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An ecosystem approach to maritime decarbonisation in ASEAN

Centre for Strategic Energy and Resources is an independent think-and-do tank with global headquarters in Singapore and a vision of becoming the leading centre of excellence for strategic analysis and a global thought leader in energy transition and sustainability.

For more information about Centre for Strategic Energy and Resources, please contact:

  • Dr Victor Nian, CEO


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Challenges loom as ASEAN looks to accelerate its energy transition

Home to about 10 percent of the world’s population, the rapidly growing ASEAN (Association of South East Asian Nations) economies are shaping many aspects of the global economic and energy outlook [1]. According to a report published by the ASEAN Centre for Energy, the primary energy demand by ASEAN countries reached 625 million tons of oil equivalent (Mtoe) in 2017 with a projected annual growth rate of 4.1 percent till 2045 [2]. The business-as-usual projection in the consumption of fossil fuels, especially coal, would continue to dominate the region’s fuel mix given the economic, geographical, and geopolitical circumstances of ASEAN [3]. That would lead to an increase in carbon emissions from 1,686 million tons in 2017 to 4,171 million by 2040. The additional carbon emissions from ASEAN between 2015 and 2040 are expected to be roughly equivalent to those of the world’s fifth-highest emitter, Japan, in 2014 [4].

The urgency to reduce carbon emission and to address energy security concerns have somewhat accelerated the adoption of renewables, which presently meet around 15 per cent of the regional energy demand. But several practical factors are limiting the large-scale implementation of renewables in ASEAN including technology, cost, geography, and politics. In view of the uncertainties with a geopolitically turbulent future and environmental pledges, countries like Indonesia [5] and Malaysia [6] plan to suspend or limit renewable energy exports as part of the strategies to meet domestic renewable energy, decarbonisation, and foreign investment goals. As the ASEAN countries continue to face challenges in their decarbonisation journey, there is a growing concern that others will soon follow suit with renewable export limits.

Green fuels could provide the answer

A silver lining to that seemingly dull picture is the plan to embrace alternative clean energy in several ASEAN countries. In 2020, the AHEAD (Advanced Hydrogen Energy Chain Association for Technology Development) project has successfully demonstrated the possibility of creating an international hydrogen supply chain after a successful extraction of hydrogen from methycyclohexane - a liquid organic hydrogen carrier produced in Brunei and shipped to Japan. In a bid to further improve and diversify hydrogen supply capacity, Japan plans to build supply networks in both Australia and Brunei with the goal of reaching an annual supply of 300,000 tonnes of hydrogen fuel by 2030.

Several other ASEAN countries have also started exploring the possibility of hydrogen as an alternative clean fuel. In 2018, the Electricity Generating Authority of Thailand (EGAT) started the development of an integrated wind-hydrogen system to achieve better utilisation of the intermittent renewable energy resources. In 2019, Toshiba Energy Systems & Solutions Corporation and the Indonesian state-owned electric company, Perusahaan Listrik Negara (PLN) reached a partnership to develop the H2One renewable hydrogen project. Also in 2019, the Department of Energy of the Philippines reached a partnership with Australian company Star Scientific Ltd to explore the potential of retrofitting coal-fired power plants to use green hydrogen as a cleaner fuel alternative. In 2020, the state-owned utility company, Sarawak Energy in Malaysia launched the country’s first integrated hydrogen production plant and refuelling station for Kuching’s bus services. Also in 2020, Singapore commissioned a study on hydrogen imports and downstream applications jointly carried out by KBR Inc and Argus. In 2022, the Energy 2050 Committee of Singapore announced plan to embrace hydrogen in the national energy mix by 2050 as part of the country’s net-zero emission strategy.

Solving long-distance transport and storage of green fuels are key enablers for decarbonising hard-to-abate sectors

At the moment, green fuel imports represent the main strategy supporting the use of hydrogen or ammonia as alternative fuels for the maritime sector in ASEAN. Since green hydrogen and ammonia are only likely to be produced in places with excess renewable energy, such as Australia and the Nordic region, safe, economical and environmentally friendly long-distance transport quickly becomes a bottleneck with the current state of technology development. Especially, long-distance transport of liquid hydrogen is challenging due to its highly demanding storage and transport requirements (i.e. extremely low temperature and high pressure). As such, many have turned to ammonia as a potential hydrogen carrier and fuel given the industry’s familiarity in handling and shipping ammonia worldwide.

The next challenge lies with a large-scale storage of hydrogen or ammonia. In this aspect, the cost and safety concern are translated from shipping and handling at sea to storage terminals on land. Because of the volatility of hydrogen, and the fact that the flame of pure hydrogen is barely visible, fire safety will become a major concern for any country looking to hydrogen as an industrial-scale green fuel for bunkering and other applications. Research activities are under way and have shown promising results to address hydrogen safety in fire and explosion prevention and mitigation technologies. However, in the immediate term, ammonia, again, as a hydrogen carrier is perceived as a more accessible alternative bunkering fuel for near-term adoption, notwithstanding the safety and regulatory issues with large-scale storage of ammonia.

Advanced nuclear power technologies hold the promise of unlocking domestic green fuel production

If there were sufficient renewable energy resources available in ASEAN, domestic production of hydrogen or ammonia would represent the most ideal situation for the ASEAN green energy transition. In view of the rising fossil fuel prices, limited and uneven access to renewables, and the urgent need to take climate actions, the Philippines, Vietnam, Indonesia, and Singapore have further announced plans to embrace nuclear energy, especially the more advanced and safer small modular reactors including floating nuclear power plants. Such advanced nuclear power technologies can provide carbon-free base-load electricity to power economic and industrial development.

Floating nuclear power plants built upon advanced Generation IV technologies coupled with the maritime industry's rich experience in working with floating structures, hold the promise of an offshore floating multi-utility complex producing multiple energy related products including hydrogen, ammonia, methanol, electricity, and even potable water. From an energy strategy perspective, beyond addressing the need to import green hydrogen and ammonia from outside the region, such an approach can potentially turn ASEAN into a net-exporter of clean energy in the long-term, thereby positioning the region as a green energy bunkering hub for the maritime industry.

Full electric vessels shouldn't be ruled out

An ongoing study by the Centre for Strategic Energy and Resources on maritime decarbonisation includes maritime electrification amongst the options of hydrogen, ammonia, LNG (liquefied natural gas), and methanol to be examined. The idea of electrification is to combine offshore floating energy technologies, such as wind, solar and nuclear, with marinised energy storage and floating charging stations to provide fast charging for full electric vessels. The study has shown commercial feasibility of such an electrification concept supported by floating nuclear power plant when compared to conventional bunkering for ocean-going vessels. Even in the absence of environmental tax or other monetary related regulations under a prescribed set of assumed key performance indicators around cost and technical characteristics. In the near term, such a concept is well positioned to support coastal and regional vessel electrification, which could accelerate the making of “green routes” for regional sea trade.

Clean energy ecosystems require cross-border regulatory and legal frameworks

What remains to be deliberated by regional economies is the appropriate policy, regulatory and legal framework facilitating and governing the safe and economical use of clean energy technologies. Consultations with regional industries and think tanks are absolutely critical in gaining the broader support for a clean energy ecosystem beyond the territorial boundaries as well as having access to insights and strategic thinking on the regional and global energy trends. A close collaboration of government, think tanks, and industry can help facilitate the creation of sustainable value chains, which could help justify infrastructure and technology investments. In turn, the lessons learnt can feed back to enhance policy and regulatory frameworks supporting the clean energy ecosystems, which would ultimately accelerate the energy transition journey towards a net-zero future for hard-to-abate sectors like the maritime industry and for the entire economy.

[1] “Southeast Asia Energy Outlook 2019,” International Energy Agency, Paris. [2] The 6th ASEAN Energy Outlook 2017-2040, ASEAN Centre for Energy, Jakarta. [3] Victor Nian, Muhammad Rizki Kresnawan, and Beni Suryadi, “Setting Emission Standards for Coal-Fired Power Plants in ASEAN,” Policy Brief, ASEAN Climate Change and Energy Project (ACCEPT), ASEAN Centre for Energy, July 13, 2021. [4] World Bank, World Development Indicators, 2018 ed. World Bank Group, Washington DC. [5] [6]

For more information please contact

  • Dr Victor Nian, CEO


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