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ECONOMY

METI to provide support for overseas projects in underground CO2 storage

  • February 21, 2021
  • , Nikkei , p. 1
  • JMH Translation

The Ministry of Economy, Trade and Industry (METI) will provide funding support for overseas projects to recover carbon dioxide (CO2) and store it underground. CO2 recovery and storage projects will be added as targets for investment and loan guarantees, which were previously limited to oil and gas field development. METI’s initiative will support Japanese companies’ participation in underground CO2 storage, which is increasingly recognized as a method to reduce greenhouse gas emissions to net zero.

 

The recovery and storage of CO2 is called carbon capture and storage (CCS). At such facilities as coal-fired power plants, CO2 is captured and stored underground instead of being released into the atmosphere. Possible storage places are oil and gas fields whose extraction has been completed and deep geological formations where CO2 can be stored for a long time.

 

Greenhouse gas emissions can be considered to be “net zero” if the amount of CO2 captured and stored is the same as the amount emitted. Verification tests are being conducted worldwide, and some projects have been implemented. In Australia, a local government has mandated that 80% of the CO2 emitted by Chevron’s liquefied natural gas (LNG) project be captured and stored. These kinds of mandates may become widespread.

 

Japan Oil, Gas and Metals National Corporation (JOGMEC), which is under METI’s jurisdiction, supports oil and gas field development in which Japanese companies participate. JOGMEC invests in joint ventures with resource-rich countries and guarantees loans.

 

CO2 capture and storage, considered to be part of natural resource development, will be eligible for JOGMEC’s investment and loan guarantees. Many projects may cost hundreds of billions of yen, and the enormous amount of funds needed is an issue. CO2 capture has been discussed at the METI Advisory Committee for Natural Resources and Energy and will be incorporated in Japan’s basic policy on energy, which will be reviewed as early as the summer of 2021.

 

The Japanese government’s goal is to reduce greenhouse gas emissions to “net zero” by 2050. The government is increasing renewable energy use, while positioning CO2 capture and storage as an important technology with the expectation that a certain amount of coal-fired power generation will still be necessary in 2050.

 

Japan’s cooperative stance towards retrieval and storage projects emphasized by resource-rich countries is expected to lead to a stable procurement of resources, such as natural gas. It is hoped that Japanese companies that implement power plant construction will gain technical expertise [in CO2 capture and storage] overseas and utilize their expertise for projects in Japan.

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