The Path for the Development of CCS in Japan
Mizuho Industry Research
- Carbon Dioxide Capture and Storage (CCS) is a technology that captures CO2 from fossil fueled power stations or industrial facilities, transports it from the place of emission, and stores it in an appropriate place underground. It is an effective way to reduce CO2 emissions, especially in industries that emit a large amounts of CO2 in production processes. As a technology that plays an important role to achieve a carbon-neutral society in long-term, it is drawing much attention from global leading players. Recently, the activities of leading CCS countries that actively promote CCS have been gaining momentum, such as North America, which is accelerating business development by utilizing existing infrastructure and providing policy support; Europe and the United Kingdom, which are promoting national projects as measures for decarbonization; and Australia, which is leveraging its favorable geographic environment for CCS.
- Japan is also planning to develop policy support. The “CCS Business Law (p)” is scheduled to be established based on the Final Summary of the Japanese CCS Long-Term Roadmap announced in 2023, and a number of “Advanced CCS Projects” were selected recently. In addition to these efforts to establish a first CCS project, it will be important to discuss how Japanese CCS should be competitive on a global basis in the long term, and the measures to achieve the goal.
- In this report, we review the current global and Japanese CCS environment and the current status of each CCS value chain, and consider the future of the CCS industry in Japan. In particular, we focus on how Japanese CCS industries can be “The growing industry sectors that contribute to the circulation and expansion of Japan’s national wealth at each stage of CO2 capture, transportation, and storage, and contribute to achieve a carbon-neutral society in Japan, while also being able to win over global business”.
- To realize the future vision of CCS in Japan, it is crucial for Japan to demonstrate its strength and presence at each stage of the CCS value chain. Japan should leverage its large CO2 emissions and standardize technologies based on the best practices of leading industry players. By thoroughly utilizing these technologies, lower cost and higher quality can be achieved.
- In addition, when the trade volume of CO2 increases in the future, frictional inefficiency in the value chain of CCS will become a cost push issue. If Japan can establish an entity that plays the role of an “aggregator” that performs optimization in order to minimize cost inefficiencies, Japan may be able to promote optimization in the use of CCS in Japan and use it to its advantage in acquiring CCS business on a global basis.
- These developments will require both business players taking on innovative challenges as well as solid policy support from the government with a long-term strategy for the national wealth. If joint cooperation between the public and private sectors is pursued, it will be quite possible for CCS in Japan to realize its future vision.