APAC's CCS challenge is no longer recognition. It is investment.

Governments across Asia Pacific are continuing to recognise the role of carbon capture and storage (CCS) in their emissions reduction efforts. We've seen positive enabling work for deployment across countries including Australia, Indonesia, Malaysia and Singapore. Eight nations now reference CCS in their national strategies or Nationally Determined Contributions to the Paris Agreement, and our 2026 Global Status of CCS report shows that the regional pipeline of pre-FID projects has reached 62, up from 49 last year.

But conversion remains a challenge. Since our last report in October 2025, only one project has achieved FID, PTTEP's Arthit project in Thailand, with a further four under construction. What's needed to accelerate the next stage of CCS in APAC and shape the policy setting that will unlock investment?

Creating revenue visibility

There is no doubt that governments will need to strengthen their policy frameworks to help bring forward the next tranche of projects. These frameworks have to be durable. Investors need confidence not only that policies exist today, but that CCS has been baked into achieving economic and climate objectives for the long run. Investors also need clarity about long-term storage liability. Open-ended responsibility is difficult to finance, so regulatory frameworks must establish when, and under what conditions, responsibility for a storage site can transfer from the operator to the state.

Crucially, more work needs to be done to support bankability and projects' ability to generate the robust and consistent returns that financiers can attach to them over the long term. The market for low-carbon products is not currently large enough to be a viable source of return, although legislation could expand it in time through the likes of public procurement standards or embodied carbon requirements for goods. For now at least, we are in the realm of '$40,000 handbags' - the market exists, but it's small and currently only a few customers are able and willing to pay. This means revenue visibility has to be driven by state action.

Carbon pricing and credits trading can play a part. We've seen the largest ever issue of Australian Carbon Credit units from the regulator for Santos' Moomba CCS project at 1.19 million units, for example. However, aside from Singapore, where prices are expected to reach up to 80 dollars per tonne by 2030, carbon pricing is generally low across the region and insufficient on its own yet to make the numbers stack up for CCS projects.

Some form of contracts for difference model could help to create revenue certainty, as has been the case in countries like the UK, although this isn't the only route. In the US, CCS deployment continues to be driven largely by federal tax incentives, such as the United States 45Q credit, combined with other support mechanisms at state levels. Governments in Asia Pacific will need to determine the solution that's right for them, balancing legislative, fiscal and political realities.

It's likely that governments will also have to go one step further and deploy state funding to address the initial capital costs of original infrastructure. In Norway, for example, it was government investment that got the Northern Lights scheme off the ground.

Building a cross-border CCS market

One of the striking trends in our 2026 analysis of CCS deployment around the world is the emergence of more connected carbon capture, transport and storage networks. Europe especially is beginning to show how a cross-border market could operate in practice. These models can spread infrastructure costs across multiple emitters and give capture projects access to storage they could not economically develop alone. But they also create new commercial dependencies across the value chain, making clear allocation of risk between capture, transport and storage operators essential.

We could see something similar come forward in APAC, with nations like Japan, Singapore and South Korea increasingly willing to pay a reasonable price for non-domestic storage to meet their carbon abatement targets. Again, policy work will be vital to encourage this evolution.

There is currently no unifying legislation or common carbon accounting structure that covers CCS across Asia Pacific except for IPCC requirements. This would therefore have to come through government-to-government bilateral agreements, addressing considerations such as how long-term stewardship, crediting and national inventories will be managed as CO₂ crosses borders and waters. We will likely see countries wanting to share in the benefits of abatement through these agreements, particularly where they are made to access storage resources in developing economies. At the cut-off point for our 2026 report, while there were several MoUs and enabling frameworks, there were no binding government-to-government cross-border agreements in place so it's something to watch for the future.

While policy development is key to deliver the next stage of CCS deployment in Asia Pacific, the fundamentals for growth are there. And as the market continues to expand around the world - there are 113 projects operational globally - more barriers will begin to fall. The technology is mature and although the specific applications might vary, we are well beyond the proof of concept stage. The credibility and experience of counterparty operators are also being demonstrated across whole value chains and this will increasingly support the banking industry's confidence to invest. What we need to see now is public sector leadership to develop the policy frameworks and create the revenue visibility that can allow the private sector to move forward with projects.