While policy gaps hinder widespread CCUS deployment in Southeast Asia, emerging cross-border CO₂ markets and regional collaborations are creating new opportunities for industrial decarbonisation by the end of the decade.
Southeast Asia risks falling further behind advanced economies in deploying carbon capture, utilisation and storage (CCUS) without stronger policy incentives, but nascent cross‑border CO₂ markets and specialised infrastructure could create new industrial decarbonisation opportunities by the end of the decade.
According to the original CGS report, the region’s CCUS activity remains concentrated in narrow, commercially viable niches such as natural gas processing and enhanced oil or gas recovery (EOR/EGR). Industry data cited in the report shows that, as of mid‑2025, natural gas processing accounted for roughly 85% of global CCUS projects, with a similar share of captured CO₂ routed to EOR/EGR , a pattern driven by the ability to monetise captured carbon while meeting gas quality requirements.
The economics for wider CCUS deployment in hard‑to‑abate sectors , notably cement and steel , are still unfavourable in Southeast Asia. The report highlights a lack of “meaningful incentives or penalties” compared with markets such as the US, where the 45Q tax credit and other measures have diversified CCUS use cases, and parts of Europe where carbon pricing, direct capex support, operating subsidies and mandatory storage targets underpin broader uptake. Regional policy weakness has left state actors and national oil companies to shoulder most project development, often focusing on sour gas treatment and EOR/EGR that can absorb the cost burden.
Strategic partnerships and nascent hubs point to a different trajectory, however. National firms are actively positioning to capture value from international CO₂ flows and offshore storage. Petronas has formed multiple international collaborations to study cross‑border CCS value chains and saline aquifer storage potential, including joint assessments with international partners to evaluate separation in Japan and storage capacity in Malaysia’s Penyu Basin. Indonesia has moved similarly, with a framework agreement between Pertamina, ExxonMobil and KNOC to develop a CCS hub in the Sunda‑Asri basins, while Malaysia’s deep saline reservoirs are being examined as the foundation for a regional storage hub.
The CGS report suggests a plausible commercial pathway: importing liquefied CO₂ from high‑emitting industrial centres such as Japan, South Korea and Singapore into Malaysian, Indonesian and Thai terminals for subsea transfer and long‑term injection. Realising that supply chain will require specialised liquefied CO₂ carriers, export/import terminals, subsea pipelines and offshore injection facilities , assets that regional energy and marine contractors are already pursuing. The report notes Malaysian firms’ moves into European CCS markets as evidence of capability build‑out: MISC’s plans for LCO₂ shipping, MMHE’s offshore injection expertise, PetGas’s potential role in terminal operation under long‑term contracts, and domestic players’ stakes in European transport and injection projects. Yinson’s minority stake in Norway’s Havstjerne project and Bumi Armada’s push to market floating storage and injection unit technology in Europe are cited as early strategic bets.
Policy and finance remain the principal constraints. International analyses, including work by multilateral organisations and think tanks, underscore that targeted incentives, clear regulatory frameworks on site selection, permitting, long‑term liability and ownership, and access to external financing will be necessary for CCUS to scale without undermining energy and economic security. The OECD and regional policy studies recommend strengthened regional cooperation on CO₂ transport and storage infrastructure and targeted public support to lower the capital intensity of first‑of‑a‑kind projects. The CGS report echoes CSIS findings that external funding and technical assistance could reduce reliance on high‑carbon backstops such as expanded coal use or increased dependency on single external partners.
For industrial decarbonisation stakeholders, the near term looks like a bifurcated market: continued, limited domestic CCUS deployment driven by mandatory gas specifications and state energy companies, alongside an emerging export‑import storage economy that could monetise the region’s geological advantages. The commercial prize will go to firms that can deliver integrated CO₂ logistics , shipping, terminal operation, subsea pipelines and offshore injection , and to policymakers that align incentives, underwrite early risk and clarify long‑term liability and ownership arrangements.
According to the original report, while structural barriers are significant, the combination of geological storage capacity, incumbent energy‑sector capabilities and growing demand for cross‑border CO₂ management could unlock “significant new business opportunities by the end of the decade” , provided governments and industry close the policy and finance gaps that currently hinder broader CCUS adoption.
- https://www.businesstoday.com.my/2025/12/07/weak-incentives-slow-ccus-adoption-but-opportunities-emerge/?utm_source=rss&utm_medium=rss&utm_campaign=weak-incentives-slow-ccus-adoption-but-opportunities-emerge – Please view link – unable to able to access data
- https://www.reuters.com/business/energy/petronas-taps-adnoc-storegga-evaluate-carbon-capture-storage-malaysia-2024-08-20/ – In August 2024, Petronas, Malaysia’s state energy firm, partnered with ADNOC and Storegga to assess CO₂ storage solutions in Malaysia. The collaboration focuses on evaluating the CO₂ storage potential of saline aquifers and developing CCS infrastructure in the Penyu Basin, aiming for a capacity of at least 5 million tonnes per year by 2030. Malaysia’s deep saline aquifer reservoirs present a significant opportunity for establishing a CCS hub in Southeast Asia, with project activities slated to commence later in 2024.
- https://www.reuters.com/sustainability/climate-energy/malaysias-petronas-inks-deal-with-jera-study-carbon-capture-storage-2024-04-02/ – In April 2024, Petronas signed a joint study agreement with Japanese power generation company JERA to evaluate the feasibility of a carbon capture and storage (CCS) value chain. The study aims to assess the separation and capture of CO₂ emitted by JERA in Japan, cross-border transportation, and CO₂ storage in Malaysia, with the goal of reducing greenhouse gas emissions in the Asia Pacific region, particularly in Malaysia and Japan.
- https://www.reuters.com/markets/deals/indonesias-pertamina-exxonmobil-knoc-sign-deal-ccs-hub-development-2024-05-15/ – In May 2024, Indonesia’s state energy firm Pertamina, U.S. major ExxonMobil, and South Korea’s KNOC signed a framework agreement for a carbon capture and storage (CCS) hub development in Indonesia. The partnership focuses on developing and building the CCS hub in the Sunda-Asri basins in the Java Sea, with KNOC participating by channeling its emissions into the facility. Indonesia aims to utilize its depleted oil and gas reservoirs and saline aquifers as carbon storage, with the government issuing a regulation allowing CCS operators to set aside … ₂.
- https://www.csis.org/analysis/energy-technologies-and-decarbonization-southeast-asia – A report by the Center for Strategic and International Studies (CSIS) highlights that Southeast Asian governments face challenges in deploying emerging energy technologies, including carbon capture, utilization, and storage (CCUS). The report emphasizes the need for external funding and technical support to implement these technologies and suggests that without such support, countries may increase dependency on coal or seek assistance from China, potentially undermining their national and energy security goals.
- https://www.oecd.org/en/publications/carbon-capture-utilisation-and-storage_c90c6043-en.html – The OECD report discusses the role of carbon capture, utilization, and storage (CCUS) technologies in supporting clean energy transitions in Southeast Asia. It highlights the potential of CCUS to address emissions from existing power and industrial assets and to underpin new economic opportunities associated with the production of low-carbon hydrogen and ammonia. The report also emphasizes the importance of regional cooperation in developing CO₂ transport and storage infrastructure for efficient CCUS deployment.
- https://www.oecd.org/content/dam/oecd/en/publications/reports/2021/07/carbon-capture-utilisation-and-storage_dad87b22/c90c6043-en.pdf – The OECD report provides an executive summary on the opportunity of carbon capture, utilization, and storage (CCUS) in Southeast Asia. It discusses the development of CCUS regulations, including site selection, permitting requirements, long-term ownership, and liability for stored CO₂. The report emphasizes the need for targeted policies and international financial support to address challenges such as high capital investment requirements and untested insurance and financial markets, which are critical for successful CCUS deployment in the region.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
10
Notes:
The narrative is recent, published on December 7, 2025, with no evidence of prior publication or recycling. The report cites data up to mid-2025, indicating timely information. No discrepancies in figures, dates, or quotes were found. The content appears original and not republished across low-quality sites or clickbait networks. The presence of updated data suggests a high freshness score.
Quotes check
Score:
10
Notes:
No direct quotes were identified in the narrative, indicating a lack of reused content. The absence of direct quotes suggests potential originality or exclusivity.
Source reliability
Score:
7
Notes:
The narrative originates from Business Today, a Malaysian business media platform. While it provides timely news and analysis, its reputation and credibility are not widely established. The lack of a clear author or verifiable editorial standards raises some concerns about the source’s reliability.
Plausability check
Score:
8
Notes:
The claims about Southeast Asia’s lag in CCUS adoption due to weak incentives align with known industry challenges. The mention of specific companies like Petronas and Yinson, and projects like Norway’s Havstjerne, are verifiable and add credibility. However, the absence of supporting details from other reputable outlets and the lack of specific factual anchors (e.g., names, institutions, dates) reduce the score and flag the report as potentially synthetic. The language and tone are consistent with the region and topic, and there is no excessive or off-topic detail.
Overall assessment
Verdict (FAIL, OPEN, PASS): OPEN
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The narrative is recent and appears original, with no evidence of recycled content or reused quotes. However, the source’s reliability is uncertain due to the lack of a clear author and verifiable editorial standards. While the claims are plausible and align with known industry challenges, the absence of supporting details from other reputable outlets and the lack of specific factual anchors raise concerns about the report’s authenticity. Therefore, the overall assessment is OPEN with medium confidence.
