Northern Territory Low Emissions Carbon Capture Storage and Utilisation Hub Regional Understanding and Context ? Task 2 Report Jody Rogers, Ryan Gee, Matt Ironside, Bahman Joodi, Andrew Ross December 2024 CSIRO Energy Citation Rogers, J., Gee, R., Ironside, M., Joodi, B., Ross, A. (2024) Northern Territory Low Emissions Carbon Capture Storage and Utilisation Hub, Regional Understanding and Context ? Task 2 Report. CSIRO report number EP2024-6192. pp. 78. CSIRO, Australia. Copyright © Commonwealth Scientific and Industrial Research Organisation 2024. To the extent permitted by law, all rights are reserved and no part of this publication covered by copyright may be reproduced or copied in any form or by any means except with the written permission of CSIRO. Important disclaimer CSIRO advises that the information contained in this publication comprises general statements based on scientific research. The reader is advised and needs to be aware that such information may be incomplete or unable to be used in any specific situation. No reliance or actions must therefore be made on that information without seeking prior expert professional, scientific and technical advice. To the extent permitted by law, CSIRO (including its employees and consultants) excludes all liability to any person for any consequences, including but not limited to all losses, damages, costs, expenses and any other compensation, arising directly or indirectly from using this publication (in part or in whole) and any information or material contained in it. CSIRO is committed to providing web accessible content wherever possible. If you are having difficulties with accessing this document, please contact csiro.au/contact. Foreword Transitioning the global energy system while rapidly reducing emissions to net zero by 2050 is a vast and complex global challenge. Modelling of a range of emissions pathways and decarbonisation scenarios from the Intergovernmental Panel on Climate Change (IPCC, 2023a), International Energy Agency (IEA, 2024c) and Net Zero Australia (2024) shows that to meet net zero greenhouse gas emissions targets by 2050, a wide range of emissions reduction technologies will be required to decarbonise existing and future industries globally (IPCC, 2023b). These organisations identify that emissions elimination from hard-to-abate and high-emissions industries will require using carbon capture and storage (CCS) alongside other abatement strategies, such as electrification, underpinned by power generation from renewable energy sources such as photovoltaics and wind. Globally, there is considerable effort to identify industrial hubs and clusters where common user infrastructure can enable rapid decarbonisation of existing industries and enable future low-emissions industrial development. Australia has an opportunity to create new low-carbon growth industries and jobs in these areas, but lacks the infrastructure, skills base and business models to realise these opportunities. The transition to net zero will have greater impact on regional communities, particularly those reliant on industries in transition, but it may also create economic opportunities through a wide range of new industries and jobs suited to regional areas. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) is working to identify decarbonisation and transition pathways for existing and potential future industries that may be established in the Northern Territory by developing a Low Emissions Hub concept in the Darwin region. CSIRO has established a portfolio of projects to explore and evaluate a range of emissions reduction and emerging transition technologies and approaches. This includes research into the Northern Territory’s renewable energy potential, hydrogen demand generation and storage, and carbon capture utilisation and storage (CCUS). CSIRO is working collaboratively with industry and government to understand their needs, drivers and strategic directions so that our research is informed and relevant. This includes establishing appropriate pathways and partnerships to understand and incorporate the perspectives of First Nations peoples. A key activity is the research into a business case project (CSIRO, 2024; Ross et al., 2022) that aims to enhance understanding of the viability of a CCUS hub centred on the Middle Arm of the Darwin Harbour. The work has three elements comprising 15 tasks: 1. analysing macroeconomic drivers, Northern Territory and regional emissions, low-emissions product markets (Ross et al., 2023), identifying key learnings from other low-emissions hubs being developed globally, and cross-sector coupling opportunities (Tasks 0?5) 2. completing CCUS hub technical definition and technical risk reduction studies, including detailed studies on the infrastructure requirements for a CCUS hub, renewable power requirements for existing and potential future industries, and road-mapping for CO2 utilisation industries that could be established to produce low or net zero products (e.g. zero-emission chemical feedstocks) (CSIRO, 2023) (Tasks 6?9) 3. creating a business case to appreciate the scale of investment required to develop a Low Emissions Hub and the economic returns from doing so. This will lead to suggested business models and routes of execution (Tasks 10?14). The CCUS business case project will involve research that is based on possible industrial development scenarios, models of future potential emissions, market demand, enabling technologies and costs. The project is intended to provide an understanding of possible future outcomes. Industry development will be determined by individual industry proponent investment decisions, government policies and regulation, and the development trajectories of technologies essential to the energy and emissions transition. On completion of this research, outcomes of the CCUS business case project will be made publicly available. The work summarised in this report comprises Task 2 of the Northern Territory CCUS business case project. It provides a regional understanding and context. It is focused on developing an understanding of the current economies, industries and emissions sources and the changes required in the region to meet long-term energy needs and emissions reduction goals and how they could impact on the CCUS hub business case in the Darwin region. Contents Figures iv Tables vii Abbreviations viii Acknowledgments x Summary xi 1 Introduction 1 2 Global economic and energy outlook 2 3 South-East Asian regional economic and energy outlook 5 3.1 Key trading partners’ economic and energy outlook 8 4 CO2 sources and mitigation plans 21 4.1 Method 21 4.2 Regional CO2 sources and mitigation plans 25 4.3 Key trading partners’ CO2 sources and mitigation plans 28 5 Abatement potential 47 5.1 Sectoral abatement forecast 47 5.2 Scope 1 and 2 abatement requirements 50 6 Conclusions 54 References 55 Figures Figure 1: Comparison of economic growth forecasts for Australia and the Northern Territory’s key regional trading partners xii Figure 2: Regional CO2 emissions plotted with reference to Darwin, Northern Territory xiii Figure 3: Regional CO2 emissions within 50 km of a port with depth of 13 m or more, analysed by sector xiv Figure 4: 2030 CO2 market estimate for five key Northern Territory trading partner countries xv Figure 5: 2050 CO2 market estimate for five key Northern Territory trading partner countries xv Figure 6: Comparison of world economic growth forecasts 3 Figure 7: Comparison of economic growth forecasts 4 Figure 8: Population grouping by income, developing Asia ? note that the definition used is the cost of consumption per day (in US dollars) 6 Figure 9: Forecast size of the global middle class, by region 6 Figure 10: Comparison of economic growth forecasts for Australia and our regional trading partners 8 Figure 11: Asia-Pacific electricity generation mix, under IEA Stated Policies scenario 9 Figure 12: Electricity generation mix, South-East Asia 9 Figure 13: Historical and forecast values for China's GDP 10 Figure 14: Historical and forecast GDP growth rate for China 11 Figure 15: Historical and projected population of China, by age group 12 Figure 16: Indexed production output in selected industries in China 12 Figure 17: Historical and forecast values for Japan's GDP 13 Figure 18: Real GDP growth rate for Japan 14 Figure 19: Historical and projected population of Japan, by age group 15 Figure 20: Comparisons of primary energy self-sufficiency ratios, select countries, 2020 15 Figure 21: Historical and forecast values for Singapore's GDP 16 Figure 22: Historical and projected population of Singapore, by age group 17 Figure 23: Historical and forecast values for South Korea's GDP 18 Figure 24: Historical and projected population of South Korea, by age group 19 Figure 25: Historical and forecast values for Taiwan's GDP 20 Figure 26: Historical and projected population of Taiwan, by age group 20 Figure 27: Climate TRACE 2021 Singapore emissions 22 Figure 28: Singapore National Climate Change Secretariat 22 Figure 29: APEC Reference Case CO2 emissions projection 23 Figure 30: Rystad CCUS Screening, Singapore 2021 23 Figure 31: S&P Connect corporate emissions, Singapore 2021 24 Figure 32: Method of emissions database development 25 Figure 33: Regional CO2 point-source emissions plotted with reference to Darwin; pie chart shows distribution of emissions by industry 26 Figure 34: China’s CO2 emissions plotted by location and size; pie chart shows distribution of CO2 emissions by industry 29 Figure 35: China’s CO2 emissions filtered to those within 50 km of a port, coloured by industry type; pie chart shows distribution of CO2 emissions by industry 29 Figure 36: China’s sectoral CO2 emissions by company ? note that only the top 27 CO2 emitter companies are identified 30 Figure 37: Japan’s CO2 emissions plotted by location and size; pie chart shows distribution of CO2 emissions by industry 32 Figure 38: Japan’s CO2 emissions filtered to those within 50 km of a port, coloured by industry type; pie chart shows distribution of emissions by industry 33 Figure 39: Japan’s sectoral CO2 emissions by company ? note that only the top 27 CO2 emitter companies are identified 34 Figure 40: Singapore’s CO2 emissions plotted by location, size and industry; pie chart shows distribution of emissions by industry. Note that all CO2 emissions are within 50 km of a port. 37 Figure 41: Singapore’s sectoral CO2 emissions by company ? note that only 11 CO2 emitter companies are identified due to the limited number of companies in the emissions database 37 Figure 42: South Korea’s CO2 emissions plotted by location and size; pie chart shows distribution of CO2 emissions by industry 40 Figure 43: South Korea’s point-source CO2 emissions filtered to those within 50 km of a port, coloured by industry type; pie chart shows distribution of emissions by industry 41 Figure 44: South Korea’s sectoral CO2 emissions by company ? note that only the top 27 CO2 emitter companies are identified 41 Figure 45: Taiwan’s CO2 emissions plotted by location, size and industry; pie chart shows distribution of emissions by industry. Note that all CO2 emissions are within 50 km of a port. 44 Figure 46: Taiwan’s sectoral CO2 emissions by company ? note that only the top 23 CO2 emitter companies are identified due to the limited number of companies in the emissions database 45 Figure 47: Sector CO2 point-source emissions for the Asia-Pacific region 47 Figure 48: Sector CO2 point-source emissions within 50 km of a port for the Asia-Pacific region 48 Figure 49: Average age of existing coal-fired power plants worldwide 49 Figure 50: Age profile of Asia-Pacific production capacity for the steel sector (blast furnaces and DRI furnaces) 50 Figure 51: 2030 CO2 market estimate 53 Figure 52: 2050 CO2 market estimate 53 Tables Table 1: Summary of Singapore’s emissions data 24 Table 2: Rystad CCUS Cube point-source emissions, Asia-Pacific (March 2023) 26 Table 3: China’s top five CO2 emitters’ emissions reduction commitments 30 Table 4: Japan’s top five CO2 emitters’ emissions reduction commitments 34 Table 5: Singapore’s top five CO2 emitters’ emissions reduction commitments 38 Table 6: South Korea’s top five CO2 emitters' emission reduction commitments 42 Table 7: Taiwan’s top five CO2 emitters’ emissions reduction commitments 45 Abbreviations APEC Asia Pacific Economic Cooperation BF Blast furnace CCS Carbon capture and storage CCUS Carbon capture utilisation and storage CO2 Carbon dioxide CO2-e Carbon dioxide equivalent CSIRO Commonwealth Scientific and Industrial Research Organisation DRI Direct iron reduction EAF Electric arc furnace GDP Gross domestic product GFC Global Financial Crisis (between mid-2007 and early 2009) Gt Giga tonnes (109 tonnes) GW Gigawatt (109 watts) H2 Hydrogen IEA International Energy Agency IMF International Monetary Fund JPY Japanese Yen LCO2 Liquid CO2 LEH Low Emissions Hub LNG Liquefied natural gas MASDP Middle Arm sustainable development precinct Mt Million tonnes Mtpa Million tonnes per annum (106 tonnes per year) MW Megawatt (106 watts) NDC Nationally Determined Contribution NH3 Ammonia NOx Nitrogen oxides NT Northern Territory NT LEH Northern Territory Low Emissions Hub OECD Organisation for Economic Co-operation and Development PV Photovoltaic R&D Research and development RE Renewable energy S&P S&P Global SAM Serviceable available market SOM Serviceable obtainable market TAM Total accessible market tpa Tonnes per annum TWh Terawatt hour UK United Kingdom UNFCCC United Nations Framework Convention on Climate Change US United States of America Acknowledgments CSIRO acknowledges the Traditional Owners of the land, sea and waters, of the area that we live and work on across Australia. We acknowledge their continuing connection to their culture, and we pay our respects to their Elders past and present. The authors of this report would like to acknowledge the support and funding provided by CSIRO to undertake this work. We thank the internal CSIRO independent peer reviewers for their review of the report and valuable comments and suggestions. While this report is an output from a CSIRO-funded initiative, we would like to thank our industry and government collaborators for their insights, contributions and suggestions, which have improved the report outcomes. Although CSIRO has sought feedback from government and industry on the technical content of the report, CSIRO has sole discretion on the inclusion of this feedback. Summary The CSIRO Northern Territory Low Emissions Hub (NT LEH) CCUS business case project aims to understand the feasibility of incorporating CCUS into the Darwin Middle Arm Sustainable Development Precinct (MASDP) to enable its development as a low-emissions industrial hub to help the Territory meet its dual objectives of reducing its emissions footprint while growing the economy to $40 billion by 2030. Darwin is uniquely placed within Australia on the doorstep of Asia. In the year to September 2023 the value of the Northern Territory’s exports was $16.2 billion (NTG, 2024). Of these exports, 85.2% were energy (LNG and petroleum), with 6.4% being metalliferous ores and metal scrap. Export destinations were dominated by five jurisdictions within the region: Japan (45.9%), China (14.3%), Taiwan (13.5%), Singapore (10%) and South Korea (7.3%). These range in economic status but all have attained a high level of industrial development and require substantial energy and raw material imports. Their country demographics, industry and energy mix will impact their future dependence on the Northern Territory for energy and energy transition products. Following on from the Task 1 report (Rogers et al., 2024) ? which assessed the Northern Territory’s economy, industry and emissions ? this report provides a regional understanding of economies, industries and emissions that will provide context for future product demand from the Northern Territory. In particular, the task is focused on emissions sources and the changes required in the region to meet long-term energy needs and emissions reduction goals. After a long period of stable global economic conditions characterised by low inflation, low interest rates, strong growth and a cooperative geopolitical environment, the global economic outlook has weakened in recent years due to the outbreak of the global COVID-19 pandemic (with associated disruptions to global demand and supply chains) and the deterioration in the geopolitical environment, with the UK leaving the European Union, trade disputes with China and the outbreak of military hostilities in several regions. In the short term, risks to the global outlook remain weighted to the downside. The medium term is more positive with the current challenges expected to be transitory. Longer term, the key challenge will be how countries support growth in their economies while maintaining living standards as they seek to reach a target of net zero emissions by 2050. This will be particularly difficult for the highly populated and least developed countries. Globally, the forecast for economic growth is around 3% in the short term. This is the lowest level in over a decade. Advanced economies forecast growth is around 1.7%, with emerging and developing Asian economies growing at around 5%. Forecast economic growth in the East and South-East Asian regions is generally accepted to be around 5% in the medium term. Australia, China, Japan, Singapore, South Korea and Taiwan’s economic growth forecasts over a 5-year period from 2023 (actuals) to 2028 show a general declining growth rate profile (Figure 1). Figure 1: Comparison of economic growth forecasts for Australia and the Northern Territory’s key regional trading partners Source: International Monetary Fund (2024d) Over the longer term, there will be large demographic shifts within the region, with a general decline and ageing of population, and for some countries a slowing in the rate of growth. However, this is not expected to dramatically shift consumption patterns as the changes in the wealth of the different age segments are expected to negate the demographic changes. The forecast for future energy mix in the larger economies is generally characterised by declining fossil fuel use and increasing renewable electricity generation and use. However, in the smaller economies fossil fuel use is expected to remain flat, with demand growth being supplied by renewable energy sources. As such, there will be a strong demand to abate emissions from power generation and hard-to-abate industrial sectors over the medium to long term across the region, including in the Northern Territory’s key trading partner countries. A review of the Northern Territory’s key trading partners’ commitments and plans for emissions reduction shows aligned targets for attaining net zero by 2050 with interim targets varying in quantum. Given the energy sector is a significant contributor in all countries, there is alignment in targets of either reducing or at least stabilising production from fossil fuels with a goal to increase low-emissions generation via renewables and nuclear. A review of the major emitters in the key trading partners shows alignment with Australia’s stated emissions reduction goals. Abatement potential within the emissions sectors indicates that CCUS will be a part of the solution but will vary based on the facility, process and future plans. In particular, both coal-fired and gas-fired power plants could retrofit CO2 capture infrastructure, with the uptake likely to be site-specific, but it is expected to rise from 1?3% in 2030 to 70?100% in 2050. Iron and steel have relied on coal for about 75% of energy input (IEA, 2020b). For iron and steel manufacturers the transition to alternative production methods will be supplemented by retrofitting older operational plants with CO2 capture equipment. The cement sector will be managed via energy efficiency, alternative fuels, low-carbon clinker substitution and CCS. With forecast growth in the demand for cement aligned with economic growth, CCS will be required to provide over 50% of abatement required by the sector. To understand what emissions sources may need abatement by CO2 capture and storage, a CO2 emissions database was developed for the region, covering the five key Northern Territory trading partner countries, as well as encompassing developing markets of South and Southeast Asia and smaller nations of the western Pacific. This required a review of several emissions data sources to help validate and understand variance in the reported emissions data. The analysis of these sources identified a wide range of emissions estimation methods and therefore variance in the data. Following data review, the Rystad CCUS Cube (Rystad Energy, 2024) was selected for use due to the point-source nature of the dataset. CO2 emissions data from 2022 were assessed for quality control and augmented with country and corporate information to aid the analysis of abatement potential. This dataset is referred to as the ‘emissions database’. A workflow similar to that used by the Northern Lights project (see Task 4 report; Stalker et al. (2024)) was used, where emissions data were filtered to include emissions within 50 km of a port with a depth of 13 m or more and then IEA industrial sector decarbonisation roadmaps’ emissions reduction factors were applied to identify CO2 emissions that may be available for CCUS. This allowed estimation of the potential volumes of CO2 that may be available for shipping to the storage locations assessable via the Northern Territory CCUS hub. Figure 2: Regional CO2 emissions plotted with reference to Darwin, Northern Territory Source: Rystad Energy (2024) Within the emissions database, the Asia-Pacific region has some 10 Gt of CO2 emissions amenable to CCUS (Figure 2) that were identified. Of these, approximately 3 Gt are within 50 km of a port with a depth of 13 m or greater (Figure 3). Figure 3: Regional CO2 emissions within 50 km of a port with depth of 13 m or more, analysed by sector Source: Adapted from Rystad Energy (2024) For the Northern Territory’s five key trading partners of China, Japan, Singapore, South Korea and Taiwan there are 7.6 Gt of CO2 associated with 2022 emissions. Of these CO2 emissions, approximately 2.2 Gt are within 50 km of a port with a depth of a minimum of 13 m. When IEA sectoral emissions reduction roadmaps are applied to these CO2 emissions, it is estimated that approximately 64 Mt CO2 will be captured from these sources by 2030, increasing to 1,449 Mt CO2 by 2050. If the NT CCUS hub was able to access 5% of this market (i.e. 20 regional CCUS hubs with an equal share of the market in operation by 2030), this would represent a serviceable obtainable market of approximately 3 Mt in 2030 (Figure 4) and 72 Mt in 2050 (Figure 5). While this market estimate is based on several assumptions and is only intended to identify the possible magnitude of emissions that may be available to a Northern Territory CCUS hub, it shows that there is a significant potential market for CO2 importation. Further, more detailed analysis of the range of market scenarios would be required if the NT CCUS hub moves to the next phase of development. Figure 4: 2030 CO2 market estimate for five key Northern Territory trading partner countries TAM = total addressable market, SAM = serviceable available market, SOM = serviceable obtainable market Figure 5: 2050 CO2 market estimate for five key Northern Territory trading partner countries TAM = total addressable market, SAM = serviceable available market, SOM = serviceable obtainable market 1 Introduction As a Party to the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement, Australia has made commitments to: • reduce its greenhouse gas emissions • track progress towards those commitments • report each year on its greenhouse gas emissions. The Northern Territory’s regional neighbours and trading partners are also signatories to the Paris Agreement (United Nations, 2016). With the goal of the agreement to maintain global warming to less than 1.5°C above pre-industrial levels by the end of this century, there is the potential for the Territory to support its regional neighbours by providing emissions abatement solutions. The CSIRO Northern Territory Low Emissions Hub (NT LEH) CCUS business case project aims to understand the feasibility of incorporating CCUS into the Darwin Middle Arm Sustainable Development Precinct to enable its development as a low-emissions industrial hub to help the Territory meet its dual objectives of reducing its emissions footprint while growing the economy to $40 billion by 2030. Building on the Task1 report (Rogers et al., 2024) - which sought to understand the Northern Territory’s economy, industry and emissions ? this report provides a regional understanding and context. It is focused on developing an understanding of regional economies, industries and emission sources and the changes required in the region to meet long-term energy needs and meet emissions reduction goals. It provides an understanding of how this can impact on the CCUS business case project in the Darwin region. The report reviews the current state of the economies of the Territory’s key trading partners, their historical performance, the influence of key industrial sectors on those economies, historical emissions and possible future avoidance and abatement scenarios for these partner countries through to 2050. This report has been developed to be accessible to a general audience and to provide a summary of both CSIRO and external data and literature. Where possible, data used in the report are publicly available and data sources are cited to allow the reader to form their own judgements. As with all reports and analyses that attempt to understand future directions, these are based on analyses, scenarios and interpretations of existing data and literature. We acknowledge that there are many pathways to greenhouse gas emissions reductions, with many different perspectives on how we achieve our global net zero ambitions. The information provided herein provides one perspective among a range of future options. 2 Global economic and energy outlook After a long period of stable global economic conditions characterised by low inflation, low interest rates, strong growth and a cooperative geopolitical environment, the global economic outlook has weakened in recent years due to the outbreak of the global COVID-19 pandemic and associated disruptions to global demand and supply chains. In addition, the geopolitical environment has deteriorated, with the UK leaving the European Union, trade disputes with China and the outbreak of military hostilities in several regions. Rising inflation has also led to a rapid increase in interest rates across the globe as central banks have sought to restore price stability by imposing tight monetary policy. Inflation on services remains high, resulting in central banks maintaining high interest rates. In the short term, risks to the global outlook remain weighted to the downside. A sharp deceleration in global growth is more likely than a rapid improvement as central banks continue with tight monetary policy, conflicts around the globe put at risk global energy supplies, China (the world’s second largest economy) battles the effects of opening its economy after COVID-19 lockdowns, and food security becomes a global concern as reduced gas supplies and potash exports from Russia and Belarus threaten the global availability of fertiliser. The outlook for the global economy in the medium term is more positive, with the current challenges expected to be transitory. The current military conflicts are likely to conclude in the short term, either militarily or politically, reducing pressure on energy supplies, and supply chain restrictions are likely to ease as the impact of China’s COVID restrictions reduce and inflation begins to moderate as higher interest rates reduce inflationary pressures. Global growth is also affected by global population forecasts. While the current world population of 7.6 billion is projected to grow to 8.6 billion by 2030 and 9.8 billion by 2050, the population increases will be principally attributable to nine countries, including India and Indonesia within the region (United Nations, 2017). Slower world population growth is expected due to lower fertility rates, which will also lead to ageing populations, and this will be further increased by longer life expectancy worldwide. Longer term, the key challenge to the outlook for economic growth will be how countries support growth in their economies while maintaining living standards as they seek to reach a target of net zero emissions by 2050. This will be particularly difficult for the highly populated and least developed countries. Generally, growing global populations and higher incomes increase the demand for energy. Globally, under the IEA 2024 World Energy Outlook (IEA, 2024d) strong growth in electricity demand is forecast, driven by economic growth plus increasing electrification of end uses (e.g. electric vehicles and increasing demand for data centres). Energy demand growth slows to 0.7% from 2023 to 2030 in the IEA Stated Policies scenario and most growth will occur in emerging and developing economies. Electrification and efficiency gains will lead to a global energy demand decrease in the IEA Announced Pledges scenario and to a greater extent in the IEA Net Zero Emissions by 2050 scenario. Fossil fuels met 80% of global energy demand in 2023. Demand for oil, natural gas and coal are expected to peak by 2030 and then fall under all IEA scenarios. Within these scenarios, natural gas demand is expected to rise strongly under the IEA Stated Policies scenario but fall slightly under the Announced Pledges scenario. Nuclear power retains 10% share in all scenarios. The demand for renewable electricity is expected to grow strongly, and faster than electricity demand, under all scenarios through to 2050. Key to the energy transition are clean energy technologies: solar, wind, nuclear, electric vehicles, heat pumps, hydrogen and carbon capture. A comparison of the global economic outlook forecasts from several sources converges on a moderate growth of around 3% per annum in the short term (Figure 6). This is the lowest level in over a decade. Advanced economies forecast growth is around 1.7%, with emerging and developing Asian economies growing at around 5% (Figure 7). Figure 6: Comparison of world economic growth forecasts Source: (International Monetary Fund, 2024d; OECD, 2024b; United Nations, 2024; World Bank Group, 2022) Figure 7: Comparison of economic growth forecasts Source: International Monetary Fund (2024e) The Northern Territory’s economy is relatively well placed to navigate the current challenging global economic outlook. Demand for minerals, particularly manganese ? a key input into electric car batteries ? remains strong. Rising fertiliser prices may negatively impact the agriculture industry in the near term, although agriculture represents a relatively small part of the economy (<5%). Demand for the Territory’s LNG is expected to remain strong with the current demand for energy supplies affected by the military conflicts. 3 South-East Asian regional economic and energy outlook Forecast economic growth in the East and South-East Asian region is generally accepted to be around 5% in the medium term. The region did suffer significant setbacks with reductions in GDP in many economies because of the COVID-19 pandemic, with recovery from its effects ongoing and the added impact of the current military conflicts. The region’s economic and developmental progress is likely to be slower than expected before these setbacks. The COVID-19 pandemic had mixed impacts on the region, with an equal split of countries managing the health impacts well and not so well. With vaccination being the key to economic recovery and the rollout of fiscal packages assisting the countries to weather the financial pressures of the pandemic, the countries in this region performed better than many other middle-income countries (Walker and Rajah, 2024). Economic factors affecting growth and development include natural resources, capital formation, technological progress, entrepreneurship, human resource development, population growth and social overheads. As a result, the demographics of the region and access to natural resources (i.e. energy self-sufficiency) have been investigated to understand the potential growth. The region’s demography over the study period (2024?2050) is characterised by declining population, rising prosperity and significant ageing. The population decline, both in total terms and in the working-age group, has already started in some of the countries and is expected to accelerate by 2050 with the exception of India, Indonesia and Malaysia, which at present are still enjoying a growing working-group population, but this is expected to stabilise or even turn into a declining trend by 2050. The growth in the region’s middle-class population is expected to continue. This is identified as one of the contributing factors that will shape the market structure and trade requirements over the next decade (Ministry for Primary Industries, 2019). While traditionally middle-class growth is expected to be a major driver of demand, additionally the optimism of younger consumers and wealthy ageing consumers in emerging markets is also expected to have a significant impact on driving demand (Adams et al., 2024). While COVID-19 disrupted the expected trend of middle-class growth, as shown in Figure 8, the trend is likely to continue. Figure 8: Population grouping by income, developing Asia ? note that the definition used is the cost of consumption per day (in US dollars) Source: Asian Development Bank (2023) Globally, the majority of the middle-class growth is expected to be in the Asia-Pacific region (Kharas, 2017) (Figure 9). China’s middle-class population is expected to continue to grow, although at a slowing rate, following its population peak, which is likely to have an impact on consumer spending patterns. India is expected to be the second-largest consumer market by 2030, but it is likely that the total size of the Indian middle class will remain smaller than China’s. Malaysia and Indonesia are also undergoing significant economic development as a result of middle-class growth (Kharas, 2017). In contrast, it is expected that the middle-class growth in the fully developed Asian economies, such as South Korea and Japan, will slow and their consumption patterns will likely follow the pattern observed in other developed economies (Ministry for Primary Industries, 2019). Figure 9: Forecast size of the global middle class, by region Source: Kharas (2017) As noted, ageing is another major demographic change that will impact the region. Literature reviews show contradictory results for the correlation between ageing and macroeconomic factors, including productivity, consumption and greenhouse gas emissions. Some studies suggest that the electricity consumption per capita is likely to increase as a society ages (Inoue et al., 2022), while the transportation energy demand reduces (Lim et al., 2020). However, the overall impact of population ageing on greenhouse gas emissions is less known (Feng et al., 2023). The Asian Development Bank has analysed the consumption patterns of several developing Asian economies and those elsewhere in the world (Estrada et al., 2011). Its findings indicated that there is no significant correlation between the old-age dependency and consumption over time in 10 major Asian economies. It examined the impact of the old-age dependency ratio on the share of aggregate consumption in national income using data from 153 economies, controlling for other variables such as per capita income, and concluded: • in developed countries there is a positive relationship between old-age dependency and consumption, a result that was consistent with the findings of other studies • evidence of a negative relationship for the developing Asian countries • a positive relationship above a specific level of the old-age dependency ratio. According to the Asian Development Bank, one simple way of interpreting the data is that developing Asia, despite rapid population ageing, was still relatively young at the time of the study period (1998?2007). It speculates that the results can also be interpreted as an indicator of a threshold dependency ratio. Below the threshold, population ageing does not have a major impact on consumption. However, when the threshold is exceeded, population ageing has a positive impact on consumption. The findings are also supported by other studies (Lee and Mason, 2011). Although demographic changes in the region are expected to be substantial, these results may suggest that population ageing in developing Asia, especially in economies in the early stages of ageing, may not materially impact consumption and domestic demand. Within the region the range in economic status also impacts the commitments to energy transition and the demand for products and services from the Northern Territory. In the East Asian region, China has made a commitment to reduce emissions from power generation, and increase renewable energy and hydroelectric power. More specifically, its net-zero pathway will derive more than 80% of its energy from non-fossil fuels by 2060, which requires coal, oil and gas consumption to peak by 2025, 2030 and 2035, respectively, energy efficiency to continue to improve up to 2035 and CCUS to scale up. Taiwan has published a ‘Pathway to Net-Zero Emissions in 2050’, which aims to promote technology R&D and innovation in key areas. South Korea has a commitment to carbon neutrality by 2050, but in 2021 imported more than 92% of its energy (Herbert Smith Freehills, 2024). In the South-East Asian region, Malaysia has made a commitment to decrease greenhouse gas emissions intensity per unit of GDP by 45% by 2030 compared with the 2005 level and a further reduction of 60% by 2035 (SEDA Malaysia, 2021). Indonesia has a target of net zero emissions by 2060 or sooner. However, it is balancing the growth required to achieve its goal to become an advanced economy by 2045 against emissions reductions (IEA, 2022a) integrated with an NDC target of reducing emissions by 29% by 2030 (UNFCCC, 2015). Malaysia and Indonesia have a strong commitment to CCS and have actively worked to put in place the regulatory frameworks to ensure both a strong domestic CCUS industry and imports. Indonesia has regulated that contractors and storage operation permit holders must reserve 70% of their CO2 storage capacity for domestic emissions (Deloitte Legal, 2024). 3.1 Key trading partners’ economic and energy outlook In the year to September 2023, the value of the Northern Territory’s exports was $16.2 billion (NTG, 2024). Of these exports, 85.2% were energy (LNG and petroleum), with 6.4% being metalliferous ores and metal scrap. Exports were dominated by five jurisdictions within the region: Japan (45.9%), China (14.3%), Taiwan (13.5%), Singapore (10%) and South Korea (7.3%). While the countries are all highly industrialised, the maturity of their development and potential for GDP growth is varied. As a result, their individual demographics, industry and energy mix will impact their dependence on the Northern Territory for energy and energy transition products. Australia, China, Japan, Singapore, South Korea and Taiwan’s economic growth forecasts over a 5-year period from 2023 (actuals) to 2028 are shown in Figure 10 (International Monetary Fund, 2024g). While growth is forecast in each of these economies over this period, with a slow increase in growth flattening in Australia and Singapore, Japan and South Korea will have a slow decline in projected growth, and the economies of China and Taiwan will have a sharper decline in projected growth. More detailed analysis of the trading partners’ economies is included in the following sections. Figure 10: Comparison of economic growth forecasts for Australia and our regional trading partners Source: International Monetary Fund (2024g) The forecast of the future energy mix for the Asia-Pacific region under the IEA Stated Policies scenario (IEA, 2022c) is generally characterised by declining fossil fuel use and increasing renewables in the larger economies, but in the smaller economies fossil fuel use is expected to remain flat with demand growth being supplied by renewable energy sources (Figure 11). This aligns with forecasts by other notable organisations, with the IRENA forecast for South-East Asia included in Figure 12 (IRENA, 2022) and the ASEAN Centre for Energy forecasting a substantial shift towards renewable energy, particularly solar and wind (ACE, 2024). Figure 11: Asia-Pacific electricity generation mix, under IEA Stated Policies scenario Source: IEA (2022c) Figure 12: Electricity generation mix, South-East Asia Source: IRENA (2022) 3.1.1 China China’s GDP is approximately US$18 trillion (~A$29 trillion) and has gone through an extended period of almost exponential growth since the 2000s, with limited fluctuations (Figure 13). The economy has rebounded strongly from the COVID-19 shock, and it is forecast to continue its growth despite the risks associated with rising corporate debt (OECD, 2022a). However, the IMF is forecasting a declining GDP growth rate in the near term (Figure 14). From an annual growth rate of around 10% between the early 1990s and 2010, the rate has declined to the current 4.8% and is forecast to decline to around 3% in the next 5 years, below the Chinese government’s target of 5% (Australia Government, 2024). Figure 13: Historical and forecast values for China's GDP Source: International Monetary Fund (2024f) Figure 14: Historical and forecast GDP growth rate for China Source: International Monetary Fund (2024c) China’s economy is driven by services, industry and manufacturing, and the agricultural sector. These sectors rely on a sufficient workforce for growth. China’s population growth rate has been moderating for years as a result of the One-Child Policy (which was in force between 1980 and 2016), rapid urbanisation and the natural decline in population growth that occurs with increasing average income. Based on data from the National Bureau of Statistics of China, the population peaked in 2022 with 1.41 billion people and has been in decline since (Master, 2024). China’s population is expected to age at a rate faster than that of many other countries, with the old-age dependency ratio1 forecast to increase from 18% to close to 50% in 2050. In comparison, the ratio for Australia is forecast to increase from just under 30% to 41% in 2050 (OECD, 2022b). The rate of ageing of the population, plotted in Figure 15, will have an impact on the workforce available to maintain the country’s economic growth. At present there is a weakness in the property sector, which has resulted in a slowdown in the construction industry. This has impacted some industries, while others are booming due to increasing global demand. In particular, the global demand for products that support the energy transition, such as batteries and photovoltaic cells, has been increasing (Figure 16). Figure 15: Historical and projected population of China, by age group Source: United States Census Bureau (2024b) Figure 16: Indexed production output in selected industries in China Source: IEA (2024b) China is a net energy importer, with ~22% of the total energy supply in 2021 imported (IEA, 2021b). In 2021, the share of coal in power generation was 63%, with a recent wave of new coal projects resulting in the average age of power plants being just 13 years (IEA, 2021a). Hydropower is the second largest source of electricity generation, but with a varying share impacted by the recent droughts (IEA, 2021b; 2024b). While China is the largest renewable energy developer in the world, its renewables’ share remained relatively small at 15% of total electricity generation in 2022 (China Daily, 2024). In 2023-2024 China installed more renewable capacity than the rest of the world combined with growth in solar installation now exceeding wind owing to increasing rooftop installations. Despite the growth in renewables installations, not all of this has been fully available to the grid, and a parallel increase in thermal generation led to a 6.2% increase in electricity sector emissions. Renewable and nuclear energy sources are expected to meet almost all of the increase in electricity demand in the period 2024?2026 and to start displacing coal-fired generation, reducing its share from 62% in 2023 to 51% in 2026 (IEA, 2024b), and coal-fired plants are expected to change from base load to flexible operation in the future. However, given that the average age of those power plants is currently a third of the average plant life, their emissions management will require fuel substitution or CCUS. 3.1.2 Japan After a long period of growth from 1980 to 1996, Japan’s GDP has been fluctuating in response to domestic and international factors including the Global Financial Crisis (GFC), earthquakes, tax policies and COVID-19. Japan’s GDP is currently around US$4,000 billion (approximately A$6,429 billion) after hitting its maximum in 2012. A modest recovery is forecast by the IMF (International Monetary Fund, 2024a) for the period 2023?2028 (Figure 17), with a declining GDP growth rate of under 1% forecast for the same period (Figure 18), significantly lower than for many of its regional neighbours. Figure 17: Historical and forecast values for Japan's GDP Source: International Monetary Fund (2024a) Figure 18: Real GDP growth rate for Japan Source: International Monetary Fund (2024b) Japan has a well-developed and highly diversified manufacturing and service economy and is one of the largest producers of motor vehicles, steel and high-technology manufactured goods (e.g., consumer electronics). Exports account for approximately 16% of GDP. The emphasis on trade is driven by Japan’s lack of natural resources to feed the industrial economy, notably fossil fuels and most minerals. With an economy dominated by the service sector, the country’s population demographics are key to growth forecasts. Japan’s population is around 124 million and has been steadily declining since reaching its peak in 2008. Figure 19 illustrates the relative growth in the 65+ age group over the period 1990 to 2050, which shows that Japan is the oldest nation in the world and is expected to remain so, with its old-age dependency ratio of 50% projected to increase to 80% in 2050 (European Parliament, 2020). Figure 19: Historical and projected population of Japan, by age group Source: United States Census Bureau (2024b) Japan is one of the least self-sufficient countries in producing its own primary energy, given its lack of natural resources (Figure 20). It is highly dependent on importing fossil fuel for energy and electricity, a dependency that increased after the 2011 Great East Japan Earthquake (METI, 2023b) caused major infrastructure damage, notably to the Fukushima Daiichi Nuclear Power Plant. After the earthquake, all nuclear power plants were closed, despite the plan prior to 2011 to increase nuclear power from ~30% of the country’s electricity in 2011 to 50% by 2030. The current aim is for nuclear power to account for ~20% of the country’s electricity by 2030 (World Nuclear Association, 2024). Figure 20: Comparisons of primary energy self-sufficiency ratios, select countries, 2020 Source: METI (2023b) In 2023, two-thirds of Japan's total energy supply was produced from oil, gas and coal (IEA, 2023a). Gas, imported from the Asia-Oceania region (Australia, Malaysia, Qatar, Russia and Indonesia) as LNG, represents 23% of the required energy. Australia is a major supplier of coal to Japan, which contributes 26% of total energy. Oil has been declining in contribution but remains the highest energy source at 38% of total energy supply. Despite a noticeable increase in Japan’s supply of renewables (including hydro and biofuels) over the period 2010?2012, they constituted a 9% share of total energy supply in 2023. While Japan’s lack of natural resources poses challenges in producing its energy requirements, some studies suggest that the nation can still benefit significantly from renewable energy sources (Cheng et al., 2022). A modest electricity demand increase is forecast, which is expected to be met by the growth in nuclear and renewables, reducing coal and gas generation’s share in the coming years. Japan is targeting a 1% share for hydrogen and ammonia in its power generation mix by 2030 (METI, 2023b). 3.1.3 Singapore Singapore has evolved from a poor post-colonial city state to one of the countries with the highest per capita GDP in the world (Mindur, 2020). In 2022, Singapore’s GDP was around US$500 billion (approximately A$804 billion). Singapore’s economy is characterised by a stable political environment, favourable business conditions and well-developed infrastructure. The economy has recovered sharply from the COVID-19 pandemic and is forecast to continue its growth in the period 2024?2028 (Figure 21), albeit at a flatter rate of around 2%. Figure 21: Historical and forecast values for Singapore's GDP Source: International Monetary Fund (2024a) Singapore’s economy is dominated by the service (>70%) and industrial (~25%) sectors. The service sector is dominated by professional and business services, banking and finance, international trade, real estate and telecommunications, all of which rely on a sufficient workforce. Manufacturing of high technology goods (electronics, scientific instruments, etc.) and pharmaceuticals comprises a large component of the high value industries and the nation, which staddles global shipping routes is the fifth largest exporter of refined oil and ranked 10th globally for chemical exports. Singapore’s population has undergone relatively steady growth in the past decades, but the rate of growth is expected to slow, with some sources forecasting the peak in late 2030s (Figure 22). Similar to many other Asian countries, population ageing is one of the main issues and some sources indicate that it will be one of the oldest nations in 2050 (United Nations, 2023). The old-age dependency ratio is forecast to increase from 27% in 2021?2030 to 54.4% in 2040?2050 (Park and Shin, 2023). Figure 22: Historical and projected population of Singapore, by age group Source: United States Census Bureau (2024b) Total energy supply is dominated by oil (70%) and natural gas (27%). Natural gas’s share has been increasing in the energy mix and electricity generation is now almost entirely based on natural gas (94% in 2021), which has replaced diesel (IEA, 2021c). Despite recent sharp growth in renewables, they accounted for just 1% of Singapore’s energy supply in 2021 (IEA, 2021c). The country’s small size, high urban density, low wind speeds, relatively flat land and lack of geothermal resources make it difficult to use alternative energy options such as nuclear, hydroelectric, wind or geothermal power (Singapore Ministry of Sustainability and the Environment, 2019). Singapore has entered the market for low-carbon electricity, importing electricity from other countries in the region. In June 2022, Singapore began importing up to 100 MW of renewable energy from existing hydropower plants in Lao PDR for a two-year period under the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (Signapore Ministry of Trade and Industry, 2022). In July 2022, Singapore’s Energy Market Authority requested proposals for importing up to 4 GW of electricity into Singapore. The Conditional Approvals granted include 1 GW from Cambodia, 2 GW from Indonesia and 1.2 GW from Vietnam (Energy Market Authority, 2024). 3.1.4 South Korea South Korea’s industrialisation and economic growth since the 1960s have been rapid and it is considered an advanced economy with the 13th largest GDP of US$1.67 trillion (approximately A$2.68 trillion) in 2022 (Investopedia, 2024). GDP passed US$1 trillion (approximately A$1.60 trillion) in 2006 and, despite several periods of fluctuations, has been growing and is forecast to continue to grow (Figure 23); however, the rate of growth is expected to stabilise in the short term at around 2%. Figure 23: Historical and forecast values for South Korea's GDP Source: International Monetary Fund (2024a) South Korea’s economy is dominated by the service (58%) and industrial (34%) sectors (electronics, telecommunications, vehicle manufacture, chemicals, shipbuilding and steel), with only a small amount from agriculture. The service sector employs 70% of the workforce. The industrial sector employed 25% of the workforce in 2021, and it has been the major source of economic progress for the country. While South Korea has some natural resources and produces anthracite, coal, iron ore, graphite, gold, tungsten, silver, lead and zinc, production is insufficient for its industrial sector demand (Herbert Smith Freehills, 2024). South Korea is one of the least self-sufficient countries in producing its own primary energy needs, and imported 92% of its energy requirements in 2021 (Herbert Smith Freehills, 2024). Electricity is generated from a combination of coal (33%), natural gas (29%) and nuclear (28%). Other sources, including renewables, currently account for a small proportion of production. However, the planned generation additions are predominantly nuclear and renewables, which are forecast to replace some of the coal and gas capacities. Emissions from power generation are around 50% of South Korea’s total emissions, providing an opportunity to reduce emissions by shifting to lower emissions technologies (IEA, 2022b). South Korea’s population is estimated to have already reached its peak of more than 51 million, but it is going through a demographic crisis, with the lowest birthrate in the world (0.72) and a prospect of extreme population ageing (Statistics Korea, 2024). The population structure has transformed rapidly over the past generation and it is forecast to be one of the oldest countries in the world, with the old-age dependency rate increasing to more than 80% by 2050 (OECD, 2024a)(Figure 24). The rate and extent of the projected demographic changes will likely have significant impacts on its economic performance, due to the importance of labour resource utilisation to the economy (OECD, 2022b). Figure 24: Historical and projected population of South Korea, by age group Source: United States Census Bureau (2024b) 3.1.5 Taiwan Taiwan’s GDP growth rate is 3%, close to the projections for many advanced economies. Taiwan’s GDP peaked at almost US$800 billion (approximately A$1,285 billion) before dipping due to the COVID-19 impact, and has experienced an extended period of growth with several short-term fluctuations (Figure 25). GDP growth is expected to remain at over 2% for the foreseeable future (International Monetary Fund, 2024a). Taiwan’s economy is primarily driven by the service industry and it has developed significant, export-focused industries in semiconductors and electronics. The service sector accounts for 60% of GDP and employs a similar percentage of the workforce. In 2022, Taiwan imported close to 95% of its net energy demand, with electricity mainly generated from coal (42%) and natural gas (39%), and nuclear having an 8% share (IEA, 2024a). Despite recent sharp increases in solar and wind power, their contribution to electricity demand is still small. Natural gas has been providing an increasing proportion of electricity. The population of Taiwan is around 23 million (Worldometer, 2024) and is expected to peak before 2030 and undergo significant ageing (National Development Council, 2022; United States Census Bureau, 2024a) (Figure 26) . In 2022 people aged 45?64 comprised almost half of the working-age population. Figure 25: Historical and forecast values for Taiwan's GDP Source: International Monetary Fund (2024a) Figure 26: Historical and projected population of Taiwan, by age group Source: United States Census Bureau (2024b) 4 CO2 sources and mitigation plans To help understand the size of the potential CCUS market in the region and therefore the opportunity for CO2 importation as a component of the Northern Territory CCUS hub, an assessment of regional sources of CO2 was undertaken. The area considered extends beyond the five key trading partners to encompass South Asia, Southeast Asia and Western Pacific nations. To be able to undertake the assessment, point-source emissions, locations and responsible sectors were required. Whereas there is mandatory reporting for Australian emissions and they are publicly available via the Clean Energy Regulator, the Asia-Pacific region contains many jurisdictions with a variety of regulations regarding the collection and reporting of emissions information. As a result, CSIRO first assessed the quantity and quality of the emissions data that were available for the region to establish the ‘emissions database’ to be used for further analysis. 4.1 Method The following sources of emissions data were assessed to understand the source inclusions and quality of the data: 1. Climate TRACE (Climate Trace, 2024) 2. APEC (APEC, 2022) 3. national government reporting 4. Rystad CCUS Cube (Rystad Energy, 2024) 5. S&P (S&P Global, 2024). The following data for Singapore emissions in 2021 are provided to illustrate the process and analysis. Figure 27 is a screenshot of the Climate TRACE data for a total of 140 Mt CO2-e emissions. The data are for CO2-e and while this excludes emissions from the Forestry and Land Use Change sectors, it does include the Agriculture and Transportation sectors. Figure 28 is a screenshot of the Singapore Government’s National Climate Change Secretariat data for a total of 53.7 Mt CO2-e emissions. These data provide both primary and secondary allocations to sectors and specifically exclude hydrofluorocarbons. Figure 29 illustrates the APEC Reference Case projected emissions of 48.5 Mt CO2-e. The screenshots of the carbon emissions addressable by CCUS included in the Rystad and S&P databases in Figure 30 and Figure 31, show a reduced dataset that does not include the Transport, Buildings, Agriculture and Own Use sectors. A summary of the emissions data collated for Singapore by sector is included in Table 1. Figure 27: Climate TRACE 2021 Singapore emissions Source: Climate Trace (2024) Figure 28: Singapore National Climate Change Secretariat Source: NCCS (2021) Figure 29: APEC Reference Case CO2 emissions projection Source: APEC (2022) Figure 30: Rystad CCUS Screening, Singapore 2021 Source: Rystad Energy (2024) Figure 31: S&P Connect corporate emissions, Singapore 2021 Source: S&P Global (2024) Table 1: Summary of Singapore’s emissions data CO2-e (Mt) Climate TRACE Singapore National Climate Change Secretariat APEC Rystad CCUS Cube (CO2) S&P Connect corporate emissions Power 23.62 21.05 21.5 12.33 21.1 Own Use 5.22 0.54 5.5 Not incl. Not incl. Industry 35.52 23.84 14.2 13.95 7.0 Transport 64.96 7.64 6.7 Not incl. Not incl. Buildings 0.61 0.48 0.6 Not incl. Not incl. Agriculture 0.02 Not incl. 0.0 Not incl. Not incl. Other 9.87 0.11 Not incl. Not incl. Total 139.82 53.7 48.5 26.28 28.1 An analysis of the different data sources identified that for Climate TRACE, its Transport sector includes allowances for all international shipping and international aviation, which allocates half of the emissions to the port of departure and half to the port of arrival of the ships or flights. This is not a method employed by any other emissions data sources and results in 48.5 Mt CO2-e for international shipping and 4.0 Mt CO2-e for international aviation, significantly more than other data sources. The Climate TRACE, Singapore Government and APEC data sources were only available at a sector level of resolution and therefore could not be mapped and analysed further. Both the Rystad and S&P databases only include point-source emissions considered addressable by CCUS and therefore do not include the Transport, Agriculture, Buildings, Forestry or Land Use Change or Own Use sectors. The differences between the Rystad and S&P databases are Rystad reports CO2 rather than CO2-e and also in the treatment of power and industry: in the S&P database, emissions associated with power generation for industrial processes within industrial facilities are separated, whereas in the Rystad database they are classified as part of the industrial process emissions at the facility level. As a result of this initial analysis, the emissions database chosen for use in this report is from the Rystad CCUS Cube because of the level of detail and ability to map, categorise and filter, and because the facility-level emissions are not segmented, and the data are based on CO2 emissions only and not the sum of all other greenhouse gas emissions including CO2. The dataset was assessed to ensure no duplicate entries, and the data have been augmented with corporate information for large emitters to support emissions categorisation and determination of abatement potential. Emissions were filtered to those within 50 km of a port with a depth equal to or greater than 13 m, as it is estimated that this would be a viable distance for pipeline transportation of captured CO2 and the depth is important to allow access to large LCO2 vessels (Task 8 report; Tocock et al. (2024)). This is to understand the potential volumes of CO2 for shipping to the storage locations assessable via the Darwin hub. Figure 32 shows the workflow used. Figure 32: Method of emissions database development 4.2 Regional CO2 sources and mitigation plans Regional CO2 emissions within the emissions database were plotted with reference to distance from the MASDP (Figure 33). The emissions have been analysed by location and sector. These emissions total ~10 Gt and are dominated by China at 65% and India at 13% (Table 2). The highest sector emissions come from coal-fired power generation (55%), with 90% of emissions in the region from coal- and gas-fired power generation and the production of iron, steel and cement (Figure 47). Given that many countries in the region are categorised as developing, their economic growth will impact both emissions growth and abatement potential. Figure 33: Regional CO2 point-source emissions plotted with reference to Darwin; pie chart shows distribution of emissions by industry Source: Adapted from Rystad Energy (2024) Table 2: Rystad CCUS Cube point-source emissions, Asia-Pacific (March 2023) Source: Rystad Energy (2024) Country Emissions (Mtpa) Top sectors Australia 171.1 Coal power, gas power, aluminium Bangladesh 43.5 Coal power, gas power, oil power Brunei 5.8 Oil and gas production, refining, coal power Cambodia 8.1 Cement, coal power China 6,449.5 Coal power, iron and steel, cement India 1,291.9 Coal power, iron and steel, cement Indonesia 247 Coal power, cement, iron and steel Japan 572.1 Coal power, gas power, iron and steel Laos 10.7 Coal power, cement Malaysia 125.3 Coal power, gas power, cement, oil and gas production Myanmar 11.0 Coal power, cement New Caledonia 0.7 Oil power New Zealand 8.6 Other chemicals, coal power, gas power Pakistan 76.7 Cement, coal power, gas power Philippines 69.5 Coal power, gas power, cement Singapore 28.8 Gas power, refining South Korea 384.3 Coal power, iron and steel, gas power Sri Lanka 2.8 Oil power, cement, refining Taiwan 177.9 Coal power, gas power, iron and steel Thailand 109.4 Gas power, cement, coal power Timor Leste 0.9 Oil power Vietnam 211.1 Coal power, cement, iron and steel Other 163.4 Total 10,007.1 The emissions and commitments of the Northern Territory’s top trading partners are included in section 4.3. Detailed analysis of emissions from other regions of Australia have not been included here as it is assumed that low-emissions hubs are likely to be established in other key Australian locations to manage emissions from these regions (APPEA, 2023; Loughrey et al., 2023). However, in regions where CO2 storage is not available, the opportunity to transport captured CO2 to the Northern Territory CCUS hub via LCO2 shipping may be considered. Where other low-emissions hubs are established, reciprocal agreements may be implemented to manage CO2 capacities, similar to those being instigated between CCUS hubs in Europe (see Task 4 report: Stalker et al. (2024)). Both scenarios represent potential additional market opportunities for the Northern Territory CCUS hub. While not the focus of this report, the emissions database includes significant emissions from India where the target is to reduce emissions intensity in relation to GDP by 45% by 2030 with a long-term goal of reaching net zero by 2070. India’s NDC target is to achieve 50% cumulative electric power installed capacity from non-fossil fuel by 2030. This represents a large potential CO2 market. Indonesia has NDC targets to reduce emissions by 32% by 2030 and reach net zero by 2050. The energy sector is dominated by coal electricity generation and is set to become the largest contributor to greenhouse gas emissions by 2030. The government is creating policies to expedite energy transition and promote investment in renewables with subsidies and investment. Its renewable energy target for 2030 is 44% as a part of the Just Energy Transition Partnership (JETP). At the same time, Indonesia is positioning itself for CCS to play a significant role in decarbonisation and has legislated that 70% of capacity be reserved for domestic use. There is also strong interest in CO2 importation, with Indonesia being an active member of the Asia CCUS Network (for further information, see the Task 10 report). Malaysia has an NDC target of a 45% reduction in carbon intensity against GDP by 2030 compared with 2005 levels and seeks to achieve net zero greenhouse gas emissions by 2050. The National Energy Transition Roadmap issued in August 2023 estimates that a CCS capacity of 15 Mtpa will be onstream by 2030 and will grow to 40 Mtpa by 2040. In 2021, Malaysia announced a target of 31% renewable capacity by 2025, growing to 40% by 2035. Malaysia also has interest in CO2 importation, for example from Singapore (EDB Singapore, 2024) ? for further information, see the Task 10 report. 4.3 Key trading partners’ CO2 sources and mitigation plans The Northern Territory’s key trading partners are analysed separately in the following subsections. Together, they account for 76% of emissions in the region. 4.3.1 China Two climate goals were announced by President Xi Jinping at the 75th session of the United Nations General Assembly in September 2020: to reach its carbon emissions peak before 2030 and to become ‘carbon neutral’ before 2060. A range of policy and planning documents and guidance papers, both at the national and subnational level, have been issued to support achieving the two goals (NDRC, 2021; UNFCCC, 2021). In February 2024, the government announced policies to promote the large-scale deployment of CCUS and other low-carbon technologies (Global CCS Institute, 2024b). From the database, CO2 emissions for China (excluding Taiwan) have been plotted (Figure 34). Initial analysis shows China’s CO2 emissions to be regionally significant at ~6.5 Gt of CO2 with ~90% coming from just three sectors (coal-fired power production, iron and steel processing, and cement production). This reflects China’s economic growth over the last decades being dominated by industrial development. While coal-fired power generation dominates China’s CO2 emissions, it also has the world’s highest renewable capacity installed at 1453.7 GW (IRENA, 2024), which amounts to 50% of its electricity capacity. Figure 34: China’s CO2 emissions plotted by location and size; pie chart shows distribution of CO2 emissions by industry Source: Adapted from Rystad Energy (2024) Filtering the emissions to those within 50 km of a port reduces this to ~1.2 Gtpa that potentially could be addressed by the LCO2 shipping export market (Figure 35). Figure 35: China’s CO2 emissions filtered to those within 50 km of a port, coloured by industry type; pie chart shows distribution of CO2 emissions by industry Source: Adapted from Rystad Energy (2024) Further analysis of the emissions to identify the companies with the highest emissions and review their abatement plans is included in Figure 36 and Table 3. The most energy-intensive commodities — steel, cement and non-ferrous metals — are predominantly produced for the domestic market (Centre for Reseach on Energy and Clean Air, 2023). The top five emitters are committed to the national policy of dual CO2 emissions reduction goals of CO2 emissions peaking by 2030 and carbon neutrality by 2050. While power generation emitters have a large portfolio of coal-fired power plants, they are committed to increasing their clean/renewable energy capacities. Industry and manufacturing are similarly committed to the dual CO2 emissions reduction goals and undertaking renewable energy projects to reduce their carbon footprints. Large manufacturers are also expanding to products that support the energy transition, which include glass for photovoltaic cells, wind turbines and batteries. Figure 36: China’s sectoral CO2 emissions by company ? note that only the top 27 CO2 emitter companies are identified Source: Adapted from Rystad Energy (2024) Table 3: China’s top five CO2 emitters’ emissions reduction commitments JJ Core business 2030 2050 China Energy Investment Power generation CHN Energy website Target Carbon peaking Carbon neutrality Renewable energy Develop clean energy – green and low-carbon and efficient energy system China Huaneng Group Power generation 2021 Sustainability Report Target Green transition focusing on the application of low-carbon clean energy Renewable energy Green development with hydropower, wind, solar, nuclear to increase the proportion of low-carbon and clean energy China Huadian Group Power generation 2022 Sustainability and ESG Report Target Carbon peaking Carbon neutrality Renewable energy Carbon asset trading New power system to build a clean, low-carbon, safe and efficient system China Dantang Power generation Sustainable Development Report 2022 Target Carbon peaking Carbon neutrality Renewable energy Installed clean energy capacity >50% from hydropower, wind power, solar power Thermal power Continued coal-fired power, gas-fired power, nuclear power CNBM Building materials Sustainability Report 2022 Target Carbon peak Carbon neutrality Energy Carbon reduction, carbon sequestration and carbon management Manufacturing CCS for glass manufacturing 4.3.2 Japan Japanese emissions published by the government for the 2022 financial year (1 April 2021 to 30 March 2022) are 1,135 Mtpa of CO2-e, including negative emissions from forestry of 50.2 Mtpa of CO2-e (NCCS, 2024). Point source CO2 emissions for Japan in the emissions database are 572.1 Mtpa (Figure 37). Filtering these further to emissions within 50 km of an existing port, 542.6 Mtpa are potentially addressable for LCO2 export (Figure 38). Japan has set goals to reduce greenhouse gas emissions by 46% by 2030 compared with 2013 levels and to reach carbon neutrality by 50% (World Economic Forum, 2023). To achieve this, the Green Growth Strategy outlines the current status and challenges of 14 specified fields that are expected to grow (METI, 2020). As a part of the strategy, a Green Innovation Fund of about JPY 2 trillion (approximately A$20 billion) was created to assist decarbonisation projects targeting areas such as storage batteries, offshore wind power, next-generation solar cells, hydrogen and carbon recycling. Further, the Japanese Government supports co-firing of ammonia in coal-fired power plants as a climate mitigation strategy. The Japanese Government is working to establish advanced business models to support CCS with the goal of starting CCS projects by 2030. The government has a target of 13 Mtpa of CO2 storage by 2030 enabled through nine nominated CCS projects (JOGMEC, 2024; METI, 2023a). These comprise five domestic projects and four international projects. Japan has led the establishment of the Asia CCUS Network to facilitate collaboration and ensure the successful development and deployment of CCUS in the Asian region (Asia CCUS Network, 2024). In May 2024, the National Diet passed the CCS Business Act, which grants the Ministry of Economy, Trade and Industry the ability to identify and operate permitting systems for CO2 storage (Global CCS Institute, 2024b). In February 2024, the Japanese Government also launched a US$130 billion climate bond initiative (approximately A$209 billion), which will be used to decarbonise the industrial sectors of Japan and of which 20% is expected to be made available for CCS projects. Figure 37: Japan’s CO2 emissions plotted by location and size; pie chart shows distribution of CO2 emissions by industry Source: Adapted from Rystad Energy (2024) Figure 38: Japan’s CO2 emissions filtered to those within 50 km of a port, coloured by industry type; pie chart shows distribution of emissions by industry Source: Adapted from Rystad Energy (2024) Sector analysis of the emissions show that coal and gas power and iron and steel manufacturing are Japan’s top emitters. Further analysis of the sector emissions and a review of the top corporate emitters’ commitments are included in Figure 39 and Table 4. The abatement commitments in the power sector include retiring inefficient coal power plants, co-firing coal power plants with ammonia and installing new renewable power plants. The iron and steel sector, in addition to looking for technical development and efficiencies to reduce energy demands, is also looking to alternative fuels to reduce emissions. Figure 39: Japan’s sectoral CO2 emissions by company ? note that only the top 27 CO2 emitter companies are identified Source: Adapted from Rystad Energy (2024) Table 4: Japan’s top five CO2 emitters’ emissions reduction commitments JJ Core business 2030 2050 JERA Power generation JERA Group Corporate Communication Book 2022 Target 20% reduction zero emissions Renewable energy Offshore wind power projects and storage batteries Thermal generation Shut down inefficient coal power plants NH3 20% co-firing demonstration Hydrogen co-firing demonstration CO2 emitted is 100% offset JFE Steel Steel JFE Group Sustainability Report 2023 Target 30% reduction cf 2013 Carbon neutrality Renewable energy Offshore wind power projects and storage batteries Thermal generation Achieve 50% of the reduction from energy conservation and technological development CO2 emitted is 100% offset Nippon Steel Steel Nippon Steel Sustainability Report 2022 Target 30% reduction cf 2013 Carbon neutrality Renewable energy H2 in blast furnace, large Electric Arc Furnace -> transition Participate in 3 CCS projects led by JOGMEC Tohuku Power generation Tohoku Electric Power Group Sustainability Report 2022 Target 50% reduction cf 2013 Carbon neutrality Renewable energy Maximum renewable energy plus nuclear Thermal power Decarbonise thermal power - biomass in coal - mix H2 and NH3 Electricity - heat pumps - Renewable Energy business J Power Power generation J-Power Group Integrated Report 2022 Target 40% reduction Net zero emissions Retire inefficient and obsolete plants Replace with H2 and introduce mixed combination of NH3 and biomass 4.3.3 Singapore Singapore’s total emissions were 58.6 Mt of CO2-e in 2022 (NCCS, 2024). Within the project emissions database, Singapore’s CO2 emissions of 28.8 Mtpa (Figure 40) are dominated by gas power generation and refining. As a small nation covering just 728 km2 it is recognised that Singapore does not have the natural resources, land area and climatic conditions for large-scale renewable energy installation. Singapore announced in October 2022 that it would raise its national climate target to achieve net zero emissions by 2050 as part of the long-term Low-Emissions Development Strategy (LEDS). The 2030 NDC is to reduce emissions to around 60 Mt of CO2-e in 2030 after peaking earlier. As a result, Singapore has a stated policy of renewables reaching 40% of electricity generation by 2035, increasing from 4% in 2022. The strategy includes partnering and grants to catalyse transformation, investing in low-carbon technology (CCS, hydrogen and solar and energy storage), pursuing effective international cooperation (carbon markets and regional green power grids) and adopting low-carbon practices. A carbon tax is a key incentive for the transition and was introduced in 2019. Supporting the strategy is the Singapore Green Plan 2030, which was launched in February 2021 (Green Plan, 2024) and provides additional granularity to the nation’s target to achieve net zero (see the Task 10 report). Analysis of the sector CO2 emissions and a review of the top corporate emitters’ commitments are included in Figure 41 and Table 5 are all centred on reduction of emissions via both renewables and CCS, which aligns with the national objectives. Figure 40: Singapore’s CO2 emissions plotted by location, size and industry; pie chart shows distribution of emissions by industry. Note that all CO2 emissions are within 50 km of a port. Source: Adapted from Rystad Energy (2024) Figure 41: Singapore’s sectoral CO2 emissions by company ? note that only 11 CO2 emitter companies are identified due to the limited number of companies in the emissions database Source: Adapted from Rystad Energy (2024) Table 5: Singapore’s top five CO2 emitters’ emissions reduction commitments Company Core business 2030 2050 ExxonMobil Refining Emissions reduction plans and progress, January 2024 Target 20?30% reduction in greenhouse gas intensity 40?50% reduction in upstream intensity 70?80% corporate-wide methane intensity 60?70% corporate flaring intensity Net zero Renewable energy Electrify operations Low-carbon power Upgrade equipment Deploy technology Shell Refining Shell Sustainability Report 2022 Target 50% reduction in emissions Net zero emissions Renewable energy Offshore wind, solar, biofuels, hydrogen, CCS Thermal energy Thermal efficiency in LNG plants CCS Marubeni Gas power Sustainable Development Report 2024 Targets Halve scope 1 and 2 emissions and reduce scope 3 emissions by 20% Net zero Thermal energy Halve the coal-fired power generation business by 2030 and absorb CO2 through forests First Pacific Gas power Environmental and Social Governance Report 2023 Target Varies by sector ? generally reduce emissions intensity, reduce energy consumption Renewable energy Increase share of renewable energy Thermal energy Efficiency and technical upgrades Achieve coal-free electricity production YTL Gas power Sustainability Report 2023 Target Carbon neutral Thermal energy 60% reduction cf 2010 Net zero With imported gas for power generation accounting for 40% of emissions, Singapore is looking to four alternatives to reduce emissions from this sector: solar, regional power grids, emerging low-carbon alternatives and natural gas (SunCable, 2024). SunCable’s Australia-Asia Power Link project is an opportunity that is being studied in which solar electricity generated in the Northern Territory is transmitted via an undersea high-voltage direct current transmission system to Singapore (SunCable, 2024). Additionally, it was announced in March 2024 that the Singapore Government is working with Shell and ExxonMobil, which have formed a CCS consortium, to study the viability of developing a cross-border CCS project from Singapore (EDB Singapore, 2024) to meet the 2030 NDC. Current studies are evaluating the technical feasibility of aggregating Singapore’s CO2 emissions and collaborating with international partners to study potential CO2 storage sites. 4.3.4 South Korea South Korea’s NDC pledges to reduce greenhouse gas emissions by 40% by 2030 compared with 2018 levels (reported as 686.3 Mt of CO2-e) and to reach carbon neutrality by 2050 (UNFCCC, 2023). In 2021, the Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Change was passed by parliament. South Korea’s decarbonisation plans include the industrial sector reducing emissions by 11% from 2018 levels by 2030 and using less carbon-intensive energy sources to reduce emissions by 46% from 2018 levels by 2030. The energy sector emissions reductions are planned to be met via a balanced energy mix between nuclear power and renewables and by accelerating the shift to clean energy such as solar and hydrogen, with a target of 32% nuclear power by 2030 (up from 27% in 2021) and renewables of at least 22% by 2030 (up from ~8% in 2021) (Shin, 2023). South Korea is targeting CCS as a means of reaching its carbon goals and has a target of 11 Mt of CO2 CCS by 2030 by actively seeking to develop transnational CCS value chains and to export CO2 for storage in Indonesia, Malaysia and Australia (Global CCS Institute, 2024a). The Carbon Dioxide Capture, Usage and Storage Act establishes a permitting model for CCS activities both onshore and offshore for key phases such as transport and storage site exploration and injection, the allocation of regulatory roles and responsibilities for approvals and oversight, and compliance requirements for proponents relating to aspects such as capture facility installation, operating CO2 pipelines and monitoring and reporting during operations and post-closure (Global CCS Institute, 2024a). Within the emissions database, South Korea’s CO2 emissions are 384.3 Mtpa (Figure 42), with over 80% of these emissions being generated by coal and gas power generation and iron and steel manufacturing. Filtering of the emissions for those within 50 km of a port reduces the CO2 emissions to 316.1 Mtpa (Figure 43). Further analysis of the sector emissions and a review of the top corporate emitters’ commitments are included in Figure 44 and Table 6. The top emitters have all pledged a commitment to the national target of carbon neutrality by 2050 with a focus on renewable energy. Figure 42: South Korea’s CO2 emissions plotted by location and size; pie chart shows distribution of CO2 emissions by industry Source: Adapted from Rystad Energy (2024) Figure 43: South Korea’s point-source CO2 emissions filtered to those within 50 km of a port, coloured by industry type; pie chart shows distribution of emissions by industry Source: Adapted from Rystad Energy (2024) Figure 44: South Korea’s sectoral CO2 emissions by company ? note that only the top 27 CO2 emitter companies are identified Source: Adapted from Rystad Energy (2024) Table 6: South Korea’s top five CO2 emitters' emission reduction commitments Company Core business 2030 2050 KEPCO Power generation Zero carbon roadmap Target 50% reduction Carbon neutrality Renewable energy Nuclear Large-scale wind power plant, solar and H2 fuel cell Clean H2 ecosystem (50% or more) POSCO Steel production Sustainability Report 2022 Target Reduce by 30% by 2035 and by 50% by 2040 cf 2018 levels Carbon neutrality Process Incr efficiency Electric Arc Furnace (37% from 24% in 2020) Incr scrap input (38%) HyREX (2% from 0%) CCUS added (6% from 0%) EAF (53% ) Incr scrap input (46%) HyREX (29% ) CCUS added (53%) Hyundai Motor Group Steel production 2023 Sustainability Report Target Carbon neutrality by 2045 RE100 by 2050 Renewable energy Focus on electrification 60% renewable energy Hydrogen society 100% renewable energy Other Circular economy activities, more ‘multi-use materials’ and recovery and recycling of end-of-life of vehicles SK Group Refining and gas power 2023 Sustainability Report Target 100% renewable energy conversion 50% reduction in energy and chemical emissions by 2025 cf 2019 75% reduction in scope 3 emissions Net zero 90% reduction in scope 3 emissions SsangYong Cement Green 2030 Targets Zero coal 100% self-power generation – eco friendly Production Decrease clinker ratio, expansion of non-carbonate raw materials, increase use of low-carbon fuels, establish waste heat generation facilities 4.3.5 Taiwan Taiwan’s emissions in 2021 were 297 Mt of CO2-e with net emissions of 275 Mt of CO2-e according to the Ministry of Environment (2023). The Climate Change Response Act passed in 2022 makes it legally binding to achieve net zero emissions by 2050 and provides a legal basis for the collection of carbon fees, which will be the main driving force to provide incentives for the development of CCUS in Taiwan (United States Department of Commerce, 2023). The policy includes strategies for reducing fossil fuel dependence and implementing renewable energy sources. Taiwan also announced its pathways and strategies to net zero by 2050 with 12 key strategies that include energy, industry, lifestyle and social transitions and governance facets for technology development and climate regulation (Climate Change Administration, 2024). Targets include 60?70% renewable energy by 2050, which includes solar, wind, geothermal and ocean energy, and for no additional coal-fired power installations post 2025 and existing coal-fired power to be converted to gas-fired. Carbon fees and green financing are an incentive for CO2 reduction. Within the emissions database, Taiwan’s 2022 CO2 emissions of 177.9 Mt of CO2 (Figure 45) are dominated by coal and gas power generation and iron and steel production. Figure 45: Taiwan’s CO2 emissions plotted by location, size and industry; pie chart shows distribution of emissions by industry. Note that all CO2 emissions are within 50 km of a port. Source: Adapted from Rystad Energy (2024) Further analysis of the sector emissions and a review of the top corporate CO2 emitters’ commitments are included in Figure 46 and Table 7. Figure 46: Taiwan’s sectoral CO2 emissions by company ? note that only the top 23 CO2 emitter companies are identified due to the limited number of companies in the emissions database Source: Adapted from Rystad Energy (2024) Table 7: Taiwan’s top five CO2 emitters’ emissions reduction commitments JJ Core business 2030 2050 Taipower Power generation 2022 Sustainability Report Target 20% reduction cf 2016 Renewable energy Develop renewable energy - increase proportion of clean energy from 8.6% in 2022 to 20% Thermal generation Expansion of gas and coal reduction - promote low-carbon energy - improve efficiency of conventional thermal power units - carbon-free fuel co-firing (H2 and NH3) and CCS projects Mailiao Power Co 4,200 MW coal-fired power 2023 Annual Report Target Not available Formosa Plastics Co Plastics manufacture 2022 Sustainability Report Target 40% reduction cf base year Carbon neutral by 2050 Renewable energy Transform coal burning to low (zero) carbon energy, energy saving and carbon reducing circular economy, increasing the use of renewable energy and other carbon reduction measures to reach carbon neutral by 2050 China Steel Corp Steel 2022 Sustainability Report Target 22% reduction cf 2018 Carbon neutral by 2050 Renewable energy Improve energy efficiency Use renewable energy Electrification Other Apply reduced iron to BF Injection of H2-rich gas in BF Co-production between steel and petrochemical plants Increase scrap use Carbon-free fuels CCS (transitioning from low-carbon BF to carbon-free BF) Full hydrogen smelting process (iron ore > DRI > EAF > steel) Ho-Ping Power (20% CLP Group, 20% Mitsubishi, 60% Taiwan Cement) Power generation 2023 CLP Sustainability Report 2023 Mitsubishi Sustainability Report Target No independent target CLP: progressively phase out coal by 2040 TCC: lowest carbon cement Other CLP: move to natural gas Mitsubishi: next-gen energy supply chain centred on H2 and NH3 (production, transportation and usage) Abatement plans for the top emitters are linked to Taiwan’s legislated objective of carbon neutrality by 2050. The plans of the major emitters are to increase efficiencies, fuel substitution and renewable energy and, additionally for the iron and steel manufacturers, transition to low-carbon manufacturing technology. 5 Abatement potential Analysis of the potential size of the CO2 import market that might be available to a Darwin CCS hub started with a review of the sectoral emissions and abatement alternatives. 5.1 Sectoral abatement forecast Sectoral analysis of all Asia-Pacific regional emissions shows that more than 90% come from coal and gas power generation, iron and steel and cement manufacture, and oil refining (Figure 47). Figure 47: Sector CO2 point-source emissions for the Asia-Pacific region Source: Adapted from Rystad Energy (2024) Filtering analysis of the regional emissions to those within 50 km of a port for potential export shows that more than 95% are generated by the same sectors (Figure 48). Figure 48: Sector CO2 point-source emissions within 50 km of a port for the Asia-Pacific region Source: Adapted from Rystad Energy (2024) Abatement for the coal and gas power sectors is expected to be driven by efficiencies, CCUS, fuel switching or transition to renewable power generation. With coal-fired power plants having an average life of 40?50 years, the region’s facilities with an average age of 13 years (Figure 49) are early in their lifespan and likely candidates for retrofit solutions, including carbon capture and ammonia/biomass co-firing (see Task 3 report; Joodi et al. (2024)). Existing inefficient coal-fired power plants are expected to be shut down rather than transitioned. Retrofitting existing coal- or gas-fired power plants with CO2 capture equipment is expected to be undertaken with a range of outcomes based on site-specific needs and limitations. While co-firing of coal-fired power plants with ammonia has been trialled and is moving into operation, co-firing with hydrogen or ammonia in natural gas-fired power plants is also being developed. Current natural gas infrastructure can use an approximately 10% hydrogen blend without any upgrading due to the higher burning temperature of hydrogen and potential NOx. Figure 49: Average age of existing coal-fired power plants worldwide Source: IEA (2021d) Steel is both a contributor to mitigating CO2 emissions from the energy system (as the primary material in wind turbines) and a significant generator of emissions (as its production is one of the most energy-intensive and therefore emissions-intensive processes). Traditional methods to produce iron and steel have relied on coal for about 75% of energy input (IEA, 2020b). The majority of the coal is consumed as coke in the blast furnace after the coal has been transformed in the coke oven, with the remainder used for electricity generation. Alternative production methods using natural gas to generate heat and reducing gases (including hydrogen) in DRI furnaces produce fewer emissions per tonne of steel production. Additionally, using higher proportions of scrap significantly reduces the energy required. Steel production facilities have an average life of 30?40 years, with the Asia-Pacific’s facilities having an average age of 13 years as at 2020 (IEA, 2020a). While steel production is forecast to continue to grow, the emissions intensity of steel production is expected to reduce towards 2050 as existing facilities near end of life and are replaced by lower emissions production methods or are modified to operate more efficiently, with lower emissions energy sources and CCS. Additionally, it is expected that increasing proportions of scrap steel will be available as feedstock due to existing steel stock coming to the end of its life and increased collection rates IEA (2020a). Figure 50: Age profile of Asia-Pacific production capacity for the steel sector (blast furnaces and DRI furnaces) Source: IEA (2020a) Abatement for the cement sector will be managed via energy efficiencies, alternative fuels, low-carbon clinker substitution and CCS. With forecast growth in the demand for cement aligned with economic growth, CCS will be required to provide over 50% of abatement required by the sector. Alternative fuels used in cement manufacture include biomass and materials such as tyres at the end of their life, which diverts the materials from incineration or landfill (International Energy Agency, 2023). Abatement for the refining sector will be driven by the declining demand for oil with the transition to alternative fuel sources. For plants continuing to operate, abatement will be achieved via reduced methane emissions, energy efficiency improvements and CCS (International Energy Agency, 2023). 5.2 Scope 1 and 2 abatement requirements To analyse the potential quantity of CO2 emissions (serviceable obtainable market) that could be available for import into the Northern Territory CCS hub, the following calculations were undertaken. 5.2.1 Method Total addressable market The total addressable market estimate used the 2022 CO2 emissions from the Northern Territory’s key trading partners (China, Japan, Singapore, South Korea and Taiwan) from the emissions database. These emissions were then filtered to those within 50 km of a port with a depth of 13 m or more. Note that no projection of emissions growth was included in the total addressable market assessment as a conservative approach to estimating the market potential. Serviceable available market The serviceable addressable market ? that is, the total amount of CO2 emissions that might be captured ? was calculated using the numbers from the total addressable market estimation multiplied by the level of CO2 capture forecast to be installed and abating emissions in the years 2030 and 2050 for each sector. Factors estimating the level of CO2 capture forecast for various sectors were sourced from the IEA’s Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach (IEA, 2023b). For coal and gas in the electricity generation sector, there are limited estimates as to what percentage of emissions from these sources would be abated by CCS. To determine the percentage of CCS that would be needed in the future, the Roadmap’s Table A.3 World Electricity Sector was used (IEA, 2023b). This was achieved by dividing the TWh coal or gas electricity generation with the proposed CCS total to obtain the total amount of TWh proposed to be generated by coal or gas with and without CCS. This calculation was applied for 2030 and 2050. Some sectors had a more prominent focus in the Roadmap and so a different methodology was used for CO2 emissions from steel, aluminium, cement and primary chemicals. With the additional information that was available for these sectors, this allowed the same formulas to be applied across the different sectors. Total emissions for each sector were extracted from Table A.4 World CO2 Emissions (IEA, 2023b). CO2 capture volumes were extracted from pages 95?97 of the Roadmap, which detail each sector’s emissions reductions by mitigation measure (IEA, 2023b). The captured CO2 emissions were then divided by the total emissions from each sector (including all abated emissions) for 2030 and 2050. Serviceable obtainable market The serviceable obtainable market ? the potential volumes of CO2 available for the Northern Territory CCUS hub ? was estimated by multiplying the serviceable available by an arbitrary figure of 5% (i.e. assuming 20 CCUS hubs equally share in servicing the CO2 storage demand for the five key Northern Territory trading partner jurisdictions) to represent the volume of CO2 that could be imported to Darwin. This approach to market size estimation has inherent uncertainties and gross assumptions (as detailed above). However, the purpose is to provide an estimating basis to help understand the size of potential future CO2 markets in the region. It is anticipated that the volumes of CO2 available in the market are significantly underestimated using the approach above as the estimates do not incorporate: * economic growth and any resultant growth in unabated emissions * other countries beyond the five key trading partners * ports with a depth of less than 13 m * gather pipelines for CO2 beyond more than 50 km from a port. A more detailed market analysis will be warranted during the next stage of the development of the Northern Territory hub, to create a range of market scenarios that provide a greater understanding of market risk. 5.2.2 Market analysis When the 2022 CO2 emissions of ~10 Gt of CO2 for the Asia-Pacific region (inclusive of Australia) are filtered to the emissions from the Northern Territory’s key trading partners, this results in 7.6 Gt of CO2 in 2022. Of these CO2 emissions, ~2,265 Mt are within 50 km of a port with a depth of 13 m or more, representing the total addressable market. A serviceable available market of ~64 Mt is estimated by 2030, of which ~3 Mt of CO2 is estimated as a serviceable obtainable market for the Northern Territory CCUS hub (Figure 51). Using the same 2022 total addressable market data, the total serviceable market in 2050 is estimated to be ~1,449 Mt of CO2. This is based on increased CO2 capture requirements by industry sectors to meet net zero requirements. Of this total serviceable market, ~72 Mt is estimated as a serviceable obtainable market (Figure 52). As well as the caveats around the estimation of market size outlined in section 5.2.1 at this scale, if realised, there would be a large number of CCUS hubs in operation and therefore the proportion of the market secured may be lower as a percentage share but it would be larger in absolute terms than 2030. Figure 51: 2030 CO2 market estimate TAM = total addressable market, SAM = serviceable available market, SOM = serviceable obtainable market Figure 52: 2050 CO2 market estimate TAM = total addressable market, SAM = serviceable available market, SOM = serviceable obtainable market 6 Conclusions Economic growth forecasts across the Asia-Pacific region show moderated but continued growth that will drive demand for energy and products. Across the region the energy mix will increasingly shift towards low-emissions generation sources for electricity, but there will be continued emissions from the energy sector and hard-to-abate industry sectors even with this shift to renewable and abated sources of energy. Analysis of emissions data from the region has enabled the identification of potential CO2 markets. An ‘emissions database’ has been generated using point-source CO2 emissions data from the Rystad CCUS Cube database (Rystad Energy, 2024) for the region, augmenting this with company and national data. It is acknowledged that these data represent a subset of the emissions, but the level of detail allowed individual emitter or facility-level analysis with a specific focus on emissions that will be addressable via CCUS. Current emissions in the region were analysed and mapped with reference to Darwin. This identified 10 billion tonnes of CO2 emissions in the Asia-Pacific region. Of these emissions, approximately 3 billion tonnes are within 50 km of a port with a depth of 13 m or more, and therefore may be accessible for LCO2 transport by vessel. Further, 95% of these CO2 emissions are generated by five sectors: 1. coal power generation 2. iron and steel 3. gas power generation 4. oil refining 5. cement It is expected that these sectors will continue to generate substantive emissions for decades to come. CO2 emissions from the Northern Territory’s five key trading partners (China, Japan, Singapore, South Korea and Taiwan) were approximately 7.6 Gt in 2022, of which approximately 2.2 Gt were within 50 km of a ports with a depth of 13 m or more. When the IEA’s sectoral emissions reduction roadmaps are applied to these CO2 emissions, it is estimated that ~64 Mt of CO2 will be captured from these sources by 2030, increasing to ~1,449 Mt by 2050. If the Northern Territory CCUS hub was able to access 5% of this market (i.e. 20 regional CCUS hubs in operation with an equal share of the market by 2030), this would represent a serviceable obtainable market of ~3 Mt in 2030 and ~72 Mt 2050. 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Contact us 1300 363 400 +61 3 9545 2176 csiro.au/contact csiro.au For further information CSIRO Energy Andrew Ross +61 8 6436 8790 Andrew.Ross@csiro.au csiro.au/Energy 1 The old-age dependency ratio is the number of individuals aged 65 or older per 100 people of working age – which is defined as those aged between 20 and 64. --------------- ------------------------------------------------------------ --------------- ------------------------------------------------------------ Northern Territory Low Emissions Carbon Capture Storage and Utilisation Hub | i ii | CSIRO Australia’s National Science Agency Northern Territory Low Emissions Carbon Capture Storage and Utilisation Hub | i