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DNV Decarbonisation Insights: Singapore’s future opportunities in the CCUS and shipping value chain

15 Feb 2022

How can the maritime industry respond to the global climate challenge to limit temperature rise to 1.5 °C?

Carbon Capture, Utilisation and Storage (CCUS) is gaining traction around the world as a technological solution which can conceivably reduce the impact of carbon dioxide (CO2) emissions. 

Some governments and energy producers are banking on it as a means to achieve Net Zero Emissions (NZE) in line with both the 2015 Paris Agreement and the most recent COP26 Conference in Glasgow. 

The International Energy Agency (IEA) sees CCUS as an important emissions reduction technology that can be applied across the energy system. Next to its permanent storage deep underground in geological formations, the captured carbon can also be used as a valuable resource to create synthetic fuels, chemicals, and industrial products.

Although the technologies and the industry are very much still emerging, a possible challenge is connecting capture sources to facilities for use or storage sites, especially where pipelines are not an option. As a result, CO2 transport ship technology will be needed if large quantities are to be safely transported economically.

Regional Manager for DNV Maritime Cristina Saenz de Santa Maria, who covers South East Asia, Pacific and India from her Singapore base, points to two fundamental reasons why CCUS may be a prerequisite to keep global emissions well below 2°C and ideally closer to 1.5°C:

  • Without using CCUS, it may be impossible to get emissions to net zero fast enough.
  • There are currently no competitive alternatives to CCUS for certain hard-to-mitigate sectors.

Commercial viability is key

But at this stage CCUS is not seen as being commercially viable and is not currently operating at sufficient scale anywhere in the world to make a big difference, though IEA does acknowledge that “strengthened climate goals and new investment incentives are delivering unprecedented momentum for CCUS”.

Even with more than 100 new facilities announced in 2021, “the planned pipeline of projects would fall well short of delivering the 1.7 billion tonnes of CO2 capture capacity deployed by 2030 in the Net Zero by 2050 scenario”, IEA writes.1

DNV reinforces this by asserting that the cost of emitting CO2 must be higher than the cost of abatement by CCUS.2

Planned 40,000 CBM liquified CO2 carrier connecting to an offshore CO2 injection platform (courtesy KSOE)

Maritime transport, however, can play an essential role in building up an efficient CCUS value chain, which is expected to lead to an increasing demand for specialised liquefied CO2 (LCO2) carriers.

Research undertaken by DNV and its partners, as well as by others in the shipping and energy industries around the world, suggest that there are distinct possibilities that CCUS could well become economically viable as a means to cut emissions, by safely transporting CO2 where it can be best utilised, sequestered or stored. 

Singapore’s role in building a CCUS supply chain

This leads us to the question whether Singapore could play a leading role in the CCUS supply chain – and the answer is certainly “yes”. 

Following a feasibility study on “Carbon Capture, Storage, and Utilisation: Decarbonisation Pathways for Singapore’s Energy and Chemicals Sectors”, the government said it sees the technology as an integral part in the city state’s transition to a low-carbon future.3

Only a few months after this announcement promoting CCUS and other low-carbon technological solutions, a memorandum of understanding (MoU) between Singapore LNG (SLNG) and Linde Gas hit the news. In December 2021, both partners announced they will explore options of a CO2 liquefaction and storage facility, located adjacent to the SLNG Terminal on Jurong Island.4

The CO2 concept project involves using cold energy from SLNG’s own operations to liquefy CO2, which they will store in tanks onsite before they transport it later for end-use. If feasible, this could be the first such facility in Singapore and the region. 

Tan Soo Koong, CEO of SLNG, said at the time that energy security is of utmost importance, and it is also “our vision to catalyse new possibilities in the energy transition and this includes supporting new solutions for a lower carbon future, in step with the government’s Singapore Green Plan 2030.”

Maritime transportation of CO2

Looking into the potential of CCUS for the maritime sector, Dr Sanjay C. Kuttan, Chief Technology Officer at the Global Centre for Maritime Decarbonisation (GCMD), sees significant opportunities: While Singapore most likely will not have sufficient carbon sequestration opportunities within its national boundaries, as a major port and petrochemical centre it could become an important hub to aggregate CO2 captured from vessels and domestic operations to be sequestered elsewhere in the region, using CO2 carriers.

“These carriers can either be dedicated for CO2, or LNG carriers modified in order to take advantage of available ullage – or surplus space onboard – on their return journey,” Dr Kuttan explains.

It’s also possible that Singapore could function as a final port to consolidate captured CO2 within a regional network, where such aggregation can be achieved from a “milk-run” like operation between other ports to Singapore before heading out to the sequestration fields within regional waters. This would require the optimisation of vessel sizes for differing amounts of captured CO2 to be transported.

Dr Sanjay C. Kuttan, Chief Technology Officer at the Global Centre for Maritime Decarbonisation (GCMD)

Dr Kuttan expects that sequestration will be operationally and commercially viable in the future with the increasing volumes of captured CO2, as it will benefit from the economies of scale. 

“In the interim, as we explore and ramp up deployment of on-board carbon capture (OBCC) solutions, Singapore can create impact by having in place utilisation pathways for the captured CO2 to close the CO2 emission loop and make the effort to decarbonise the vessel more effective,” he says.

The initiatives by government agencies in Singapore, over the decade and more recently, with the example of the Low-Carbon Energy Research (LCER) Funding Initiative, could prove advantageous as they also target the production of aggregates and synthetic chemicals. 

Coordination across all sectors is needed

However, Dr Kuttan does think that there is a need for better coordination between governments and the private sector to scale up these solutions at a system level across sectors.

There’s no doubt that moving CO2 across national boundaries poses legal and liability challenges that need to be addressed collectively by nations where their borders are in play.

Accounting and assignment of carbon abatement to the right parties is also required, and the complexity of business agreements between the parties in capturing, storing, transporting, and sequestering is not trivial. Also, standards and procedures need to be clearly articulated for safe operations.

Looking ahead, GCMD sees a good opportunity for Singapore to orchestrate a robust system of integrated solutions around CCUS and shipping. This would include onboard CCUS technology, as well as the delivery and off-loading of CO2 to utilisation or sequestration assets (land-based or floating). 

Dr Kuttan also believes that Singapore based shipyards can “up the ante” by playing a more active role in retrofitting or building vessels with on-board CCUS systems.

Significant abatement potential for the maritime sector

In summary, GCMD considers carbon capture and sequestration as a solution that could create significant abatement potential for the maritime sector. It could also extend the runway of current carbon fuels to reduce the carbon load on the environment as green ship fuels ramp up to scale. In the case of green fuels, for example bio-derived fuels, CCUS could provide even negative emission opportunities. 

“We need a coordinated and collaborative approach to ensure that CCUS delivers a sustainable decarbonisation platform, as it is complex and, furthermore, requires those who will benefit the most commercially from the execution to invest equitably in realising the full value of CCUS,” Dr Kuttan concludes.

DNV, a founding member of the GCMD, shares the same views. Ms Saenz de Santa Maria reinforces incentives are needed to get the investment required to build the infrastructure – on land and on water – and all parties must work together: “Public private partnerships are vital, along with having the necessary regulations in place, as well as committing to maintain the highest possible safety standards. There cannot be a trade-off between decarbonisation and safety.”

She also notes that DNV has played a pioneering role in the transportation of liquified CO2, as the company has offered class services to CO2 carriers since 1988.

Developing low-pressure solutions for the transportation of CO2

While shipping represents an alternative to pipelines, there are certainly some technical challenges that need to be addressed. 

Martin Cartwright, DNV’s Business Director Gas, Carriers & FSRUs, explains that to efficiently transport CO2 at industrial scale, the industry needs to look into different options, including high-, medium-, and low-pressure solutions, which will help integrate seaborne transportation into the CCUS value chain.

“Through our work with various partners, we have developed expertise specific to vessel design, specialised tanks, piping and refrigeration systems for the transportation of liquified CO2,” he reports.  

Ms Saenz de Santa Maria points to a recent example where DNV is involved with four other significant players – Equinor, Shell, Total Energies, and Gassco – in a new Joint Industry Project (JIP) to develop low-pressure solutions for the transportation of CO2 by ships.5

The CETO (CO2 Efficient Transport via Ocean) project will carry out the technology qualification of a low-pressure ship design and identify solutions to scale CO2 transportation volume, while reducing the associated risks, to support the development of opportunities in CCUS.

DNV’s VP Special Projects-Gas, Johan Petter Tutturen, makes it very clear that it was essential that CO2 ship designs need to be reliable and meet accepted safety standards: “That is why we are very pleased to be working together with this strong consortium of CCUS stakeholders to identify the technical risks and challenges to enable safe and economical operations going forward.”

Safety first, while balancing cost and operational complexity

Mr Tutturen also draws attention to DNV’s participation in several further Joint Industry Projects evaluating alternatives for transporting CO2 at both high and low pressures. “Factors being considered, among others, include choice of material for the containment system, effect of impurities in the cargo, transport volumes, safety considerations, and achieving the optimal balance between cost and operational complexity,” he states. 

Ms Saenz de Santa Maria highlights the Northern Lights project funded by the Norwegian Government, which involves DNV, along with other industry parties, in a full scale “Longship” demonstration for the capture, transportation, and storage of CO2.

Announced in December 2020, in the first phase it will capture CO2 from industrial sources in the Oslofjord region and ship it in liquid form to an onshore terminal on the Norwegian west coast. From there it will be carried by pipeline to an offshore storage complex in the North Sea. 

Small-scale CO2 carrier (7,500 CBM) utilised in the Northern Lights project on the Norwegian west coast (courtesy Northern Lights)

In October 2021, the project announced the construction of two dedicated COcarriers, with a cargo size of 7,500 cubic metres (CBM).

DNV acknowledges that the Northern Lights project shows how a public private partnership can be leveraged to make a carbon, capture and storage concept a reality and inspire other groups to develop their own CO2 projects.

Shipyards launching CO2 carrier designs

Considering the future market potential, more and more shipyards are getting active, too.

In September 2021, DNV and the Liberian International Ship & Corporate Registry (LISCR) announced they awarded an Approval in Principle (AiP) to Hyundai Heavy Industries (HHI) and Korea Shipbuilding & Offshore Engineering CO (KSOE) for a new 40,000 CBM liquified CO2 carrier design. 

“We are delighted to work with HHI, KSOE, and LISCR, and to be able to approve this innovative LCO2 carrier design,” commented Vidar Dolonen, Regional Manager Korea & Japan at DNV Maritime. “Our role is to support bringing these ship designs to life for a safer and more sustainable future.”

The planned 40,000 CBM class LCO2 carrier is 239m long, 30m wide, and has a depth of 21m. The vessel will be equipped with seven IMO type-C cargo tanks. It is designed to carry LCO2 cargo only, but multi-cargoes, such as LPG or ammonia, can also be considered.

“Obtaining the AiP for this innovative large scale LCO2 carrier is a meaningful technological milestone. We believe our self-developed LCO2 carrier will contribute to global decarbonisation efforts by providing tailor-made designs according to each ship owner’s specific requirements,” said Mr. Won-Ho Joo, Senior Executive Vice President and Chief Technical Officer at HHI.

What all these CCUS and shipping projects confirm for Ms Saenz de Santa Maria and others at DNV Maritime is that while the technology won’t be a showstopper it will require collaborative action involving regulators, politicians, ship managers, ports, yards, suppliers, and classification societies to make a real difference.

As demand for flexible transportation of liquified COincreases, it becomes very apparent that those who are willing to partner with other stakeholders on CCUS projects will be rewarded in the years ahead.

It’s worth drawing attention to the essence of what DNV concludes in its “Pathway to Net Zero Emissions” report released in October 2021: Carbon capture and removal technologies are a must if the world has any chance of meeting the 1.5 °C limit for temperature rise.6

Related: DNV Decarbonisation Insights: Singapore’s pathway to Net Zero and the role of Ammonia

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