Unlocking Asia's Carbon Capture Potential: Strategic Opportunities in CCUS for Hard-to-Abate Sectors

Asia's industrial heartlands are undergoing a quiet revolution. As the world's largest emitter of carbon dioxide, the region is pivoting toward carbon capture, utilization, and storage (CCUS) to decarbonize hard-to-abate sectors like steel and energy. But the true potential of CCUS lies not in isolated projects but in cross-industry collaboration and shared infrastructure. These strategies are proving to be the linchpins of scalable, cost-effective decarbonization—a trend investors cannot afford to ignore.

The Case for Cross-Industry Collaboration

CCUS projects in Asia are increasingly adopting a hub-based model, where multiple industries—steel, cement, chemicals, and power—share CO₂ capture, transport, and storage networks. This approach reduces capital intensity and operational costs, making CCUS viable for smaller emitters and regions with limited storage capacity.

A prime example is the global consortium formed in August 2024 by steelmakers (ArcelorMittal Nippon Steel India, JSW Steel, Hyundai Steel) and energy majors (BHP, Chevron, Mitsui & Co). Their pre-feasibility study aims to design CCUS hubs across Asia, leveraging shared infrastructure to connect hard-to-abate sectors. This collaboration mirrors Indonesia's strategy, where 15 CCUS projects are slated for 2026, including the Tangguh CO2-EGR and Gundih CCS initiatives. These projects utilize existing oil and gas infrastructure to capture high-purity CO₂, reducing costs by up to 30% compared to standalone systems.

In China, the Huaneng Clean Energy Research Institute is advancing a 1.5 Mtpa CCUS project in Gansu Province, set to become the world's largest coal power CCUS facility. By integrating proprietary capture technology with downstream CO₂ utilization partners, Huaneng has demonstrated how cross-sector coordination can enhance economic viability. Similarly, the Taizhou Project (500 Ktpa) has achieved operational efficiency through partnerships with industries that repurpose captured CO₂, such as enhanced oil recovery (EOR) and chemical feedstock production.

Infrastructure-Sharing: The Cost-Saving Catalyst

Quantitative data from China's national-scale CCUS network underscores the financial benefits of shared infrastructure. A 80,700 km pipeline network connects 1,186 CO₂ sources (coal power, steel, cement, coal chemicals) to 307 onshore and 22 offshore storage sites. This system reduces transportation costs by 40% compared to siloed projects, while optimizing geospatial connectivity. For instance, offshore storage in the Pearl River Mouth Basin (PRMB) cuts transport distances to 200 km, versus 750–1,500 km for onshore sites.

The economic advantages are stark:
- Coal-fired power: 1.75 Gt/a CO₂ capture potential.
- Steel: 0.77 Gt/a.
- Cement: 0.56 Gt/a.
- Coal chemicals: 0.23 Gt/a.

Shared pipelines also mitigate the risk of underutilization. A 70% reduction in power generation hours increases abatement costs by 12.8%, but this is offset by spreading fixed costs across multiple emitters. Offshore storage, with a capacity of 573–779 GtCO₂, further enhances scalability, as seen in China's first offshore CCUS project, which aims to inject 1.46 MtCO₂ by 2026.

Policy and Private Sector Synergy

Governments are accelerating CCUS adoption through regulatory frameworks and financial incentives. Indonesia's Presidential Order No. 14/2024 and MEMR February 2023 decree streamline permitting and encourage cross-border CO₂ transport. Meanwhile, private sector innovation is surging. Tencent's CarbonX 2.0 and ArcelorMittal's XCarb® China Accelerator are pioneering digital tools and risk management models for CCUS.

Notably, China's first CCUS-specific insurance policy, issued by the People's Insurance Company of China for the Jurong Power Plant, highlights the role of financial instruments in de-risking projects. This collaboration between energy and finance sectors is a blueprint for scaling CCUS in high-risk environments.

Investment Opportunities and Strategic Recommendations

The CCUS landscape in Asia is ripe for investors seeking long-term, high-impact opportunities. Key sectors to target include:
1. Infrastructure Providers: Companies like Hatch (engineering) and CNOOC (offshore storage) are central to hub development.
2. Technology Developers: Firms specializing in solvent technologies (e.g., China Energy New Energy Institute) and oxy-fuel combustion systems.
3. Policy-Driven Markets: Indonesia and China, with their aggressive climate targets and regulatory support, offer fertile ground for CCUS expansion.

Investors should also monitor cross-industry partnerships, such as the Shanghai CCUS Technology Forum (2025), where 400+ stakeholders shared insights on scaling CCUS. The forum emphasized the need for tailored policy frameworks and innovative business models—a signal that regulatory alignment will drive future growth.

Conclusion

Asia's CCUS revolution is not just about technology—it's about reimagining industrial ecosystems. By fostering cross-industry collaboration and shared infrastructure, the region is unlocking a pathway to decarbonize its most emissions-intensive sectors. For investors, this represents a unique opportunity to align with climate goals while capitalizing on a market poised for exponential growth. The time to act is now, before the window closes on the most scalable decarbonization solution of the 21st century.