Insights and Commentaries

Insights and Commentaries

CCS in the Asia Pacific: A Regional Overview

2024 CCS Policy, Legal, and Regulatory Review
11th December 2024

CCS Momentum Continues to Build in the Asia Pacific 

The APAC region faces the dual challenge of balancing economic growth with decarbonisation in a predominantly fossil fuel-reliant energy system. Through collaboration, robust policies, and innovative financing mechanisms, CCS is positioned to play a pivotal role in helping the region meet its climate targets while addressing rising energy demand. Momentum for CCS in the APAC region is growing, from jurisdictions such as Australia, Japan, China and India to South Korea and the Association of Southeast Asian Nations (ASEAN) block of nations. These developments are underpinned by ambitious net-zero commitments and policy and regulatory frameworks aimed at scaling CCS deployment.

 

Regional Leaders: Australia, Japan, and China 

Australia, Japan and China have positioned themselves as leaders in the APAC region, supported by well-established policies and legal frameworks: 

  • Australia’s domestic policy landscape consists of well-developed legal and regulatory frameworks, current and historic grant funding for projects amounting to over AU$850 million and eligibility for credits under market mechanisms, such as the ACCU Scheme and Safeguard Mechanism. The federal government is now building upon this foundation to facilitate regional collaboration on transboundary CCS value chains. 
  • Japan remains a pioneer in clean energy, project finance, and technology transfer in the region. Japan has intensified its CCS efforts with strategic roadmaps and integrated regulations. Recent initiatives include funding for nine CCS projects, four of which involve cross-border CO2 transport and storage. 
  • China has made significant investments in CCS through state-owned enterprises, focusing on pilot and large-scale demonstration projects, laying the groundwork for commercial-scale CCS deployment. Since pledging to achieve net-zero emissions by 2060, multiple policy documents have included CCS in decarbonisation pathways and funding allocated to projects. Recent policy documents reflect the central government’s first involvement in coordinating CCS deployment, marking a shift toward exploring diverse policy pathways to accelerate progress. 

 

Southeast Asia: Emerging CCS Hubs 

High domestic emissions and unequal storage resources are driving transboundary CCS collaborations in APAC. Countries like Australia, Indonesia, and South Korea have established legislation to enable cross-border CCS activities, while Malaysia, Singapore, and Japan are integrating similar provisions into their policies. 

Many countries in the region are developing or refining regulatory frameworks for CCS, drawing inspiration from early movers like Australia and the European Union. Some of the new regulatory frameworks lack clarity on key details, such as permitting, and will require the development of supporting regulations or guidance documents.  

Key policy, regulatory and project advancements include:  

  • Japan’s CCS Business Act (2024) introduces a permitting system for CO₂ storage, with provisions for monitoring, post-closure liability, and storage rights management by METI. 
  • Malaysia is developing a national CCS framework, expected by December 2024, while Sarawak already regulates a planned CCS hub. 
  • Indonesia’s Presidential Regulation 14/2024 establishes permitting, safety standards, post-closure liability, and incentives, including tax benefits and carbon pricing. 
  • Singapore is advancing a 2.5 Mtpa CCS project by 2030 and collaborating with Indonesia and Malaysia on CO₂ transport and storage initiatives. 
  • Thailand’s draft amendment to the Petroleum Act (2024) proposes including CCS exploration under the term “carbon business.” 
  • South Korea’s CCS Act (effective 2025) outlines permitting processes and financial support mechanisms for CCS activities. 

 

Building Regional Collaboration 

Collaboration is key to advancing CCS in the APAC region and has taken the form of bilateral agreements, knowledge-sharing forums, and regional crediting and funding mechanisms. Several platforms and agreements are fostering cooperation: 

  • Bilateral Agreements: Countries like Singapore and Indonesia have signed agreements to enable cross-border CO2 transport and storage. 
  • Asia Zero Emission Center (AZEC): Supported by Japan, Australia, and ASEAN countries, AZEC promotes CCS through policy coordination and public-private partnerships. 
  • Asia CCUS Network: Hosted by the Economic Research Institute for ASEAN and East Asia (ERIA), this platform enables knowledge-sharing and the development of storage networks across the region. 

 

Incentivising CCS through Carbon Pricing 

Carbon pricing mechanisms are gaining traction across the region, enhancing the role of CO2 markets in emissions reduction: 

  • Singapore's carbon tax, established in 2019, has been raised to S$25/tCO2-e, and is set to rise to S$50-80/tCO2-e by 2030, providing strong incentives for CCS. 
  • China hosts the world’s largest emissions trading scheme (ETS), covering over 40% of its emissions, though greater CCS integration could enhance its effectiveness. 
  • Indonesia allows CCS projects to earn credits under its carbon pricing scheme, boosting investment in the technology. 
  • Thailand plans to implement a carbon tax by 2025. 

The rise of voluntary carbon exchanges, such as Malaysia’s Bursa Carbon Exchange and Indonesia’s IDX Carbon, also provides additional potential opportunities for trading CCS-related credits. 


To read the complete 2024 CCS Policy, Legal, and Regulatory Review, click the link below. 

Thought Leadership - CCS Policy, Legal and Regulatory Review - Global CCS Institute 

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