Japanese firms sign deals to study CCS in Malaysia

More Japanese firms are looking to export their CO2 emissions to Malaysia to help achieve net zero goals by 2050, signing deals to study carbon capture and storage (CCS) in the southeast Asian country.

Japanese firms are looking to export CO2 as domestic storage sites would be insufficient to store all of the country's possible emissions.

Japanese power producer Jera said on 2 April that it has agreed with Malaysia's state-owned Petronas' subsidiary Petronas CCS Solutions to jointly explore the possibility of creating a carbon capture and storage (CCS) value chain between the two countries. The companies will look into the feasibility of separation and capture of CO2 emitted by Jera in Japan and its injection into gas fields in Malaysia, while studying shipping and receiving conditions for cross-border CO2 transport, including transportation methods.

Japanese trading house Mitsui said on 2 April that it has separately signed an initial agreement with the country's cement maker Mitsubishi UBE Cement (MUCC) and petrochemical producer Resonac to work together with an aim to establish a CCS value chain between Japan and Malaysia. MUCC and Resonac will conduct studies on separation, capture, liquefaction and temporal storage of CO2 emitted at their facilities, while Mitsui will study transportation and storage offshore Malaysia.

Mitsui is currently developing a CCS project offshore Malaysia with Petronas CCS Solutions and French firm TotalEnergies, aiming to start storing CO2 by around 2030.

Mitsui has already partnered with Japanese utility Chugoku Electric Power to develop a CCS value chain between Japan and Malaysia, and has collaborated with fellow utility Kansai Electric Power on CCS, with the targeted storage area undisclosed.

The process of building CCS value chains between Japan and Malaysia has gained momentum after Japan's trade and industry ministry and state-owned energy agency Jogmec agreed with Petronas in September 2023 to discuss a regulatory and general framework to establish a mechanism for CO2 transportation from Japan and rules related to storage in Malaysia.

More involvement in overseas CCS projects is inevitable for Japan because of its limited domestic storage sites. Tokyo aims to add 6mn-12mn t/yr of CO2 storage capacity domestically and overseas from 2030, targeting 120mn-240mn t/yr by 2050. The government has projected Japan could store up to 70pc of its forecast 240mn t/yr of CO2 emissions in 2050.

By Motoko Hasegawa