Carbon Capture, Utilisation and Storage (CCUS): A Singapore Perspective
Singapore has a variety of strategies to advance Singapore’s energy transition. This includes improving the efficiency of power generation, maximising solar and ESS deployment, importing cleaner energy from other countries, and pre-positioning Singapore for new carbon-mitigation strategies, such as CCUS. [1]
CCUS has been hailed as a promising means of lessening carbon footprint and emissions, especially for economies heavily reliant on fossil fuels and for hard-to-abate industrial sectors, such as transportation, and energy and chemicals (E&C).[2] In Singapore’s Long-Term Low-Emission Development Strategy (LEDS) submitted to the UNFCCC in 2020, Singapore identified the significant potential for CCUS to contribute to emissions reductions and highlighted the need for partnerships with companies and countries for CO2 storage opportunities. In 2021, the Singapore government announced aspirational targets to realise at least 2 million tonnes of carbon capture potential on Jurong Island by 2030 and achieve more than 6 million tonnes of carbon abatement per annum by 2050.[3] This prompted a series of research projects and research grants on the potential of a carbon capture and utilisation (CCU) test-bedding facility on Jurong Island, the CCU Translational Testbed, led by A*STAR, Economic Development Board (EDB) and JTC.
CCUS broadly encompasses two kinds of processes. The first is carbon capture and storage (CCS), which refers to a technology that aims to capture CO2 emissions before they are released into the atmosphere. In CCS, carbon dioxide isolated from gaseous emission streams is compressed into liquid forms and transported to storage locations, where they are injected deep into geological formations, such as depleted oil and gas reservoirs and saline aquifers, for permanent storage.[2] Globally, almost 300 million tonnes of CO2 have been successfully injected underground.[4] The other process is carbon capture and utilisation (CCU). In CCU, rather than being simply stored, captured CO2 is utilised directly (i.e., not chemically altered) or indirectly (i.e., chemically transformed) in the production of various products.[5]
This article offers an overview of key CCUS initiatives, as well as legal and regulatory issues relating to the deployment of CCUS in Singapore.
Key Initiatives
The Singapore government has consistently invested in emerging low-carbon energy technologies to enable Singapore to gain a first-mover advantage when such technologies eventually become commercially viable. In 2021, under the Low-Carbon Energy Research Funding Initiative (LCER FI), the Singapore government awarded a total of S$55 million to 12 research, development, and demonstration projects on low-carbon energy technology solutions in hydrogen (4 projects) and CCUS (8 projects) to boost the decarbonisation of the power and industry sectors. [6] The initiative was driven by EDB and EMA while A*STAR was the implementing agency. Phase 2 of the LCER FI was launched in 2023 and encouraged researchers to submit proposals to develop nascent yet promising low-carbon technologies, including CCUS. Awarded projects will receive grants of up to S$1.2 million per project for up to three years.[7]
Singapore has also proactively engaged with other countries to further develop its CCUS capacities. For instance, on the bilateral front, Australia and Singapore signed a memorandum of understanding (MoU) in 2020 to advance cooperation on low-emission technologies, including CCUS, as a priority solution.[8] The UK and Singapore signed a MoU in 2023 to establish a bilateral Green Economy Framework which will facilitate cooperation in the policy, regulatory and technical aspects of CCUS, sharing of best practices and identification of areas of interest for mutual development. Earlier in 2024, Singapore signed a Letter of Intent (LOI) with Indonesia to collaborate on cross-border CCS.[9] On the multilateral front, Singapore’s Energy Market Authority is a member of the Asia CCUS Network, which provides a platform for policymakers, financial institutions, industry players, and academics to work towards developing and deploying CCUS. The Network has a strong focus on identifying the routes to lowering the cost of deploying CCUS technology.[10]
To work around Singapore’s geographical limitations in relation to carbon storage, Singapore has engaged in partnerships with companies and other countries with suitable geological formations to enable CO2 storage opportunities beyond Singapore’s shores.[11] One study, on “Carbon Capture, Storage, and Utilisation: Decarbonisation Pathways for Singapore’s Energy and Chemicals Sectors”, which was jointly commissioned by National Climate Change Secretariat (NCCS) and EDB, estimated that the wider region offers around 84.8 giga tonnes of CO2 storage potential.[12] A Joint Study Agreement (JSA) on the feasibility of transporting liquified carbon dioxide (CO2) from Singapore to permanent storage locations offshore Australia was signed in 2022 between Chevron Corporation, through its Chevron New Energies International Pte. Ltd. (Chevron) subsidiary, and Mitsui O.S.K. Lines, Ltd. (MOL).[13] Recently, in 2024, the Singapore government selected ExxonMobil and Shell to form the S-Hub Consortium to develop a cross-border CCS project.[14] Such international projects are key to building CCUS capacities and resources in Singapore.
Another noteworthy initiative by the private sector to develop CCUS capacities is the Low Carbon Technology Industry Consortium (LCT-IC). Under this collaboration, which was first entered into in 2020, and extended in 2024, Keppel, Chevron Singapore, Pan-United Corporation, Surbana Jurong, Air Liquide Singapore, Osaka Gas Singapore, and Pavilion Energy signed a memorandum of understanding (MoU) to collaborate on lower carbon opportunities to support Singapore’s aspiration of achieving net-zero emissions by 2050.[15] This project aims to accelerate the development of cost-effective CCUS along with the production, transportation, distribution, and utilisation of lower-carbon hydrogen and its derivatives at scale.
Legal and Regulatory Issues
"Successfully deploying CCUS relies on the establishment of legal and regulatory frameworks to ensure the effective stewardship of CCUS activities and the safe and secure storage of CO2.”
International Energy Agency (IEA), Handbook on Legal and Regulatory Frameworks for CCUS (2022)
A well-considered CCUS regulatory regime is crucial to fostering the public and the industry’s receptiveness to CCUS technologies and encouraging investment in CCUS. CCUS laws and regulations should safeguard the environment and public health, set out the rights and obligations of CCUS stakeholders, and guide the development, operation, and long-term management of CCUS resources.[16]
Owing to the nascency of CCUS in Singapore, there is no specific regulation or guideline dedicated to CCUS as of the date of this article. CCUS projects are presently subject to existing legislation governing industrial activities, including, amongst others, the Environmental Protection and Management Act 1999 (to safeguard against pollution), the Carbon Pricing Act 2018 (which imposes carbon taxation on high emitters), and the Workplace Safety and Health Act 2006 (which deals with workmen health and safety). Like other jurisdictions, Singapore might enact legislation or amend its existing legislation to promote and regulate the deployment of CCUS in due course.
The IEA’s CCUS Handbook on Legal and Regulatory Frameworks for CCUS(2022) is instructive in highlighting the various regulatory issues which the Singapore regulator may look to in formulating the policies and regulations around CCUS. In the Singapore context, the regulatory regime will likely encompass or incorporate the following elements:
- Regulated substances: Regulations might define the qualitative and quantitative metrics for the classification of CO2 streams, for instance, as waste, hazardous waste, pollutant, dangerous good, or commodity. CO2 captured for transport and storage will almost inadvertently contain impurities. Regulations might set limits on the kinds and quantities of impurities permissible in different classifications of captured CO2. Additionally, regulations should also define ownership rights and obligations over CO2 throughout the CCUS value chain and over the course of a CCUS project.
- Regulated activities: CCUS projects carry massive and possibly unforeseeable risks of environmental impact, especially when CO2 is injected into geological formations to be stored indefinitely. Regulations should ensure that onshore storage sites are rigorously assessed for suitability for CO2 injection. There should be a robust monitoring and reporting plan for operators to ensure that CO2 is injected safely, and that there are measures in place to track and contain leaks. To this end, it is almost a certainty that a robust licensing and enforcement regime will be required in Singapore for any CO2 capture, transport, injection and storage.
- Allocation of responsibilities: In addition to prescribing the standards for safe operations and long-term storage, regulations will likely allocate operational and financial responsibilities for CCS activities to each actor in the CCUS ecosystem and some form of security or performance bond will be required to secure compliance. It would also be unsurprising if the Singapore regulator further mitigates the risk by insisting on the appointment of a contingency operator if the primary operator fails to perform.
- Transboundary issues: There is massive potential for partnerships between countries facing storage limitations and those possessing substantial storage potential. That said, the transboundary transportation of CO2 to be stored in another country adds another layer of complexity as it may trigger certain national or international regulatory requirements. Additionally, storing CO2 near territorial boundaries may create problems for neighbouring jurisdictions. For example, storage activities could displace subsurface fluids across borders and there is the risk that stored CO2 could leak across borders as well.
- CCUS hubs: The IEA is a strong proponent of a “hub approach” to accelerating the deployment of CCUS technology. The IEA envisions that a hub approach could facilitate CO2 capture from various industrial and power facilities, enhancing efficiency in planning and constructing transport and storage infrastructure.[17] In this area, we believe that Singapore will be eager to participate in the formulation of standards or rules to secure fair or equal access to the use of cross border CCUS infrastructure.
Conclusion
Despite various economic and technological challenges, the CCUS sector is expected to see sustained, and long-term growth as a viable backup plan for emissions reduction. Although the proactive acceleration of renewable energy projects and energy efficiency measures have an immediate cost-effective impact on reducing emissions, CCUS is expected to have a useful role to play in advancing Singapore’s net zero ambitions.[18] In recognition of this, public and private sector players in Singapore are investing heavily in research and development to make CCUS more energy and cost-efficient. The results of these R&D projects will inform the future of Singapore’s strategic policies on CCUS. The regulations on CCUS will likely develop in tandem with the commercialisation of CCUS projects in Singapore and the growth of CCUS hubs in the region.
If you have any questions or would like to discuss any issues, please do not hesitate to contact us.
This article is produced by our Singapore office, Bird & Bird ATMD LLP. It does not constitute legal advice and is intended to provide general information only. Information in this article is accurate as of 25 March 2024.
