Carbon capture and storage: current initiatives and future prospects in Japan and overseas

JAPEX is working on multiple domestic and cross-border projects that have been selected as part of JOGMEC's advanced CCS projects aimed at implementation by 2030.

There are two critical challenges common to both domestic and cross-border CCS value chain development. First is the optimisation of infrastructure, including CO2 receiving terminals. This is essential to maintain price competitiveness compared to other decarbonisation projects. Achieving this requires co-operation with emitters, particularly in optimising supply volume, injection volume and timing co-ordination, which are key to success. Second is the critical importance of public acceptance. Similar to domestic projects, gaining understanding and co-operation from local governments, communities, and residents is essential for cross-border CO2 receiving facilities.

Challenges in Implementing CCS Projects

There is growing recognition that achieving Japan's NDC requires both domestic aquifer-based CCS and cross-border CCS operations.

The following challenges exist for implementing both domestic and cross-border CCS projects:

For domestic CCS operations, CO2 storage primarily targets aquifers, and securing large-scale aquifers requires underground data collection and drilling evaluation wells to measure storage capacity. Cross-border CCS projects face profitability challenges due to higher transportation costs compared to domestic CCS operations. Therefore, it is necessary to utilise depleted oil and gas fields with proven storage safety over geological timescales, optimise transportation infrastructure including loading/unloading facilities and vessels through collaboration with CO2 emitters, and maintain continuous business operations (with stable CO2 supply systems and reliable injection operations). As the current level of carbon pricing is insufficient for establishing a transportation and storage business model, support from the government is essential for the reduction of emitters' capture, liquefaction and transportation costs and for the standardisation efforts. Particularly for storage projects, government support measures should focus on policies that enhance reduction value (such as emissions trading) and developing appropriate carbon pricing frameworks.

To reduce GHG emissions across Asia, it is important to gain local understanding in countries with depleted oil and gas fields accessible from Japan, and to establish frameworks including standardisation of terminal facilities and maritime transportation technologies necessary for cross-border CCS.

Furthermore, cross-border CCS projects require bilateral agreements to meet London Protocol requirements. While Japan has already begun discussions with some countries, bilateral agreements are expected to be concluded by 2027 to achieve CO2 injection commencement by 2030.