As atmospheric carbon dioxide concentrations hit new records and extreme weather conditions plague communities worldwide due to anthropogenic climate change, the global pressure to decarbonize intensifies.
Asia-Pacific in particular finds itself at a critical juncture. In the decades of prioritizing rapid economic development, unchecked industrialization and resource exploitation have proliferated at the expense of the natural environment. From the vanishing coastlines of Bangladesh to the flooded streets of Jakarta, its acute vulnerability to climate change is now vividly illustrated by the tangible consequences of rising sea levels. The region now faces a troubling double-bind: balancing sustained growth while mitigating its substantial carbon footprint.
Decarbonization Challenges in APAC
In light of the climate crisis, the 2015 Paris Agreement outlined several key climate goals including achieving net carbon neutrality by 2050, spurring governments and corporations across the globe to commit to decarbonization efforts.
Despite this international momentum, Asia-Pacific’s carbon-intensive industries like steel and cement remain a major challenge. With a lack of readily available low-carbon alternatives, these hard-to-abate sectors continue to contribute significantly to the region’s emissions. In addition, typical large-scale carbon capture and storage (CCS) methods prove difficult to implement in many Southeast Asian countries because of high seismic activity and geological complexities.
CCUS: A Potential Solution
This is where the rapidly growing industry of carbon capture, utilization, and storage (CCUS) may be a viable alternative. While CCS entails the permanent storage of captured CO2, carbon capture utilization takes it a step further by converting CO2 into high-value products like synthetic fuels and building materials, which then has the additional advantage of generating revenue that offsets the expenses of carbon capture and transportation.
Key benefits of CCUS include:
1. Emissions Abatement
CCUS reduces the amount of CO2 that gets released into the atmosphere. Recent advancements in capture technologies, such as solvent-based and membrane-based systems, have improved efficiency and reduced costs.
Post-combustion capture, which refers to the separation of CO2 from flue gases produced after fossil fuel combustion, stands out as a technically and economically viable solution for hard-to-abate industrial sectors where decarbonization is often costly. What makes this method particularly advantageous is its ability to be easily retrofitted to existing plants, offering a practical and cost-effective way to reduce CO2 emissions without disrupting upstream processes.
2. Resource Recovery
Captured CO2 can be utilized in the production of other materials, including fertilizers, CO2-based synthetic fuels, chemicals, building materials, and for enhanced oil recovery. This contributes to new economic opportunities and promotes a circular carbon economy.
3. Energy Security & Transition
CCUS can play a crucial role in decarbonizing the power sector and enabling the production of low-carbon hydrogen, a key element in the transition to a sustainable energy system. By retrofitting existing power plants with CCUS and developing blue hydrogen production facilities, the Asia-Pacific region can simultaneously maintain energy security while reducing its carbon footprint.
It thus comes as no surprise that carbon utilization is quickly gaining traction, as evidenced by the influx of private and public funding into the field. In 2023 alone, global venture capital (VC) investment in utilization companies approached nearly 500 million USD. CCUS could catalyze a paradigm shift, transforming the perception of CO2 from a waste product into a valuable resource; it may very well be the key to creating a circular carbon economy that is both sustainable and profitable.
APAC’s CCUS Potential
With over 20 potential hubs, the region offers substantial opportunities to adopt CCUS technologies. Although much of the global advancement in the industry has occurred elsewhere, Asia-Pacific is now starting to make strides. Five years ago, only two of the 23 operational CCUS projects worldwide were based in Asia-Pacific. Today, however, that number has risen to nine, with facilities primarily operating in China and Australia.
A report by McKinsey & Company found that key factors required to maintain this momentum are already present in the region, such as:
1. Competitive Cost Structure
The CCUS value chain closely aligns with the upstream oil and gas industry, an area where Asia-Pacific has many advantages. Oil companies in the region have well-established local supply chains, efficient well-delivery processes, and strong operational, maintenance, and safety practices.
2. Leading Engineering, Procurement, and Construction (EPC) capabilities
Asia is home to some of the world’s top EPC companies, with China, South Korea, and Japan dominating over 80% of the global shipbuilding market. These companies bring extensive expertise, proprietary technologies, and economies of scale, all of which are crucial for CCUS projects that require significant infrastructure development, rapid technological advances, and scaling.
3. Enabling Economic Growth
CCUS can be a powerful driver of economic growth. The technology has the potential to create jobs, spur innovation, enhance trade, and generate revenue from low-carbon products—all while supporting the decarbonization of existing industries. The International Energy Agency (IEA) and the Asian Development Bank (ADB) estimate that CCUS could contribute between 0.2% and 0.6% of China’s 2019 GDP by 2030, adding up to $100 billion annually.
4. Collaborative Culture
CCUS projects are massive undertakings that require extensive regulatory involvement, long-term infrastructure investments, and complex commercial arrangements between public and private entities. Asia-Pacific is well-versed in managing such ecosystems, as demonstrated by its success with special economic zones, industrial parks, and large-scale urban developments.
The Corporate Imperative
Amid growing regulatory pressures and an increasing focus on sustainability goals, now is a pivotal time for corporates to engage with this rapidly emerging industry. Early adoption of CCUS can position companies as leaders in this transitory stage of the economy, and these are some ways they can do so:
1. Targeted Investments
Corporations can invest in and collaborate with CCUS technology developers, accelerating the commercialization of cutting-edge solutions. This includes supporting pilot projects, funding research and development, and providing access to industrial facilities for technology demonstration.
Plug and Play Portfolio startup: Heirloom Carbon
Heirloom Carbon Technologies, Inc., a Plug and Play portfolio startup, delivers one of the most cost-efficient carbon removal solutions. Their cutting-edge technology enhances limestone’s natural ability to capture CO2 directly from the atmosphere, reducing the time it takes to absorb CO2 from years to less than 3 days. This dramatic efficiency boost is a game-changer, making carbon removal more scalable and economically viable than ever before. To handle the storage of captured CO2, the startup will collaborate with carbon management company CapturePoint.
In June 2024, Heirloom Carbon announced plans for a major decarbonization project at the Port of Caddo-Bossier, combining public and private investment to establish two Direct Air Capture (DAC) facilities, demonstrating the confidence in their technology and its potential for real-world impact. The project's projected economic benefits are equally impressive: 269 new jobs with competitive salaries, along with support for over 1,000 construction jobs, a testament to how CCUS investments can create local economic opportunities while combating climate change.
This project underscores why now is the time for companies to invest in CCUS. Such initiatives not only align with global decarbonization efforts but also boost the economy through job creation and technological advancements. Early investments in CCUS can fuel innovation, promote economic growth, and position companies at the forefront of the transition to a low-carbon future.
2. Collaborative Partnerships
Collaborations between diverse entities such as industry players, governments, and research institutions are fundamental for tackling technical challenges, exchanging knowledge, and accelerating the deployment of CCUS. By creating an avenue to leverage each organization’s specialized expertise and resources, partnerships can facilitate the development of shared infrastructure, effective knowledge transfer, and cultivate a skilled workforce necessary to scale CCUS solutions.
Plug and Play Portfolio startup: Carbon Ridge
Florida-based shipping and energy supply chain company Crowley has partnered with Carbon Ridge Inc., a Plug and Play portfolio startup, to launch a pilot project for onboard carbon capture and storage. The initiative utilizes Carbon Ridge’s second-generation carbon capture technology on Crowley’s international container ship, and aims to test, measure, and optimize this innovative system in maritime environments. Supported by the U.S. Maritime Administration (MARAD) and the Maritime Environmental and Technical Assistance (META) program, this project showcases the power of cross-sector collaboration in driving decarbonization.
With the goal of capturing one metric ton of CO2 per day from the ship’s main engine, the project involves engineering and integrating a small-scale version of Carbon Ridge’s full carbon capture system. This technology can potentially reduce emissions by up to 95%, offering ship owners a way to future-proof their vessels against incoming regulations while helping them meet decarbonization goals.
The growing emphasis on environmental responsibility is reshaping corporate priorities. By embracing CCUS now, businesses can proactively meet evolving regulations and sustainability goals, solidifying their leadership in the transition to a greener economy.
Through our Sustainability Program in key locations worldwide including APAC, Silicon Valley, and Milan, Plug and Play is driving innovation to address some of the most pressing environmental challenges of our time. Beyond Heirloom Carbon and Carbon Ridge, we're proud to have invested in a diverse portfolio of startups worldwide, many of which are partnering with corporations on groundbreaking CCUS pilot projects, pushing the boundaries of what's possible in sustainable technology.
Decarbonization for Corporations
For all its transformative potential, CCUS is best utilized as a complementary tool within a holistic decarbonization approach. Apart from investing in CCUS technologies, companies should also prioritize energy efficiency, renewable energy adoption, and circular economy practices to achieve meaningful and sustainable impact.
Despite certain challenges, the potential of CCUS remains clear. When integrated effectively with other decarbonization strategies, it can be a powerful asset in meeting climate goals.
Interested in exploring the future of CCUS and other sustainable innovations? Check out our Sustainability Program and join the platform to connect with a global network of startups, corporates, and investors. Whether you're a startup founder or an investor looking to engage in the next wave of climate tech solutions, now is the time to get involved!
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ARTICLE CONTRIBUTED BY: CHANDNI JAGA, JEZ CHIN
Chandni Jaga, Senior Ventures Associate (Sustainability), Plug and Play APAC
Jez Chin, Marketing Associate, Plug and Play APAC
