Carbon ships? The path to net zero can be overlooked by sea.


It’s no secret that we urgently need to address climate change. The IPCC’s Sixth Assessment Report called for net zero carbon dioxide emissions from all human sources in order to stabilize the global climate.

Perhaps more surprising are two insights from the 23rd World Petroleum Congress, held in Houston last month, where top executives from the world’s leading oil and gas companies participated as speakers or panelists. Initially, an attempt was made to reposition Houston not as the old-school energy capital but as the leader of the global energy transition. Next came the industry focus on CO2 management solutions for the energy transition, in particular CO2 capture, use and sequestration.

Despite its technological maturity and feasibility, carbon capture has had limited success as a climate solution, mainly because not all parts of the process – from capturing carbon emissions from industrial sources to costly pipeline transportation, to safely storing or converting the carbon into an economical one viable product – economically oriented. This is true even in places like Houston, where there are many inexpensive and workable industrial sources for collection.

Dual-use shipping could change that by creating a global carbon market and reducing the cost of moving carbon from high-emission countries in Asia to the Gulf of Mexico, where geological formations provide readily available and safe storage.

Dual-use shipping – combining liquefied natural gas and carbon dioxide transport on the same ship – could drastically reduce the costs of decarbonization and accelerate the energy transition. Keep the following in mind: It takes approximately 25 days for LNG to be shipped from the US Gulf Coast to South Korea or Japan. The ship then returns unloaded, takes another 25 days and incurs the same fixed crew, maintenance and hull costs as the loaded ship, while the fuel costs for the journey with the empty ship are only around 20 percent lower. Without this cost saving, the returning ship can be loaded with carbon dioxide that is captured in power plants or refineries near LNG import terminals in Asia and then dumped in the Gulf of Mexico when the ship returns to the LNG export facilities. Our analysis shows that this novel transportation mechanism between the largest US export terminal in Sabine Pass and the import facilities in Samcheok, South Korea, or Joetsu, Japan, can reduce effective transportation costs to USD 2.5 per tonne of carbon dioxide. That is
75 percent less than if carbon dioxide captured domestically within the USA were transported via pipelines for sequestration in the Gulf of Mexico.

We are aware of our focus on East Asia in terms of CO2 sources and the use of dual-use ships, despite the distance to the USA. Japan and South Korea are among the four largest carbon emitters in the Asia-Pacific region. Both countries are currently importing around 95 percent of their energy requirements, mainly relying on LNG. The current outlook for natural gas promises a strong rebound, with projected annual growth rate of 1.5 percent for LNG trading through 2025. The Asia-Pacific region will drive half that demand, and the US will have the largest LNG by 2022 -Export capacity.

As a global leader in manufacturing, emissions from Japan and South Korea are expected to remain at current levels or even increase over the next few decades, making carbon trading inevitable and an attractive proposition to meet the Paris Agreement goals. They have set the carbon pricing through the Japanese carbon tax and the Korean emissions trading system and are supported by public awareness and support for carbon capture. Opinion polls show that around half of respondents in Japan and South Korea were aware of carbon sequestration, compared with 8 percent of the public in Sweden, 3 percent in the United States, and 2 percent in the UK. These factors make Japan and South Korea excellent, scalable, and workable sources of carbon, but they lack effective sequestration capacity.

This is where the United States can offer its services. With nearly 3,000 billion tons of sequestration sites currently accessible, the US has the largest carbon storage capacity both on land and at sea, far more than the country’s annual carbon dioxide emissions. The Gulf Coast accounts for 60 percent of this capacity. Years of research have identified the potential for safe and permanent offshore sequestration in the area and is ready for use. Additionally, one of the greatest assets of the Houston area is its highly skilled workforce, better able to support carbon management than anywhere else in the world.

From a political point of view, too, the US is well positioned to participate, even if dual-use shipping requires some adjustments. Although this does not directly benefit the capture or transportation of carbon dioxide, Section 45Q of the federal tax law, which provides incentives to sequester carbon, can currently adequately support the entire value chain of carbon management combined with carbon pricing policy in East Asia. However, 45Q is currently limited to carbon dioxide captured in the US. Your focus on the US must be changed in order to achieve the political goal of combating global climate change.

We have our work to ourselves. It is time the United States, and Houston in particular, accelerate global carbon trading, find incentives to complete their value chain, and transform our climate change strategies quickly and equitably.

Krishnamoorti is the Chief Energy Officer at the University of Houston. Datta is a researcher at UH Energy and a PhD student in the Department of Political Science in the Public Policy and International Relations program.

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