,750 km6,700 km1 MtPA2 MtPA5 MtPA30-3634-4230-3635-4223-2830-3724-3020-2549-

143、6173-9065-8093-114Medium Pressure62%18%15%17 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESConsiderations on CO2 purity specificationsToday,CO2 purity specifications cover both purity level and impurity limits in CO2 streams.Due to the potential complications and issues of impuri

144、ties,it is important to set threshold limit of their presence in CO2 streams.The CO2 purity specifications for vessel transportation are generally more stringent than those for pipelines and sink sites.For example,CO2 transported via vessels typically needs to meet a purity level of around 99.7%24,b

145、ased on publicly reported CO2 purity specifications from various CCUS projects compared to 95%for pipeline transport.Exhibit C5 compares the different CO2 purity requirements for shipping versus pipeline transport,as well as the purity standards for industrial,food,and beverage grade CO2.The stricte

146、r CO2 purity level in shipping compared to pipeline is mainly driven by the tighter limits on non-condensables,as these non-condensables can alter the thermodynamic properties of CO2,increasing the risk of dry ice formation.This risk is higher in shipping because storage conditions on vessels are cl

147、ose to the triple point,whereas pipelines,mainly transport CO2 in the dense phase25 which is further from the triple point.Refer to Appendix 1 for more information.Exhibit C5-CO2 purity specs for vessels typically more stringent than pipelines and sinks,mainly due to increased dry ice risk associate

148、d with non-condensablesProject DYNAMIS 2Aramis(ships)EU recommen-dation1Northern LightsFood gradeBeverage gradeAramis(pipeline)PorthosIndustrial grade 0.2 mol%(sum of all non-condensable)4 vol%(sum of all non-condensable)4 mol%(sum of all non-condensable)4 mol%(sum of all non-condensable)Specificati

149、ons applies throughout Northern Light value chain including shipping,terminal storage,and sequestration 0.3%by vol(sum of all non-condensable)NL provide specific limit for each non-condensable 99.79 95.50 95.00 95.00 99.70 99.8101%purity requirement4of CO2Shipping CO2 specificationsPipeline CO2 spec

150、ificationsCompressed Gas Association(liquid CO2)02%non-condensable(e.g.,CH4,N2)99.90 99.50 99.00Notes:Not showing the full list of specifications for the different projects 1.Based on ZEP/CCSA(2022),Network Technology Guidance for CO2 Transport by Ship report2.Co-funded by European Commission3.Back-

151、calculated as balance of remaining stream4.Measured based on mol or vol basis as determined by the relevant bodiesSources:Northern Lights Webinar(2024),CO2 Specification for the Northern Lights Value Chain;Ahmad Amirhilmi A.Razak et al(2023),Physical and Chemical Effect of Impurities in Carbon Captu

152、re,Utilisation and Storage;ZEP/CCSA(2022),Network Technology Guidance for CO2 Transport by Ship;Richard T.J Porter et al(2015),The Range and Level of Impurities in CO2 Streams from Different Carbon Capture Sources;Aspelund,A(2010),Gas Purification,Compression and Liquefaction Processes and Technolog

153、y for Carbon Dioxide(CO2)Transport;Aramis Project;Porthos Project;BCG analysis24.Referencing Northern Lights,EU recommendations(ZEP/CCSA(2022)Report on Network Technology Guidance for CO2 transport by ship),and Aramis CCUS project25.National Petroleum Council(2019),Meeting the Dual Challenge:A Roadm

154、ap to At-Scale Deployment of Carbon Capture,Use,and Storage18 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESBox 1 Key advantages on emitters meeting CO2 purity specificationsEmitters have the most comprehensive understanding of their own emissions specifications,including the typ

155、es and amounts of impurities present in CO2.This visibility allows them to more accurately and efficiently manage the purification process,ensuring that the CO2 meets the required purity specifications before it enters the transport and sequestration phases.Greater visibility on emissions specificat

156、ions1.Purifying CO2 at a terminal,especially when receiving CO2 from multiple emitters with varying impurities and impurity levels,poses significant operational and asset reliability challenges.Each emitters CO2 stream might require different purification processes,which will add to the complexity o

157、f terminal operations and increase costs(e.g.,additional storage tanks for segregation of different CO2 streams).By handling purification at the source,these complexities can be mitigated,leading to a smoother and more efficient operation at the terminal stage.Reduces complexities and operational ch

158、allenges at terminals3.Purification is required before any transportation,regardless of pipelines or shipping.By purifying CO2 near the point of capture,emitters can ensure that the CO2 entering the transport and storage stages meet the required purity specifications from the very beginning,reducing

159、 the need for additional purification steps downstream.Allows for reduced number of CO2 purification steps2.26.Over 1 MtPA annual volume for shipping economies of scale(elaborated in Chapter D)In the context of APAC,where the industrial landscape is characterized by sizeable emitters26,the necessity

160、 for an open-source model with stringent CO2 purity specifications,like that used in Northern Lights,may be less critical due to reduced need for aggregation among smaller emitters.This opens the possibility for relaxing impurity thresholds,tailored to the regions specific needs.Context-specific CO2

161、 purity specifications rules also allow for bilateral agreements between individual CO2 sources and sinks,where large emitters can individually fulfil the necessary contractual volume requirements without aggregation.Bilateral agreements can streamline the CCUS process by allowing each vessel to foc

162、us on CO2 from a single emitter category or profile.With this predictability,impurity thresholds can be relaxed because of a reduced likelihood of cross-reactions between impurities that can accelerate corrosion without compromising the integrity of the CCUS process.The CO2 purity specifications use

163、d by Northern Lights can serve as a valuable starting point for developing CO2 purity specifications in Asia.These purity specifications can be refined to align with the specific needs of the matching source hubs and sink sites,such as focusing on emissions from a particular industry.This approach c

164、an ensure that the CO2 purity specifications are practical and cost-effective for the large-scale emitters common in Asia.Several CCUS projects in Europe(See Appendix 1)have adopted an approach to assign the responsibility for meeting CO2 purity specifications to the emitter.This approach could opti

165、mize overall costs and streamline operations within the CCUS value chain,but it comes at the expense of increasing capture costs for the emitters.19 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESChapter D:Opportunities in APACEmergence of APAC as one of two global ecosystems for

166、cross-border CCUSCCUS remains a nascent carbon abatement solution,with CCUS primarily implemented within national borders,relying heavily on pipelines for the transport of CO2.As CCUS scales up,various geographies are developing cross-border shipping models to bridge the gap between areas of carbon

167、capture and those with abundant sequestration capacity.As illustrated in Exhibit D1,two ecosystems for cross-border CCUS are emerging.Within the ecosystems,cross-border CO2 shipping is favorable over pipelines when the transport distance is more than 500 km for an annual CO2 volume of 5 MtPA27.In Eu

168、rope,the Northern Lights project has completed its development of the CO2 receiving and sequestration facilities in Norway and is expected to receive its first CO2 injection in 2025,with plans to extend receiving CO2 from emitters based in Netherlands later that same year.Meanwhile,within the APAC r

169、egion,multiple bilateral agreements are being negotiated by governments and private sector entities to establish cross-border CCUS routes.27.Refer to Exhibit A4 in Chapter A for more information20 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESExhibit D1-CCUS has been domestic via

170、 pipelines,and cross-border CO2 shipping ecosystems have started to emergeNorthwesternEuropeecosystem ABAPAC ecosystemEarly DevelopmentAdvanced DevelopmentIn ConstructionOperationalCommercial CCUS facilities1Cross-border CCUS operationsEmerging cross-border CCUS shipping ecosystemsGlobal view of eme

171、rging cross-border CCUS ecosystems1.Facilities that are designed to capture,transport,utilize,sequester CO2,or any combination thereofNote:Early Development refers to the facility completing or having completed a prefeasibility or feasibility study.Advanced Development refers to the facility complet

172、ing or having completed a Front-End Engineering and Design(FEED).For storage sites,the proponent is completing a submission or has submitted a field development plan or equivalent to regulators.In Construction refers to facilities where a positive Final Investment Decision(FID)has been reached.Opera

173、tional refers to facilities where CO2 is actively captured,transported,utilized,sequestered,or any combination thereofSources:Global CCS Institute(2024),Global Status of CCS 2024:Collaborating for a Net-Zero Future;BCG AnalysisIn contrast,transporting CO2 via shipping is less relevant for the US and

174、 Canada,where pipelines will remain the preferred option.Not only are domestic CO2 sink locations available,government incentives encourage domestic CCUS project development.Currently,the only CO2 capture and sequestration project that involves shipping in North America is the Tampa Regional Intermo

175、dal Carbon Hub,where its feasibility of transporting captured CO2 from industrial emitters across the State of Florida to northern Gulf of Mexico is being studied.21 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESCCUS landscape and challenges within APACAs shown in Exhibit D2,ther

176、e are two unique characteristics of APAC that increase the need for CCUS in the region.Firstly,APAC(83%)has a higher share of stationary emissions as compared to the rest of the world(53%).These increase the potential of CCUS given that it is only applicable for stationary emissions.Secondly,the ave

177、rage age of fossil fuel-based power plants in APAC(17 years)is younger than the rest of the world(25 years).This makes shutting them down more challenging in APAC,as it would financially strand these assets prematurely.Exhibit D2-The higher proportion of stationary emissions and younger power plants

178、 in APAC increases the relevance and potential of CCUS in APAC1.Includes electricity and heat production,manufacturing industries and construction,and other energy industry own use.Does not include emissions from residential and commercial and public services2.Includes coal,gas,and oil power plants3

179、.Refers to fuel combustion emissions from subsectors such as iron and steel;chemical and petrochemical;non-ferrous metals;non-metallic minerals;transport equipment;machinery;food and tobacco;paper,pulp and printing;wood and wood products;and textile and leather4.Includes emissions from own use in pe

180、troleum refining,the manufacture of solid fuels,coal mining,oil and gas extraction and other energy-producing industriesSources:Greenhouse Gas Emissions from Energy(IEA);UDI S&P Global Market Intelligence;BCG analysisCCUS potential is high in APAC due to its higher share of stationary emissions1 fro

181、m fuel combustion than the rest of world(83%vs 53%)The younger age of power plants in APAC makes shutting them down challenging,as it would prematurely strand them financiallyBreakdown of emissions from fuel combustion(%,GtCO2e)Age distribution(years)of fossil fuel-based power plants2APACRest of wor

182、ldAPACRest of world55%(9.5)24%(4.1)4%(0.6)5%(0.8)12%(2.1)34%(5.5)13%(2.1)36%(5.8)12%(1.9)6%(1.0)25%40%17%7%6%17%31%23%9%9%8%3%1%4%Average ageAverage distribution1725Electricity and heat production 1011-2021-3031-4041-5051-6060+Manufacturing industries and construction3Residential,commercial,and publ

183、ic servicesTransportOther energy industry own use4Stationary emissions122 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESJapan,South Korea,and Singapore have set ambitious net zero goals.However,there is likely to be continued use of carbon-based fuels due to the presence of hard-

184、to-abate sectors(e.g.,cement,steel,chemicals)and the need for reliable 24/7 power.As such,cross-border CCUS will play a crucial role in their decarbonization strategies,as it is essential for eliminating emissions from carbon-based fuels.Given this context,CCUS will likely be essential for coal and

185、gas power plants,iron and steel plants,and cement plantssectors that face limited cost-effective alternatives for reducing emissions and account for a substantial share of stationary emissions.Exhibit D3 demonstrates the potential role that CCUS can play in key sectors and sub-sectors to enable the

186、APAC region to reach net zero.To achieve ambitious CCUS targets,it is essential to establish connections between major emitters and regions with abundant sequestration capacity.In Asia these connections,especially within Northeast Asia(NEA),Southeast Asia(SEA),and parts of Oceania which have signifi

187、cant water bodies will require bridging solutions.Exhibit D4 highlights the mismatch between the expected contribution of CCUS and the available CO2 sequestration capacity across various geographies in APAC.Japan,South Korea,and Singapore will likely face challenges due to limited domestic sequestra

188、tion options.These entities would need to transport CO2 to sequestration sites in other locations,such as Indonesia,Malaysia,and Australia.Other fuel transformation1Bioenergy3CCUS contribution by sector(APAC region,MtCO2)CCUS contribution by industry sub-sectors(APAC region,MtCO2)Exhibit D3-CCUS is

189、key to decarbonize fossil fuels-related industries,heavy industries and to transform grey energy to blue energyHydrogen and ammonia2Fossil fuel power generation Industry 4+16%+36%71,509416688364192,99723455628758332011216611713531,673 1,5093556203020402050Cement and limePetrochemicals Iron and steel

190、 Aluminium2030204020501.Other fuel transformation mainly covers sectors such as petroleum refining and natural gas processing 2.Including hydrogen-based fuels such as ammonia 3.Includes bioenergy and biofuels transformation 4.Includes cement,lime,petrochemicals,iron and steel and aluminum Sources:IE

191、A(2023),Net Zero Roadmap:A Global Pathway to Keep the 1.5C Goal in Reach;Research publications;BCG analysis7812435196326727123 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESAPACs emerging CCUS landscape Enabling the CCUS value chain is key to realizing the decarbonization ambitio

192、ns of many governments and companies across the APAC region.Numerous partnerships and collaborations have been announced,with several Memoranda of Understanding(MoUs)signed to advance cross-border CCUS initiatives.CCUS deployment will need to accelerate significantly in APAC,approximately 26%annuall

193、y,up from the current planned capacity of 8 MtPA to achieve 2050 net zero targets.Many of the existing CCUS projects in APAC have largely focused on enhanced oil and gas recovery(EOR/EGR),though the largest CCUS project in APAC the Gorgon CCS project in Australia was developed for dedicated CO2 sequ

194、estration28.Exhibit D5 illustrates the potential growth trajectory for CCUS in the APAC region,showing its pivotal role in decarbonization.Exhibit D4-Mismatch between potential CCUS contribution emission volume and sequestration capacity across APAC region Potential net CO2exporterPotential net CO2i

195、mporter3 JapanSouthKorea SingaporeMalaysiaAustraliaIndonesiaBrunei4.2Limitedfeasibility7.7Limitedcapacity1.1No known capacity18.18k-16.9k7.34.9k-5.3k0.2224-1.1k-443-9394.61.5k-2.5k331-535664-728CCUS contribution to NZE1(2030,MtPA)Assessed DOGF sink capacity2(2023,MtCO2)Equivalent years of sink3(dome

196、stic,at 2030 CCUS contribution to NZE)1.Excluding direct air capture2.Assessed current capacity based on latest published sources,which will increase as more fields near depletion are technically evaluated3.Assessed sink capacity over potential 2030 CCUS contribution to net zero target by country So

197、urces:IEA;BCG CCUS Global Deployment Scenarios;OGCI;Lau,H.C.(2023),“Decarbonization of ASEANs Power Sector:A Holistic Approach”;BCG CCUS Hub Tool;Press search;BCG analysis28.IEA(2024),“CCUS Projects Database”24 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESIn the right regulatory

198、 environment CCUS capacity in the APAC region could expand to as much as 3,000 MtPA by 2050,with Mainland China alone contributing approximately 1,850 MtPA.This growth would mark a substantial increase in the regions capacity to capture and sequester CO2 positioning CCUS as a key element in the stra

199、tegy to combat climate change and achieve long-term sustainability goals in APAC.Seven markets in Asia have indicated their willingness to participate in cross-border CCUS initiatives,setting export targets and import limits.Exhibit D6 provides a comprehensive overview of these markets CO2 emissions

200、,the potential contribution of CCUS to achieving NZE by 2030 and 2050,and their prospective roles in the cross-border CCUS value chain.CCUS Deployment to achieve NZE by 2050 Scenario1 by market Exhibit D5-To achieve 2050 NZE Scenario in APAC,CCUS deployment must grow to 3,000 MtCO22024(Current)20302

201、0402050(MtCO2,Current:2024,Targets:2030-2050)2NZE LevelsASEANTaiwanSouth KoreaAustralia and New ZealandJapanIndiaMainland China3+26%1,6732,99716681531798134202111556100862141,1024981,8511.The NZE by 2050 Scenario is a normative scenario that shows a pathway for the global energy sector to achieve ne

202、t zero CO2 emissions by 2050,limiting the global temperature rise to 1.5C(with at least a 50%probability)2.Excluding direct air capture 3.Includes Hong Kong SARSources:IEA;BCG CCUS Global Deployment Scenarios;BCG analysis11548174341825 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIV

203、ESIndonesiaSingaporeSouthKoreaJapanMainlandChina4IndiaVietnamAustraliaMalaysiaBruneiTaiwanThailandPhilippinesGeographiesStationary emissions1(2022,MtCO2e)6734.2180CO2 importerUnknown/Unlikely to participate801058146371.71,8504985235337.27.71.17.318.14.60.21153.5004.20393404752451807.89,1581,99622822

204、015992CCUS contribution to NZE2,3(MtPA)Ambition in cross-border CCUS value chain20302050Primary focus for LCO2 shippingCO2 exporter Exhibit D6-Seven markets have shown signals to participate in cross-border CCUS in APAC 1.Based on IEAs CO2 emission data for electricity and heat producers,industry an

205、d other energy industries such as refineries 2.Net Zero Targets are based on BCG CCUS Global Deployment Scenarios,and allocated to countries proportional their stationary emission levels,CCUS status and Net Zero Target years 3.Excluding direct air capture 4.Includes Hong Kong SARSources:IEA;Various

206、ministries publications;Press release;BCG analysisThe rest of this report focuses on APAC markets that have indicated interest for cross-border CCUS.APAC markets that have not indicated CCUS in its decarbonization strategy will not be discussed in this report,except for the following bulleted highli

207、ghts,which we have left in the report for completeness:Mainland China:Currently focused on domestic CCUS projects,with no announced plans for cross-border initiatives.India:While developing a strategy to adopt CCUS technology,there are no clear plans for engaging in cross-border CCUS projects.Vietna

208、m:Aiming to start building CCUS infrastructure only by 2040,which places it on a longer timeline compared to others in this region.Taiwan:Targeting a significant scale-up of CCUS efforts by 2050,indicating a delayed focus on this decarbonization lever and potentially shipping.Thailand:There are no a

209、nnounced plans for CCUS beyond domestic projects.Philippines:No CCUS projects or plans have been announced.Of markets that will likely be major players of cross-border CCUS in APAC,Japan,South Korea and Singapore are likely net exporters of CO2.Japan faces challenges with domestic CO2 sequestration

210、due to limited DOGF.The use of saline aquifers is being explored;this option requires extensive feasibility assessment given Japans high seismic risk,which complicates the safe sequestration of CO2.Perception of such risks can trigger potential political and public opposition.Japan,a major maritime

211、nation i.e.,shipbuilding and shipping,is,positioning itself at the forefront of this emerging industry.Developing LCO2 carriers for cross-border CCUS allows Japan to leverage its strong shipping sector to address the challenges of decarbonizing their hard-to-abate sectors while enhancing a key econo

212、mic pillar.By 2030,Japan plans to sequester 30%of its expected captured CO2 volume internationally,reflecting its strategic reliance on cross-border CO2 management.26 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVES South Korea has limited domestic sink options (although research i

213、s underway to explore and identify potential local sink sites29)in DOGFs and faces high operational uncertainty with the use of saline aquifers.However,South Korea has a lower seismic risk compared to Japan,which reduces these concerns.As a major shipbuilding and shipping nation,South Korea shares J

214、apans perceived advantage to leverage and grow existing capabilities to also address the challenges of decarbonizing their hard-to-abate sector and participate in the CCUS value chain.South Korea has already taken steps by signing bilateral agreements with Malaysia and Australia to facilitate cross-

215、border CO2 transport and sequestration.Singapore does not have local sink capacities in either DOGFs or saline aquifers,making it entirely reliant on exporting CO2 for sequestration elsewhere.And with captured CO2 utilization currently too nascent and expensive to be economically viable,it will need

216、 to export CO2 for sequestration.Malaysia,Indonesia,Brunei,and Australia may become net importers of CO2,driven by their substantial sequestration capacities and strategic initiatives to develop CCUS infrastructure.Malaysia has 1,50030-2,47531 million tons of CO2(MtCO2)sink capacity in DOGF,and aims

217、 to establish three CCUS hubs by 2030 with a combined capacity of up to 15 MtPA.Malaysia has also signed a bilateral agreement with Japan to collaborate on cross-border CCUS,highlighting its ambition in leading CO2 management in the region.Malaysia also requires CO2 sink infrastructure to decarboniz

218、e its own sizable natural gas fields,where CO2 is captured during natural gas processing.Indonesia boasts large sink capacities,with 4,90032-5,30033 MtCO2 sink capacity in DOGF.Up to 30%of its sink capacity can be reserved for CO2 imports in CCUS projects.It also needs CO2 sequestration infrastructu

219、re to decarbonize its natural gas production and processing industry.Indonesia has signed a bilateral agreement with Singapore to collaborate on cross-border CCUS initiatives.Australia has amended local laws to permit CO2 imports,facilitating its role as a CO2 importer.The country has significant se

220、questration capacity,with 8,00034-16,90035 MtCO2 in DOGF.It has signed bilateral agreements with Japan and South Korea,strengthening its position in cross-border CCUS collaborations.Brunei has modest sink capacity compared to its neighbors,with 22436 MtCO2 sink capacity in DOGF but has a fairly low

221、emissions profile(national-level emissions of 12 MtCO2e in 2021;shippings global emissions footprint was approximately 800 MtCO2e in 202137 for comparison).As a result,with local demand for CCUS likely to be small,there are opportunities for Brunei to provide CO2 sequestration capacity.It has signal

222、ed its interest in importing CO2,exemplified by an MoU with Shell Singapore to explore cross-border CCUS efforts.29.Korea National Oil Corporation(KNOC)is participating in a national initiative to explore and identify potential CO2 storage sites within domestic waters around the Korean peninsula30.L

223、au,H.C.(2023),“Decarbonization of ASEANs Power Sector:A Holistic Approach”.Energy Reports,9,676702 31.BCG Global CCUS Hubs Model 32.Indonesia Business Post(2024),“Indonesias Carbon Storage Potential Exceeds 500 Gigatons”33.Lau,H.C.(2023),“Decarbonization of ASEANs Power Sector:A Holistic Approach”.E

224、nergy Reports,9,676702 34.BCG Global CCUS Hubs Model35.Carbon Storage Taskforce(2009),“National Carbon Mapping and Infrastructure Plan Australia:Full Report”,Department of Resources,Energy and Tourism,Canberra36.BCG Global CCUS Hubs Model37.Estimate by Simpson Spence&Young27 OPPORTUNITIES FOR SHIPPI

225、NG TO ENABLE CROSS-BORDER CCUS INITIATIVESExhibit D7 below shows a summary view of the relevant APAC markets.CCUS hubs and routes within APACA four-step approach was taken to identify potential APAC CCUS hubs and cross-border routes looking towards 2050.Exhibit D8 shows a concise overview of the met

226、hodology to determine which geographies and routes hold the most potential for successful CCUS deployment and cross-border collaboration in APAC.By analyzing factors,such as existing infrastructure,emission levels,sequestration capacity,and appetite for regional cooperation,this report focuses on th

227、e most viable hubs and routes that can drive significant progress toward the regions decarbonization goals.Exhibit D7-Shipping is key to effectively match source and sinks in APAC 3 key reasons for importing CO2BA4 key reasons for exporting CO211224Ambition to be CO2 sink hubs to support growth of g

228、reen economy IDNMYS3 considerations for shipping in cross-border CO2 transportation CShipping is preferred over pipeline when:Transporting CO2 over longer distances(shipping CAPEX and OPEX is less sensitive to distance vs.that of pipeline)Transporting at lower annual volumes(e.g.,at 500 km,shipping

229、is more economical if 5 MtPA)Long-term routes are uncertain (i.e.,ships allow flexibility in sink sites)Limited feasible DOGF for CO2 sinkJPNKORSGPHigh cost and uncertainty involved in studying domestic saline aquifers JPNKOR333Ambition to lead in LCO2shippingJPNKORPerceived risks of sequestering CO

230、2in regions with high seismic activities1 JPNKORLarge DOGF and saline aquifer capacityAlready developing CCUS for domesticupstream activitiesRelevant geographies12Sources and sinks in APAC1.For example,political risks arising from the population believing that CO2 sequestration can lead to seismic a

231、ctivitiesSources:Japan Ministry of Economy,Trade and Industry;South Korea Solutions for Our Climate;Malaysia National Energy Transition Roadmap;Element Energy(2018),Shipping CO2 UK Cost Estimation Study:Final Report for Business,Energy&Industrial Strategy Department;BCG analysisIDNMYSBRNAUSIDNMYSAUS

232、28 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESExhibit D8-Four-step approach to identify potential APAC CCUS hubs and cross-border routes looking forward to 2050 Benchmark CO2 exporting countries CCUS deployment scenarioUnderstand planned NZE 2050 pathway for each exporting cou

233、ntry to identify key industries that are expected to deploy CCUS Prioritize and cluster emitters into potential CCUS hubs Identify emitters1 that are most eligible for CCUS and cluster eligible emitters that are within proximity of each other to form potential CCUS hubs as well as identify nearby se

234、aportsResearch and identify APAC 2030 cross-border CCUS landscape Research announced cross-border CCUS projects and analyze plausible route details for each project to define APAC 2030 CCUS cross-border landscape;investments are quantified for each project Postulate 2050 CCUS cross-border landscape

235、Postulate APAC 2050 CCUS cross-border landscape by incorporating NZE and government targets into currentavailable information 1.At least 10 emitters per target industry per geography(if not all)are included to ensure sufficient optionality for analysis in the rapidly evolving landscape Source:BCG an

236、alysisEight CCUS hubs38 and one large standalone emitter in Japan,five hubs in South Korea,and one hub in Singapore were shortlisted as key locations for potential evaluation(see Appendix 2 for further details):Japan:The largest CCUS hub is expected to be in Chiba,with a potential annual capture vol

237、ume of approximately 140 MtPA.The emissions at this hub will primarily come from gas power generation (79 MtPA)and the iron and steel sectors(40 MtPA).The standalone emitter is expected to be in Shimane,with a potential annual volume of 5 MtPA primarily from coal power generation.South Korea:The two

238、 dominant CCUS hubs are likely to be in Daesan,with a potential annual capture volume of 168 MtPA,and Gwangyang,with 97 MtPA.These hubs will largely capture emissions from coal power generation(combined total of 197 MtPA)and the iron and steel sectors(combined total of 54 MtPA),with the remaining co

239、ming from the hydrogen and gas power generation industries.Singapore:One potential CCUS hub has been identified,with a potential annual capture volume of 18 MtPA.The emissions mainly originate from the chemicals and petroleum refining industries.Based on publicly announced MOUs,thirteen potential cr

240、oss-border CCUS routes with the potential to become operational by 2030 have been identified.These routes include:Routes between NEA and SEA:These include Japan-Malaysia,Japan-Indonesia,South Korea-Malaysia.Routes between Northeast Asia and Australia:Connecting Japan and South Korea with Australia.I

241、ntra-Southeast Asia Routes:Such as Singapore-Malaysia and Singapore-Indonesia.Overall,seven source hubs and nine sink regions could be developed by 2030,based on publicly announced cross-border CCUS projects in the APAC region.In Appendix 3,we have detailed the publicly announced projects,including

242、status,participating entities,estimated distance,and source and sink details.Exhibit D9 highlights the possible CO2 transport routes in APAC.38.A CCUS hub is a cluster of point-source CO2 emitters that collectively utilize shared transport and storage infrastructure to reduce the overall costs of ca

243、rbon capture,utilization,and storage29 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESEconomics of cross-border CCUS routes within APAC Overview of possible CO2 transport routes in APACExhibit D9-Seven source hubs and nine sink regions could possibly develop by 2030 from announced

244、 APAC cross-border CCUS projectsSink type being exploredOnshoreOffshoreDOGFSAOnshoreOffshoreDOGFSAOnshoreOffshoreDOGFSAOnshoreOffshoreDOGFSAOnshoreOffshoreDOGFSAOnshoreOffshoreDOGFSAOnshoreOffshoreDOGFSAOnshoreOffshoreDOGFSAOnshoreOffshoreDOGFSAGwangyangIncheonNagoyaJurong IslandJapanSingaporeAustra

245、liaIndonesiaCooper BasinGippsland BasinMalay BasinOffshore SarawakMalaysiaSunda Asri BasinBonaparte BasinBintuni BasinSouth KoreaChibaShimaneMizushima Bayu Undan7 source hubs9 sink regionsPotential routeSource hubsSource countrySink regionSink country Northern Carnarvon BasinDOGF:Depleted oil and ga

246、s fields SA:saline aquifersNotes:Postulated based on landscape as of May 2024 and subject to changes as more projects are announcedSources:Company press releases;Various ministry data;BCG databases;BCG analysisK LIBHDFAJMABDCFEHKLMGJICGEBox 2 Economies of scale for CO2 shipping There are significant

247、 economies of scale up to one MtPA in CO2 shipping,primarily because large vesselsmodeled up to 50 kt for LCO2 vesselscan be constructed,and the utilization levels of these vessels can be optimized as annual volume increases.This scaling effect can lead to a reduction in the levelized cost of CO2 tr

248、ansport by as much as 61%up to the 1 MtPA threshold.Beyond the 1 MtPA mark,however,the benefits of economies of scale diminish.Once vessel size is optimized and use maximized,further scaling has a minimal impact on reducing costs because additional vessels are required,necessitating a further increa

249、se in CAPEX investments.Exhibit D10 demonstrates the economies of scale projected for CO2 transport via shipping.30 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESExhibit D10-Economies of scale for CO2 shipping mostly optimizedfrom 1 MtPA onwards1.01.52.02.53.0825444230.5050100150

250、20025001Scale effect from building bigger vessel(s)and higher utilization02Scale effect from spreading intermediate storage CAPEX(increasing number of vessels has no economy of scale if utilization is maximized)-18%Smaller drop scaling from 1 MtPA onwardsLarge drop scaling to 1 MtPA2-61%Levelized CO

251、2 transport cost shipping1(USD/tCO2)Volume(MtPA)JPN-AUS(upper range)NEA-SEA/AUS(average)KOR-MYS(lower range)Within SEANote:The longest announced NEA-SEA likely route is from Osaka Port,Japan to Port Bonython,Australia(6.1k nautical miles),while the shortest is from Gwangyang Port,South Korea to Bint

252、ulu Port,Malaysia(2.6k nautical miles);within SEA,the modelled route is from Jurong Port,Singapore to Port of Tanjung Priok,Indonesia 1.Including intermediate storage,liquefaction,loading and unloading,LP CO2 shipping and conditioning 2.For the end-to-end CCUS value chain,some industry stakeholders

253、found that the volume required for economies of scale to be optimized may be higherSources:IEAGHG Technical Report(2020),The Status and Challenges of CO2 Shipping Infrastructures;Element Energy(2018),Shipping CO2 UK Cost Estimation Study:Final report for Business,Energy&Industrial Strategy Departmen

254、t;Company press releases;Various ministry data;Academic publications;BCG databases;BCG analysis For this report,cost modelling was conducted by leveraging data from a variety of sources including:1.BCGs proprietary CCUS cost model2.Literature review3.Stakeholder interviews and socialization sessions

255、 For the CCUS routes anticipated by 2030,cost estimates for the end-to-end CCUS value chain vary significantly depending on the specific project.The costs range from as low as approximately USD 141/tCO2 for intra-SEA routes to as high as USD 287/tCO2 for routes between Japan and Australia.On average

256、,the end-to-end CCUS value chain costs across the 13 different routes are around USD 200/tCO2.31 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESThe variation in costs across routes is largely influenced by project-specific factors,such as the shipping distance,the cost of CO2 capt

257、ure,and the annual CO2 volume.The costs of capture of CO2 to export port and shipping accounts for roughly 60 80%of total value chain costs.Within the CCUS value chain,the CO2 capture process is the most expensive step,with costs averaging between approximately USD 90-150/tCO2.This accounts for abou

258、t 45%of the total value chain cost.Capture remains a critical yet cost-intensive phase,driven by the complexities involved in extracting CO2 from industrial emissions.Shipping-related transportation costs,which encompass CAPEX and OPEX for the vessels themselves and the necessary supporting infrastr

259、ucture,are another significant component,from USD 27-84/tCO2.That includes the cost of acquiring vessels for transporting 1 to 2 MtPA39 per project,each with a capacity of 20 to 50 kt.The variability in shipping costs reflects differences in project-specific factors,such as the distance and the numb

260、er of vessels required to meet the projects CO2 transport needs.Across the 13 routes,normalized unit cost for shipping ranges from USD 0.5 cent to 3 cents/ton/km.Exhibit D11 highlights the average cross-border CCUS levelized cost by value chain elements.One factor delaying the development of CCUS is

261、 the substantial gap between CCUS costs and the existing carbon pricing in the target geographies.For example,current carbon taxes or Emissions Trading System(ETS)prices range from USD 2-18/tCO2,which is significantly lower than the average levelized CCUS cost of USD 200/tCO2.The carbon price in mar

262、kets,such as Singapore are projected to increase to SGD 50-80/tCO2e(USD 39-62/tCO2e)by 2030,but these levels still fall short of the average levelized CCUS cost.Exhibit D12 provides a summary of the levelized costs associated with potential cross-border CCUS projects in the APAC region,highlighting

263、the economic challenges and the need for supportive policies to bridge the cost gap.USD 1.5-2Average cross-border CCUS levelized cost by value chain(USD/tCO2,range across potential projects)Exhibit D11-Capture and shipping accounts for the largest share of cost CAPEX per plant:USD 60-700 million#emi

264、tters per project 1-3Average CO2 captured volume per emitter:0.15-2 MtPACAPEX per vessel:USD 70-165 million Number of vessels:1 to 4Vessel capacity:20 to 50 ktCAPEX per sink:USD 45-390 millionAverage sink capacity:40-200 MtCO2USD 13-59(19%)USD 0.5LoadingUnloading(45%)Vessel USD 0.5USD 90-148USD 0.02

265、-10USD 2.5-8.5USD 2.5-8.5USD 5-22USD 2.5-70LiquefactionPipe to portCaptureOnshore storageOnshore storageConditioningPipe to sinkSequestrationUSD 90-150/tCO2USD 27-84/tCO2USD 12-75/tCO2CO2 exportinggeographyShipping related transportation(vessel and supporting infrastructure)CO2 importing geographyCa

266、pture to export portVesselPorts/TerminalsImport port to sinkSequestrationNote:Estimates based on 2023 prices,includes CAPEX and OPEX;onboard liquefaction cost included in ship costSources:IEAGHG Technical Report(2020),The Status and Challenges of CO2 Shipping Infrastructures;Element Energy(2018),Shi

267、pping CO2 UK Cost Estimation Study:Final Report for Business,Energy&Industrial Strategy Department;Drewry(May 2024),Container Shipping Financial Insight;IEAGHG-ZEP(2011),The Costs of CO2 Storage;BCG CCUS cost model;BCG analysisUSD 5.5-739.Range of 1-2 MtPA CO2 annual volume assumed per project.Minim

268、um 1 MtPA for shipping economies of scale and up to 2 MtPA based on largest publicly announced annual volume as of May 2024(Offshore Malay CCS and Oceania CCS)32 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVES40.Assuming a Low Pressure vessel that has a capacity of 50 kt with ship

269、ping routes ranging from intra-SEA to NEA-Australia41.Includes CAPEX for onboard liquefactionCCUS levelized cost of potential projects(USD/tCO2)Exhibit D12-APAC cross-border CCUS levelized cost ranges from USD 140 USD 290/tCO2Average:200RouteExportingShip distance(km)ImportingCapture to export portS

270、hipSupport infraWithin Southeast Asia(Intra-SEA)Northeast Asia to Southeast Asia(NEA-SEA)Northeast Asia to Australia(NEA-AUS)High pipeline cost due to long distance to onshore sink at 1,200 km(vs.average of 260 km among other projects)2Overall value chain cost for full pipeline transport is 2-9%more

271、 expensive compared to incorporating shipping 20%19%19%20%66%49%58%71%72%15%9%8%19%177-216167-205158-193142-174141-172196-240203-248208-254216-264218-267222-271234-287207-25363%64%51%55%47%58%61%43%13%13%20%22%25%29%23%19%20%19%20%37%23%23%30%23%22%31%Note:Estimates based on 2023 prices,includes CAP

272、EX and OPEX;Capture to export port cost includes CO2 capture,dehydration,compression,pipeline to exporting port(pipe to port cost is 2%of capture cost),onboard liquefaction included in ship cost,support infra includes liquefaction,storage,loading,unloading and conditioning,pipe to sequestration,and

273、sequestration1.Costs are lower despite relatively higher shipping distances as projects have been modelled with a higher flowrate 2.Pipeline CAPEX can be offset(e.g.,economies of scale by sharing with domestic projects,reusing natural gas pipeline)Source:IEAGHG Technical Report(2020),The Status and

274、Challenges of CO2 Shipping Infrastructures;Element Energy(2018),Shipping CO2 UK Cost Estimation Study:Final report for Business,Energy&Industrial Strategy Department;BCG CCUS cost model;BCG analysisLMKGJFAHECBIDSingapore SingaporeJapanJapanJapanJapanSouth KoreaJapanJapanJapanSouth KoreaJapanJapanMal

275、aysiaIndonesiaMalaysiaAustraliaIndonesiaMalaysiaMalaysiaAustraliaAustraliaAustraliaAustraliaMalaysiaAustralia4509706.1k110k15.0k5.0k4.6k6.0k7.4k11k6.0k6.4k7.5kBy 2050,the APAC region is expected to see a substantial increase in cross-border CCUS,with annual volumes potentially reaching 100 MtPA.To s

276、upport this scale of cross-border CO2 shipping,estimates suggest that between 85 and 150 vessels are needed40,depending on realized shipping routes.The total investments required for these vessels could range between USD 10 to 25 billion41.The magnitude of these investments depends on the type of ve

277、ssels and the distance of routes selected for cross-border CCUS shipping in APAC.Japan and South Korea are projected to be the largest exporters of CO2 by 2050,with Japan potentially exporting up to 55 MtPA and South Korea exporting approximately 25 MtPA.This presents a significant opportunity for t

278、he shipping industry to capitalize on the growing demand for CO2 transport.Exhibit D13 provides a detailed summary of the potential annual CO2 volumes that could be exported through cross-border CCUS initiatives within the APAC region,highlighting the substantial contributions expected from these ke

279、y geographies as they strive to meet their decarbonization goals by mid-century.The selection of a sequestration site is highly project-specific,influenced by the developmental stage of CO2 sequestration projects at the destination.Currently,most potential sinks are still in the early stages of deve

280、lopment in APAC,which adds complexity and cost to these projects.33 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVES55 MtPAof CO2 exported CCUS contribution to NZE20501:180 MtPA25 MtPAof CO2 exported CCUS contribution to NZE 20501:80 MtPA10 MtPA of CO2 exported CCUS contribution to

281、 NZE20501:10 MtPA10 MtPA of CO2 exportedCCUS contribution to NZE20501:35 MtPA198855ChibaMizushimaNagoyaKobeKiyakyushuOthers106332DaesanGwangyangDonghaeUlsanIncheon10Jurong IslandJapanSouth KoreaPossible long-term CO2 transport by CCUS hubs(MtPA)Potential future entrantSingaporeTaiwan95Exhibit D13-By

282、 2050,100 MtPA of cross-border CCUS could be expected in the APAC region 10TaiwanNote:Assumes that geographies follow Japans CCUS target to export 30%of CO2(100%for Singapore due to lack of CO2 sequestration capacity)1.Excluding direct air captureSources:Ministry announcements;BCG CCUS Deployment Sc

283、enario;BCG CCUS Hub Tool;BCG analysisOn a global scale,the total cross-border movement of captured CO2 within the CCUS ecosystem via shipping could approach 170 MtPA by 2050,driven by routes in both APAC and Europe.Globally,the number of vessels required to facilitate this would range from 100 to 20

284、0,depending on realized shipping routes globally and the capacity of the vessels for Europe(i.e.,20-50 kt).The potential global investments required for these vessels could be as high as USD 30 billion.In Europe,the projected shipping of captured CO2 is 70 MtPA42,which would require 15 to 55 vessels

285、43.The total investments required for these vessels could range between USD 2 to 5.5 billion44 depending on the type of vessel and capacity size being utilized.The scale of CO2 shipping for cross-border CCUS is higher for APAC region compared to Europe since emissions clusters in APAC are located fu

286、rther away from sequestration sites.Infrastructure investmentInfrastructure along the value chain,including the type of vessel for CO2 transport,will depend on the CO2 pressure and temperature conditions across the value chain.Trade-offs related to CO2 shipping under varying pressure and temperature

287、 conditions influence the design and operational requirements of CO2 vessels,including considerations,such as safety,cost,and efficiency as discussed in Chapter C.The investment estimates in the following section are based on assumption of LP vessels being utilized.Vessel investments based on CO2 tr

288、ansport routes45 Each potential APAC CO2 transport route requires significant investments for vessels.The average CAPEX ranges from USD 85 million for intra-SEA routes to USD 290 million for longer routes from Northeast Asia to Australia46.42.Includes CO2 shipping domestically and intra-Europe route

289、s43.Depending on whether they are designed to carry between 20 kt and 50 kt44.Includes CAPEX for onboard liquefaction45.Range of 1-2 MtPA CO2 annual volume assumed per project.Minimum 1 MtPA for shipping economies of scale and up to 2 MtPA based on largest publicly announced annual volume as of May

290、2024(Offshore Malay CCS and Oceania CCS)46.Estimates for LP vessel34 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESLonger routes(i.e.,Japan or South Korea to Australia compared to intra-SEA)have higher CAPEX costs.To maintain the same annual volume for longer routes,larger vessel

291、 capacities and/or more vessels are required.It is also important to note that potential CAPEX can further increase if there is a shortage of shipbuilding capacity in shipyards or if there are constraints in Type C tank supply.Longer distances also result in higher OPEX given the additional fuel con

292、sumption and operating days needed to transport similar annual volume of CO2 along these extended routes.Exhibit D14 provides a summary view of the potential range of CAPEX and shipping levelized costs across different route archetypes in APAC.Exhibit D14-LCO2 carrier CAPEX required per project rang

293、es from USD 85 million for intra-SEA to USD 290 million from Northeast Asia to AustraliaNote:Estimates based on 2023 prices;maximum operational days assumed at 350 days;numbers include onboard liquefaction Sources:IEAGHG Technical Report(2020),The Status and Challenges of CO2 Shipping Infrastructure

294、s;Element Energy(2018),Shipping CO2 UK Cost Estimation Study:Final Report for Business,Energy&Industrial Strategy Department;BCG CCUS cost model;BCG analysisPotential levelized shipping costs across shipping archetypesNEA-AUSNEA-SEAIntra-SEACAPEX investment(USD,avg.and range per potential project)Po

295、tential low pressure shipping requirements for each projectShipping levelized cost(USD/tCO2,avg.per project)Shipping archetypesLongest distanceShortest distance48%49%51%49%51%52%USD 45-60USD 290 million(USD 210550 million)USD 205 million(USD 140370 million)USD 85 million(USD 70100 million)USD 25-50U

296、SD 10-20CAPEXOPEX No of vessels:2 to 4 Size of vessel:30 to 50 ktCO2 Operating days:310 to 350 No of vessel(s):1 to 3 Size of vessel:30 to 50 ktCO2 Operating days:270 to 340 No of vessel(s):1 Size of vessel:20 ktCO2 Operating days:180 to 280Port investments based on CO2 transport routes47 The CAPEX(

297、for 1-2 MtPA CO2 annual volume)required to build CO2 shipping infrastructure at ports vary depending on whether the port is an exporting or importing facility.On average,CO2 exporting ports require USD 70 million in CAPEX,while importing ports need USD 54 million.The cost of liquefaction infrastruct

298、ure at exporting ports averages USD 23 million,with a range from USD 19 to 39 million,depending on the project.47.Range of 1-2 MtPA CO2 annual volume assumed per project.Minimum 1 MtPA for shipping economies of scale and up to 2 MtPA based on largest publicly announced annual volume as of May 2024(O

299、ffshore Malay CCS and Oceania CCS)35 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESExhibit D15-USD 70 million of CAPEX required by CO2 exporting ports and USD 54 million by importing ports to build CO2 shipping infrastructureNote:Estimates based on 2023 prices 1.Assuming pre-pres

300、surized inlet 2.The number for onshore storage investment here refers to only one terminal;the cost of onshore storage tanks includes equipment,piping,civil,instrumentation,insulation,electrical,and paintSources:IEAGHG Technical Report(2020),The Status and Challenges of CO2 Shipping Infrastructures;

301、Element Energy(2018),Shipping CO2 UK Cost Estimation Study:Final Report for Business,Energy&Industrial Strategy Department;BCG CCUS cost model;BCG analysisPotential levelized costs across different port value chain stepsPort levelized cost(USD/tCO2,avg./port across projects)CAPEX investment(USD,avg.

302、/port across potential projects)Key CCUS value chain step for ports34%67%40%60%33%66%USD 5.75-6.25USD 23 million(USD 1939 million)USD 3 million(USD 2.55 million)USD 43 million(USD 2255 million)USD 8 million(USD 614 million)USD 5.75-6.25USD 1.5-2 99.7%by volumeBalance (99.79 mol%3)95.5%Balance(95 mol

303、%)95 mol%99 vol%99.5 vol%99.9 vol%Water(H2O)30 ppm-mol 50 ppm-mol 50 ppm-mol 100 ppm-mol 100 ppm-mol 100 ppm-mol 10 ppm-mol 1.5 ppm-mol 9 ppm-mol 10 ppm-mol 200 ppm 5 ppm-mol 10 ppm-mol 200 ppm 5 ppm-mol 5 ppm-mol 20 ppm-mol 1.5 ppm-mol 100 ppm 100 ppm 2.5 ppm-mol 5 ppm-mol 5 ppm-vol 5 ppm-vol 1 ppm

304、-vol 2.5 ppm-vol 10 ppm-mol 50 ppm 0.3%by volume 0.3%by volume 0.3%by volume 0.3%by volume 2,000 ppm 30 ppm-mol 500 ppm-mol 1,200 ppm-mol 500 ppm 4%by volume 4%by volume 4%by volumeAquifer:4%by vol,EOR:2%2,000 ppmFor aquifer sequestration 4%by volume;for EOR 100-1,000 ppm 70 ppm-mol 7,500 ppm-mol 2.

305、4 mol%0.4 mol%1 mol%750 ppm-mol 40 ppm-mol 40 ppm-mol 70 ppm-mol 0.75 mol%2.4 mol%0.4 mol%1 mol%50 ppm-vol 50 ppm-vol 10 ppm-vol 50 ppm-vol 20 ppm-vol 10 ppm-vol 30 ppm-vol 50 ppm-vol 750 ppm-mol 32 ppm-vol 20 ppm-vol 20 ppm-volNorthernLightsEUrecommend-ation1Aramis(ships)Aramis(pipeline)PorthosIndu

306、strialgradeFoodgradeBeveragegradeProjectDYNAMIS2Hydrogen(H2)Nitrogen(N2)Argon(Ar)Methane(CH4)Carbon Monoxide(CO)Oxygen(O2)Total non-condensableNitrogen Oxides(NOx)Hydrogen Sulphide(H2S)Sulfur Oxides(SOx)Total Sulfur-contained compounds(COS,DMS,H2S,SOx,Mercaptan)0.3%by volume(sum of all non-condensab

307、les)0.2 mol%(sum of all non-condensables)4 mol%(sum of all non-condensables)4 mol%(sum of all non-condensables)4 mol%(sum of all non-condensables)Note:Not showing the full list of specifications for the different projects 1.Reference:ZEP/CCSA(2022)Report:Network Technology Guidance for CO2 transport

308、 by ship2.Co-funded by European Commission 3.Back-calculated as balance of remaining streamSources:Northern Lights Webinar(2024),CO2 Specification for the Northern Lights Value Chain;Ahmad Amirhilmi A.Razak et al(2023),Physical and Chemical Effect of Impurities in Carbon Capture,Utilisation and Stor

309、age;ZEP/CCSA(2022),Network Technology Guidance for CO2Transport by Ship;Aspelund,A(2010):Gas Purification,Compression and Liquefaction Processes and Technology for Carbon Dioxide(CO2)Transport;Richard T.J Porter et al(2015),The Range and Level of Impurities in CO2 Streams from Different Carbon Captu

310、re Sources;Aramis Project;Porthos Project;BCG analysisShipping CO2specificationsPipeline CO2specificationsCompressed Gas Association(LCO2)63 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESSeveral CCUS projects in Europe have adopted an approach to assign the responsibility for mee

311、ting CO2 purity specifications to the emitter.This approach could optimize overall costs and streamline operations within the CCUS value chain.Northern Lights(Bergen,Norway):In this project,emitters are required to send CO2 that meets the required CO2 purity specifications,with impurity-specific lim

312、its,to the Northern Lights vessels,which will then transport the CO2 to the Northern Lights terminal,which includes intermediate storage facilities.From the terminal,the CO2 is transported via an offshore pipeline to be sequestered in an offshore saline aquifer.Porthos(Rotterdam,Netherlands):Here,th

313、e emitter is responsible for ensuring that the CO2 delivered to the connection point or into the Porthos transport system complies with the prescribed CO2 purity specifications.Once the CO2 is delivered,it is transported via an offshore pipeline and sequestered in depleted gas fields beneath the Nor

314、th Sea.Aramis(Rotterdam,Netherlands):The project requires emitters to meet the required CO2 purity specifications when delivering CO2.The CO2 will be transported to a collection hub via onshore pipelines or by vessels.From this collection hub,CO2 is then transported via an offshore pipeline to seque

315、stration in offshore depleted gas fields.CO2 conditions for sequestration For permanent CO2 sequestration,the optimal condition depends greatly on the characteristics of the sink.Deep sinks typically have higher injection pressures due to the poorer rock quality but higher fracture gradients for the

316、 seal.As the depth of the reservoir increases,reservoir pressure(Pres)and minimum horizontal stress(Shmin)also increase.Minimum injection pressure increases as Pres increases,and the maximum injection pressure increases as Shmin increases.Depleted sinks generally have lower initial injection pressur

317、es.When sinks are depleted,both Pres and Shmin decrease.Minimum injection pressure decreases as Pres decreases,and maximum injection pressure decreases as Shmin decreases.For CCUS,O&G fields are depleted,while saline aquifers are not.Depleting a reservoir increases the difference between the minimum

318、 and maximum allowable injection pressures,which reduces the risk of fracture and increases the maximum injection rate.The permeability of sinks is another critical factor to consider.Sinks with lower permeability require a larger pressure difference between the injection pressure and Pres for the s

319、ame flow rate.However,higher permeability increases the likelihood of causing fracture of the reservoir rock or the seal.At low temperatures,CO2 injection can lead to the formation of gas hydrates,which reduces the injectivity of the sink.Therefore,a minimum injection temperature must be maintained

320、to prevent hydrate formation.This minimum temperature should include a safety buffer above the threshold temperature to ensure reliability.Upon identifying the allowable operating conditions,these conditions should be optimized to minimize integrity risk and unit costs.Transporting CO2 at a higher t

321、emperature can improve injectivity,but more energy would be needed to heat the CO2.Similarly,transporting CO2 at a higher pressure can increase the injection rate,but it also increases the risk of fracturing the reservoir rock,or more critically,the seal.64 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS

322、-BORDER CCUS INITIATIVESAppendix 2:Details on potential CCUS hubs for net CO exporting countries in APACOverview of potential role of CCUS in Japan Geography20504.2180Target YearNZETarget YearCCUS Contribution to NZE(MtPA)1203020501.Excluding Direct Air Capture 2.Bottom-up estimation based on BCG CC

323、US Hub Tool 3.Assuming nuclear maintains a similar mix as 20304.Top-down approach that can differ from recent projects announced 5.Others include hydrogen,ammonia,fossil fuels processing,bioenergy,etc.Source:Statista Market Insights;METI;Japan Renewable Energy Institute;BCG CCUS Deployment Scenario;

324、BCG analysis Exhibit Z2.1-Japan:CCUS to focus on coal and gas power generation JapanFossil fuels powerFossil fuels processingOther heavy industries-600-30-200Stationary Emissions(2023,MtPA)2Rapidly expanding renewable energy usage replacing fossil fuels Energy mix projections(in Bn kWh)CCUS contribu

325、tion to NZE Scenario (%of MtPA)Directional4Declared by prime minister in October 2020Fossil fuels usage to drop by 40%by 2030(from 771 in 2023 to 471),reaching 11%by 2050 Actual deployment for heavy industries may exceed target many MoUs signed by these emitters CCUS expected to focus on fossil fuel

326、 power;heavy industries may exceed target 2023Hydrogen and ammonia1,0271,150Renewable energyNuclear powerFossil fuelsOthers5Iron and steelCementCoal power generationGas power generation2030205032030205020%5%1%10%57%22%11%37%21%41%75%4.218017%19%5%30%34%11%82%1%1%Exhibits Z2.1 to Z2.3 provides an ove

327、rview of the role of CCUS in the decarbonization pathway for each expected net CO2 exporting country(Japan,South Korea,Singapore)in the APAC region.65 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESExhibit Z2.2-South Korea:Majority of CCUS expected for hydrogen in the long-run,fol

328、lowed by power generation Geography20507.780Target YearNZETarget YearCCUS Contribution to NZE(MtPA)1203020501.Excluding Direct Air Capture 2.Bottom-up estimation based on BCG CCUS Hub Tool 3.Top-down approach that can differ from recent projects announced 4.Others include iron and steel,bioenergy,et

329、c.Sources:Statista Market Insights;South Korea Green Energy Strategy Institute;Trade.gov;Climate Action Tracker;BCG CCUS Deployment Scenario;BCG analysis South KoreaFossil fuels powerFossil fuels processingOther heavy industries35035150Stationary Emissions(2023,MtPA)2Energy mix projections(in Bn kWh

330、)CCUS contribution to NZE Scenario (%of MtPA)K-Map Scenario by South Korean think tanks Fossil fuels usage to drop by 25%by 2030(from 346 in 2023 to 265),reaching 9%by 2050As part of South Koreas ambition to be a first mover in the hydrogen economy 2023Hydrogen and ammonia622Renewable energyNuclear

331、powerFossil fuelsOthers4HydrogenCementCoal power generationGas power generation203020502030205060011%32%23%18%64%43%58%31%8015%9%10%55%10%1%3%7.728%69%2%9%9%Overview of potential role of CCUS in South Korea Directional3Rapidly expanding renewable energy usage replacing fossil fuels and nuclear CCUS

332、expected to focus on fossil fuel power while transitioning to blue hydrogen66 OPPORTUNITIES FOR SHIPPING TO ENABLE CROSS-BORDER CCUS INITIATIVESContinued dependence on fossil fuels except in most optimistic scenario CCUS expected to focus on emitters in Jurong Island Geography20502.010Target YearNZE

333、Target YearCCUS Contribution to NZE(MtPA)203020501.Bottom-up estimation based on BCG CCUS Hub Tool 2.Top-down approach that can differ from recent projects announced 3.Consisting of petroleum refining,chemicals and othersSources:Statista Market Insights;NCCS;EMA;EDB;BCG analysis Exhibit Z2.3-Singapore:Energy transition to take a longer timeline,with CCUS likely focused on emitters on or near Juron