Australia CCS hub a ‘$600b market’
Australia’s greatest potential for a successful carbon capture and storage sector lies in helping near neighbours realise their net zero ambitions, according to global energy consultants Wood Mackenzie.
In an article for the 2024 Australian Energy Producers Journal, Wood Mackenzie analyst for carbon capture, utilisation and storage, Stephanie Chiang said USD325–385 billion (AUD491 – 582 billion) in revenue could be gained from opening all of Australia’s excess storage capacity to regional emitters, assuming a transport and storage fee of USD33–39/tCO2.
Japan and South Korea are looking to adopt CCS but will need to rely on other countries’ CO2 stores, the article said.
Australia is a desirable option, due to its abundant CO2 storage potential and longstanding trade relationships with Japan and South Korea.
But building hubs to transport and store CO2 at scale requires billions of dollars of capital investment, as well as assuming ongoing subsurface risk for stored CO2.
Within the Asia–Pacific, Australia, Indonesia, and Malaysia emerge as possible regional CCS hubs with high CO2 storage potential, Ms Chang said.
Australia is a CCS policy front-runner, with clear Federal regulations governing offshore greenhouse gas storage and as a signatory to international conventions
allowing the export of CO2 between countries for offshore geological storage.
“This puts Australia in a favourable position to form bilateral CO2 transport and storage agreements with Japan and South Korea,” Ms Chang said.
But Indonesia was catching up, passing its own regulations around cross-border storage and transport which, coupled with vast storage potential, makes it a
credible competitor as a regional CCS hub.
Australia can become the region’s preferred CCS hub, but it would require clear government direction, support for anchor projects, and private sector commitment.
The article said the UK and Netherlands run competitions to select CCS projects for funding.
“Australia could do the same, evaluating projects based on criteria such as scale, timeline, cost, developers’ expertise, and synergies with domestic industries,” Ms Chang said.
“Funding three CCS hubs of 10 Mtpa at 30% of the transport and storage capital expenditure would cost the Government ~US$550 million.”
Australian Energy Producers Chief Executive Samantha McCulloch said the economic and emissions reduction opportunities was why the oil and gas industry
had been calling for a national CCS roadmap.
“Net zero is not just a challenge, it’s an opportunity – and it’s a huge economic opportunity for Australia,” she said. “CCS can attract new investment,
new revenues, and new jobs in a new net zero industry.”