This technology has garnered significant attention in recent years, with various industries adopting it to reduce their carbon footprint.
While CCUS is a critical solution to decarbonise operations, it also has economic implications.
The Carbon Storage Potential of Malaysia
Malaysia’s unique geography and geology make it an attractive location for carbon storage.
The Energy Transition in Sarawak
The energy transition in Sarawak is a significant development that has garnered considerable attention in recent years.
The Rise of Carbon Capture, Utilization and Storage (CCUS) in Malaysia
The state of Sarawak in Malaysia has taken a significant step towards reducing its carbon footprint by becoming the first state in the country to pass a law regulating carbon emissions.
The Regulatory Framework of Sarawak
Sarawak, a state in Malaysia, has established a comprehensive regulatory framework for carbon-related activities, positioning itself as a leader in the sector.
The Paris Agreement and Malaysia’s Commitments The Paris Agreement, an international accord signed in 2015, sets the global framework for addressing climate change. The agreement emphasizes the importance of reducing greenhouse gas emissions and mitigating the impacts of climate change.
The project s carbon capture rate was only 1.4%, which is significantly lower than the 5% target. The project s high cost was also a major concern, with estimates suggesting it would cost over $1 billion to capture just 1 ton of CO2.
The Role of Government Support in Overcoming CCS Challenges
Government support is crucial in overcoming the challenges faced by CCS projects.
This is a far cry from the 50 per cent capture rate that the industry had hoped for. The current technology is not yet capable of capturing all the carbon dioxide emissions from the power plants, and the industry is still in the experimental phase.
CCUS technology is still in its early stages of development, and significant advancements are needed to make it more efficient and cost-effective. Currently, CCUS technology is used in a limited number of power plants, primarily in the United States and Europe. • Post-combustion capture: This method involves capturing carbon dioxide from the flue gas of a power plant after combustion. • Pre-combustion capture: This method involves capturing carbon dioxide from the fuel before it is combusted.
The Challenge of Carbon Capture and Storage (CCS)
The Petronas Kasawari CCS project, located off the coast of Bintulu in Malaysia, is a significant undertaking in the realm of carbon capture and storage (CCS). CCS is a technology designed to reduce greenhouse gas emissions from industrial sources by capturing the CO2 emissions and storing them underground.
The CCUS Bill: A Closer Look
The CCUS Bill, also known as the Carbon Capture, Utilization and Storage (CCUS) Bill, aims to promote the development and deployment of carbon capture, utilization, and storage (CCUS) technologies in the United States. The bill was passed by the U.S.
Understanding the Risks of CCUS Projects
CCUS projects are designed to capture and utilize carbon dioxide emissions from industrial sources. However, these projects carry inherent risks that must be carefully considered. • Carbon dioxide leakage: This is a significant concern, as even a small leak can have devastating environmental consequences.
The Importance of Financial Mechanisms for CCUS
Financial mechanisms are crucial for the successful implementation of Carbon Capture, Utilization and Storage (CCUS) projects. Without adequate funding, CCUS projects are unlikely to move forward, and the benefits of reducing greenhouse gas emissions will not be realized.
Private Sector Investment
Private sector investment is also essential for the development and deployment of CCUS technology. Companies can invest in CCUS projects through various financial models, such as joint ventures, partnerships, and equity investments.
This is achieved through a combination of government subsidies and tax incentives.
The UK’s CCS project is a prime example of the benefits of government guarantee in ensuring the bankability of CCUS projects. The project aims to capture CO2 emissions from industrial sources and store them underground.
The Role of the Model in Risk-Sharing Arrangements
The model plays a crucial role in facilitating risk-sharing arrangements between the private sector and the government. By guaranteeing a certain IRR, the model provides a level of security for private sector investors, enabling them to take on projects that might otherwise be deemed too risky.
Risk-sharing arrangements, such as insurance, play a crucial role in enabling private sector investment.
This can attract more investments to CCUS. CCS Plus is a collaborative project that brings together government agencies, industry associations, and non-profit organizations. It aims to create a comprehensive framework for CCUS development in the United States. CCS Plus aims to increase public awareness and understanding of CCUS. It also aims to increase public engagement and participation in CCUS.
This approach would not only reduce emissions but also create new revenue streams for companies.
Samsung Electronics, a leading electronics manufacturer, has already begun exploring the use of CCUS credits in its supply chain. The company has partnered with a CCUS technology provider to invest in a carbon capture facility, which will capture CO2 emissions from its manufacturing processes. • By embedding CCUS credits into its supply chain, Samsung Electronics can reduce its greenhouse gas emissions while also generating revenue through the sale of these credits.
If you don’t sell the credits, your product will be lower in carbon intensity, but you will not benefit from the selling of the credits. Companies will need to weigh the benefits of selling carbon credits against the cost of the credits themselves. The costs of carbon credits include the initial cost of obtaining the credits, which can range from $10 to $30 per ton of CO2. This cost can be a significant burden for companies, especially those that operate in the transportation sector, where costs can be high. Additionally, the cost of the credits can impact the company’s bottom line, which may affect their ability to invest in other initiatives that could reduce their carbon intensity. On the other hand, companies that sell carbon credits can potentially benefit from the revenue generated. The revenue from selling carbon credits can range from $10 to $30 per ton of CO2, depending on the market demand and the type of credits being sold. This revenue can be used to offset the costs of obtaining the credits, as well as to invest in initiatives that reduce carbon intensity. In some cases, companies that sell carbon credits can even generate a profit, especially if they have a high demand for their credits. However, this profit may not be sustainable in the long term, as the cost of obtaining the credits may eventually exceed the revenue generated by selling them. Ultimately, the decision to sell or not sell carbon credits depends on a company’s specific situation and goals. Companies that prioritize reducing their carbon intensity should focus on investing in initiatives that directly reduce emissions, rather than relying on selling credits. However, companies that rely on selling credits to offset their costs may need to weigh the benefits against the costs of obtaining the credits. If the revenue generated from selling credits is not sufficient to offset the costs, the company may need to consider alternative options, such as investing in new technologies or processes that can reduce their carbon intensity.
The Emissions Trading System (ETS)
The Emissions Trading System (ETS) is a market-based approach to reducing greenhouse gas emissions.
The Rise of Carbon Capture, Utilization and Storage (CCUS) in Malaysia
Malaysia has been actively exploring the potential of Carbon Capture, Utilization and Storage (CCUS) technology to reduce its carbon footprint and contribute to the global effort to combat climate change.
This is based on the assumption that the emissions are captured through the use of carbon capture and storage (CCS) technology.
The Potential of Carbon Capture and Storage (CCS) Technology
Carbon capture and storage (CCS) technology has the potential to significantly reduce greenhouse gas emissions from industrial sources.
This can be achieved through a carbon pricing mechanism.
CCS is a costly technology, and the commercial viability of CCS is a major challenge.
Technical Measures for Cost Reduction
The technical measures that could reduce the costs of CCS by 10 to 20 percent by 2030 and beyond are numerous and varied. These measures include:
These technical measures have the potential to significantly reduce the costs of CCS, making it a more viable option for Southeast Asia. By investing in these measures, countries in the region can reduce their reliance on fossil fuels and transition to a more sustainable energy mix.
The economic benefits of CCS can also be seen in the potential for increased trade and cooperation between countries in the region.
Malaysia’s Decarbonisation Ambitions
Malaysia has set its sights on becoming a leader in regional decarbonisation efforts, driven by its vast natural resources and strategic location. The country’s abundant natural storage sites, including peatlands, forests, and wetlands, offer a unique opportunity to sequester carbon dioxide and mitigate climate change.
Policy Support for Decarbonisation
The Malaysian government has provided significant policy support for decarbonisation efforts through the National Energy Transition Roadmap (NETR) and New Industrial Master Plan 2030 (NIMP 2030). These policies aim to promote the development of low-carbon industries, increase energy efficiency, and reduce greenhouse gas emissions. • Key features of the NETR and NIMP 2030:
Opportunities for Regional Cooperation
Malaysia’s decarbonisation ambitions offer opportunities for regional cooperation and collaboration.
Further details on this topic will be provided shortly.
