Advanced Efforts for Commercialization of CCS

1.Background

In October 2020, the Government of Japan set a goal of achieving zero greenhouse gas emissions to realize carbon neutrality by 2050, and in April 2021, declared that it aims to reduce greenhouse gas emissions by 46% compared to FY2013 by FY2030. In addition, in GX Promotion Strategy, ^{(Note 1)} the Government of Japan indicates that it will support advanced projects that will become role models for developing the business environment toward the start of CCS projects by 2030.

In May 2024, the Government of Japan established the Act on Carbon Dioxide Storage Businesses, which contains a licensing system for storage businesses, and this marked a major step toward the commercialization of CCS in Japan.

2. Outline

Against this backdrop, METI and JOGMEC recognize the importance of advanced CCS projects that aim to embark on commercialization of CCS by 2030 and that would become role models for establishing a business model that can be horizontally applied. To address this, in FY2023, they started a support measure titled Advanced CCS Projects to assist CCS projects in integrally developing the entire CCS value chain ranging from CO2 separation, capture, transportation, to storage.^{(Note 2)}

In this fiscal year (FY2024), aiming to reduce uncertainties involving CCS costs and underground storage, JOGMEC opened a new round of the call for applicants for design work for advanced CCS projects, in which successful applicants will conduct work for designing the entire CCS value chain and work for evaluating the potential storage capacity. From among the applicants, JOGMEC selected anew nine projects to which priority support will be provided.

Through these CCS projects, Japan will aim to ascertain approaches to securing an annual CO2 storage volume of from 6 to 12 metric tons per annum (Mtpa) in total by 2030.

3. Key points of the selected projects

Following on from those selected in FY2023, the nine selected projects in FY2024 target a wide range of industries, such as electric power, oil refineries, steel, chemical, pulp/paper, and cement, and capture CO2 emitted from industrial clusters in Hokkaido, Kanto, Chubu, Kinki, Setouchi, and Kyushu regions, etc. The nine projects also aim to store approximately 20 Mtpa of CO2 in total, in which five plan to store CO2 in Japan and the remaining four plan to do so in the Asia-Pacific region.

4. Future approaches to the selected projects

As the selected projects are scheduled to finally decide by FY2026 on the CCS projects in which they invest, JOGMEC will basically not plan to open another round of the call for applicants for the Advanced CCS Projects from FY2025 onward. However, this does not apply in cases where the existing CCS projects find it difficult to achieve the 2030 storage target or where such projects face exceptional circumstances, such as significant changes in the domestic or international situation. Meanwhile, JOGMEC will continue to consider the provision of support to the business feasibility studies on CCS. Moreover, aiming to continue to support CCS projects that may become role models in preparations for finally deciding on the projects to be invested in, JOGMEC will adopt a stage gate process in accordance with the progress made in the selected CCS projects and consider at the end of every fiscal year as to whether or not to continue the projects.

Notes:

• 1: Cabinet Decision on the Strategy for Promoting Transition to a Decarbonized, Growth-Oriented Economic Structure (METI News Release in Japanese)
• 2: Full-scale Commencement of Japanese CCS Projects (METI News Release)

Locations of the selected projects and companies that proposed them

Overview of Selected Projects (Listed from North to South)

1) Tomakomai Area CCS

Company	Japan Petroleum Exploration Co., Ltd., Idemitsu Kosan Co., Ltd., Hokkaido Electric Power Co., Inc.
Area of CO2 Storage	Tomakomai Area (Saline aquifer)
CO2 Storage Volume	Approximately 1.5 ~2Mtpa
CO2 Emission Source	Oil refinery, Electric power plant in Tomakomai Area
Transportation	Pipeline
Project Outline	Tomakomai Area CCS will pursue collaboration with “CCU/ Carbon Recycling” that is to reuse CO2 as resources and “BECCS” that is to combine CCS with a biomass power plant for the future.

2) Tohoku Region West Coast CCS

Company	ITOCHU Corporation, Nippon Steel Corporation, Taiheiyo Cement Corporation, Mitsubishi Heavy Industries, Ltd., INPEX CORPORATION, ITOCHU Oil Exploration Co.,Ltd., etc.
Area of CO2 Storage	Tohoku Region West Coast (Offshore saline aquifer)
CO2 Storage Volume	Approximately 1.5～1.9 Mtpa
CO2 Emission Source	Nippon Steel’s Kyushu Works Oita Area and Kawasaki Plant of DC CO., LTD. (a Taiheiyo Cement Group company) as well as local emitters near CO2 storage
Transportation	Ship and Pipeline
Project Outline	Tohoku Region West Coast CCS will promote highly scalable project that will connect various CO2 emitters from multiple locations with storage sites mainly via ship transportation, targeting hard-to-abate industries such as steel and cement industries where decarbonization goal is challenging to achieve.

3) Higashi-Niigata Area CCS

Company	Japan Petroleum Exploration Co., Ltd., Tohoku Electric Power Co., Inc., Mitsubishi Gas Chemical Company, Inc., Hokuetsu Corporation
Area of CO2 Storage	Niigata Prefecture (Oil and gas field)
CO2 Storage Volume	Approximately 1.4 Mtpa
CO2 Emission Source	Chemical plant, Pulp & Paper mill, Electric power plant in Niigata prefecture
Transportation	Pipeline
Project Outline	Higashi-Niigata Area CCS will create added-values, such as decarbonized fuels and environmental value, to chemical, pulp, and electric power plant, etc. by utilizing existing oil and gas field as CO2 storage sites.

4) Metropolitan Area CCS

Company	INPEX CORPORATION, Nippon Steel Corporation, Kanto Natural Gas Development Co., Ltd.
Area of CO2 Storage	East Coast of the Boso Peninsula, Chiba Prefecture (Offshore saline aquifer)
CO2 Storage Volume	Approximately 1.4 Mtpa
CO2 Emission Source	Nippon Steel’s East Nippon Works Kimitsu Area and multiple industries in the Keiyo Industrial Zone
Transportation	Pipeline
Project Outline	Metropolitan Area CCS will promote highly-scalable projects with hub-and-cluster CCS that is equipped with large-capacity pipeline.

5) Offshore Western Kyushu CCS

Company	West Japan Carbon dioxide Storage Survey Co., Ltd., ENEOS Corporation, JX Nippon Oil & Gas Exploration Corporation, Electric Power Development Co.,Ltd. (J-POWER)
Area of CO2 Storage	Offshore Western Kyushu (Offshore saline aquifer)
CO2 Storage Volume	Approximately 1.7 Mtpa
CO2 Emission Source	Oil refinery, Electric power plant in Setouchi/ Kyushu region
Transportation	Ship and Pipeline
Project Outline	Offshore Western Kyushu CCS will use a hub-and-cluster approach to link multiple CO2 emission sources and offshore storage sites, targeting emissions from refineries and power plants in a wide area of western Japan, including Setouchi region.

6) Northern Offshore of Peninsular Malaysia CCS

Company	Mitsubishi Corporation, ENEOS Corporation, JX Nippon Oil & Gas Exploration Corporation, JFE Steel Corporation, Cosmo Oil Co., Ltd., Nippon Shokubai Co., Ltd., Petronas CCS Solutions Sdn. Bhd.
Area of CO2 Storage	Northern offshore of Peninsular Malaysia (Offshore depleted Oil and gas field)
CO2 Storage Volume	Approximately 3 Mtpa
CO2 Emission Source	Steel plant, Chemical plant, Oil refinery, etc., in Tokyo Bay area
Transportation	Ship and Pipeline
Project Outline	The project will assess the feasibility of establishing an international CCS value chain in the Northeast coast of Peninsular Malaysia with Petronas for a wide range of industries in Tokyo Bay Area.
Remarks	As a result of the review, the proposal was evaluated as promising but further initial studies were required to evaluate its future potential. Discussions will be held to conclude a contract on the premise that the initial study is conducted.

7) Offshore Sarawak CCS

Company	Japan Petroleum Exploration Com Ltd., JGC Holdings Corporation, Kawasaki Kisen Kaisha, Ltd., Petronas CCS Ventures Sdn. Bhd., JFE Steel Corporation, Mitsubishi Gas Chemical Company, Inc., Mitsubishi Chemical Corporation, The Chugoku Electric Power Co., Inc., Nippon Gas Line Co.,Ltd.
Area of CO2 Storage	Offshore Sarawak, Malaysia (Offshore depleted Oil and gas field)
CO2 Storage Volume	Approximately 1.9~2.9 Mtpa
CO2 Emission Source	Steel plant, Electric power plant, Chemical plant, etc., in Setouchi region
Transportation	Ship and Pipeline
Project Outline	Offshore Sarawak CCS will promote combination of domestic and cross-border CO2 shipping, and CO2 storage offshore Sarawak, Malaysia with Petronas, via its subsidiary PETRONAS CCS Ventures Sdn. Bhd. for emission from a wide range of industries in Setouchi region.

8) Southern Offshore of Peninsular Malaysia CCS

Company	Mitsui & Co., Ltd. The Chugoku Electric Power Co., Inc., The Kansai Electric Power Company, Inc., Cosmo Oil Co., Ltd., Electric Power Development Co., Ltd. (J-POWER), Kyushu Electric Power Company, Inc., Resonac Corporation, Mitsubishi UBE Cement Corporation
Area of CO2 Storage	Offshore of the east coast of Peninsular Malaysia (Offshore depleted field, Saline aquifer)
CO2 Storage Volume	Approximately 5 Mtpa
CO2 Emission Source	Multiple industries including Electric power plant, Cement, Chemical and Oil refinery in Kinki/Chugoku/Kyushu region, etc.
Transportation	Ship and Pipeline
Project Outline	Southern Offshore of Peninsular Malaysia CCS will promote large-scale CO2 capture projects from multiple scalable CO2 clusters across industries in western Japan, then transport captured CO2 overseas to a hub in Peninsular Malaysia for permanent sequestration at offshore storage sites, with closely working with Petronas and TotalEnergies.

9) Oceania CCS

Company	Mitsubishi Corporation, Nippon Steel Corporation, Mitsubishi Chemical Corporation, Mitsubishi Corporation Clean Energy Ltd., ExxonMobil Asia Pacific Pte. Ltd.
Area of CO2 Storage	Oceania (Offshore depleted Oil and gas field, Saline aquifer)
CO2 Storage Volume	Approximately 2 Mtpa
CO2 Emission Source	Multiple industries including Steel plant in Chubu region (Nagoya, Yokkaichi).
Transportation	Ship and Pipeline
Project Outline	The project will assess the feasibility of establishing an international CCS value chain in Oceania region for a wide range of industries in Nagoya and Yokkaichi Bay areas.

Division in Charge

Carbon Dioxide Capture and Storage Policy Office, Carbon Management Division, Natural Resources and Fuel Department, Agency for Natural Resources and Energy