One-third of the agreements under AZEC are related to fossil fuel technologies. (Photo: Government of Japan)
The Asia Zero Emissions Community (AZEC), led by Japan, aims to unite ASEAN countries and Australia in driving the transition to zero emissions.
However, a study reveals that more than a third of the collaborations under AZEC involve fossil fuel technologies. The report suggests that these "false solutions" could make it harder for these countries to decarbonize, potentially increasing their dependence on fossil fuels at a higher cost.
Study tracks Japan’s AZEC clean projects
The report, published in October by the research organization Zero Carbon Analytics, tracks the progress of AZEC since its inception in 2023. A total of 158 memoranda of understanding (MOUs) have been signed, of which 56 involve fossil fuel technologies, accounting for over 35%. In contrast, only 11 agreements, or 7%, focus on wind and solar energy.
Among the fossil fuel technologies, carbon capture cooperation agreements were the most frequent, with 23 signed. This was followed by agreements on non-green ammonia and co-firing ammonia (22), non-green hydrogen (17), and natural gas and liquefied natural gas (LNG) (17). By country, Japan and Indonesia signed the most agreements, totaling 68, or approximately 43%, followed by Thailand (15%), Malaysia (11%), and Vietnam (1%).
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AZEC agreements by country and technology. (Source: Zero Carbon Analytics)
The report argues that developing fossil fuel technologies could expose AZEC member countries to risks related to carbon emissions, financial feasibility, and affordability, potentially delaying the International Energy Agency's (IEA) 2050 net-zero energy sector goals. Specifically, the study highlights the impacts of LNG, non-green ammonia and ammonia co-firing, and carbon capture and storage (CCS) technologies.
Three technologies potentially exacerbate carbon emissions
LNG, primarily composed of methane, is the second-largest contributor to global warming after carbon dioxide. Many Southeast Asian countries import LNG, and its price is subject to market fluctuations. For instance, during the 2022 energy crisis, the average price of LNG in Asia doubled compared to the previous year.
Non-green ammonia combustion and ammonia co-firing produce carbon dioxide. In cases where the ammonia mixture is less than 50%, carbon emissions can be higher than burning natural gas alone. Moreover, ammonia requires more volume than coal to generate the same amount of electricity, which drives up power generation costs. Coal-fired power plants would also need to be retrofitted to co-fire ammonia, with capital expenditures increasing by 11% for plants mixing ammonia at 20%.
Regarding carbon capture, nearly half of the projects in Southeast Asia are based on AZEC agreements, most of which aim to increase natural gas and oil production. However, as carbon capture technology is still not mature, actual capture rates often fall short of targets, and there is also the risk of carbon leakage.
A report from Oxford University’s Smith School of Enterprise and the Environment also estimates that relying heavily on carbon capture technology, rather than increasing renewable energy use, electrification, and improving energy efficiency, could lead to an additional $30 trillion in overall costs.
Source: Zero Carbon Analytics, Energy Track Asia
