Japan to fund seven projects to advance CCS strategy

Japan's state-owned energy agency Jogmec has selected seven potential carbon capture and storage (CCS) projects for its financial support, aiming to accelerate the development and utilisation of the technology to drive the country's decarbonisation.

The cross-industry winners of the seven projects, comprising five domestic and two overseas projects, are to begin test drilling from the April 2024-March 2025 fiscal year and confirm how much the projects will be able to store carbon dioxide (CO2). They are likely to make a final investment decision in 2026-27. Japan is aiming to start commercial CCS business from 2030-31 with its current CCS roadmap.

The seven projects, which aim to expand hub and cluster businesses and cut costs, are projected to store a combined 13mn t/yr of CO2. The projects include those that can store 1.5mn t/yr of CO2 in north Japan's Hokkaido's Tomakomai, 2mn t/yr in the Sea of Japan side of Tohoku, 1.5mn t/yr in Higashi-Niigata, 1mn t/yr in the Metropolitan area and 3mn t/yr in the Kyusyu region, along with 2mn t/yr offshore Malaysia and 2mn t/yr in an unspecified area of Australasia.

This is the government's first financial support for CCS. It is still unclear how much Jogmec will finance each project, depending on future negotiations with the winning consortiums. The trade and industry ministry (Meti) has allocated around ¥3.5bn ($25mn) in its 2023-24 initial budget to support advanced CCS projects through Jogmec.

Japan plans to achieve CO2 storage capacity of 6mn-12mn t/yr by 2030 so that the country can start its CCS business from 2030. Tokyo aims to store 120mn-240mn t/yr of CO2 by 2050, after adding the 6mn-12mn t/yr of capacity over 20 years from 2030. Meti has estimated the country could store around 70pc of 240mn t/yr of CO2 in 2050 through the domestic projects, if it could develop 20-25 areas, including the selected five domestic areas.

Japan would need to deploy CCS and carbon capture, utilisation and storage technology to offset CO2 emissions that cannot be removed in sectors such as power, refinery, steel, chemical, cement and paper production sites. Japan aims to cut its greenhouse gas emissions to 760mn t by 2030-31, down from 1.2mn t in 2019-20.

Jogmec last year expanded its funding coverage to CCS projects, as well as hydrogen and ammonia, to help reduce domestic firms' risk exposure.

By Motoko Hasegawa