Japanese energy companies are progressing multiple carbon capture and storage (CCS) projects domestically and internationally to meet national emissions targets and corporate goals.

Domestic CCS Project Development

Inpex is advancing its Metropolitan CCS project offshore Chiba, planning to drill two wells in 2026 with a final investment decision targeted for 2027. The project has a planned initial injection rate of 1.3 million tonnes per annum (tpa), with potential expansion to 5 million tpa. This project is one of nine 'Advanced CCS projects' selected by the Japan Organization for Metals and Energy Security (Jogmec). Inpex is also involved in the Tohoku region west coast CCS project. Another company, Japex, commenced drilling for its Tomakomai area CCS project in Hokkaido in December. Collectively, these nine projects aim to achieve Japan's target of storing 6 million to 12 million tpa of CO2 by 2030, supporting the broader goal of carbon neutrality by 2050.

Challenges and Government Role

Government support is considered fundamental due to high technology costs and an early-stage domestic carbon market. High costs associated with CO2 carrier transportation and infrastructure have influenced strategy, prioritizing domestic pipeline transport initially, with offshore transport for domestic and foreign markets planned for a later phase. Profitability remains a challenge, with concerns also extending to the extent of monitoring required post-injection. A key commercial hurdle is that the total cost across the CCS value chain often exceeds the current carbon price, making projects difficult to commercialize without intervention. Therefore, government support mechanisms, such as price difference schemes, are seen as crucial for enabling commercialization.

International Collaboration and Standardization

For cross-border CCS initiatives, international standardization of specifications—particularly regarding CO2 impurities—is viewed as beneficial. Standardizing CO2 specifications throughout the entire value chain, from emission to transport to storage, is important and is being promoted by the Japanese government. This dynamism is reflected in Japan's potential evolving role from an importer of fossil fuels to an exporter or transporter of liquid CO2 to countries like Malaysia.

Integration with Broader Corporate Strategy

Inpex's CCS activities align with its 'Inpex Vision 2035', which includes a lower-carbon pillar to integrate CCS into natural gas and LNG projects. A quantifiable goal is to reduce carbon emissions intensity by 60% across the company's portfolio. Internationally, Inpex is evaluating CCS initiatives at existing facilities and new projects, such as a potential "net-zero" third train expansion at its Ichthys LNG project in Australia, which would incorporate low-carbon and CCS elements.