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Blockchain market for captured carbon eyed by Mitsubishi Heavy

  • August 14, 2021
  • , Nikkei Asia , 5:50 a.m.
  • English Press

TOMOYOSHI OSHIKIRI, Nikkei staff writer

 

TOKYO — Mitsubishi Heavy Industries and IBM Japan will create a carbon capture trading market as plastics makers and others come up with innovative ways to use carbon dioxide as a raw material.

 

By bolstering trading of the global-warming gas so that it is used productively in materials, the market, which is scheduled to go online in 2025, could aid efforts to decarbonize the economy.

 

Mitsubishi Heavy, which holds a 70% share of the global market for carbon capture plants, will place sensors throughout the distribution chain, including the transport network and sequestration facilities. This will allow the trading system to be developed with IBM Japan to cover the entire process from carbon capture to carbon storage levels. The data will be secured with blockchain technology.

 

Power companies and steelmakers are among the expected sellers, with chemical and fuel producers as buyers. Financial institutions, energy companies and other operators in the infrastructure sector will be consulted in setting up the trading market. Trial operations in Japan may start next year leading up to full trading as early as 2025.

 

Trading of captured carbon currently takes place directly between companies. But there is no general market with buyers and sellers. By providing better access to buyers, a trading system is seen helping fuel innovation while sellers would become more willing to invest in sequestration facilities.

 

Carbon capture and storage is the process of capturing carbon dioxide when it is expelled from smokestacks at factories or power plants before it enters the atmosphere.

 

Much of the carbon captured at factories is stored underground. Asahi Kasei has developed ways to produce polycarbonate and urethane plastics from carbon dioxide. Similarly, companies are making strides in tapping carbon dioxide in the production of cement and jet fuel.

Whether the new trading market catches on will hinge on compatibility with the carbon trading mechanisms in the European Union and elsewhere. Under the existing cap-and-trade framework, it is unclear if captured carbon sold to a chemical manufacturer counts toward carbon credit for the seller.

 

Carbon capture plants have been increasingly adopted by power utilities and factories around the world. Although captured and sequestered carbon dioxide totals 40 million tons annually, or 0.1% of overall CO2 emissions, the amount is expected to grow sharply.

 

Carbon capture, utilization and storage will account for nearly 20% of global CO2 emissions reduction in 2070, the International Energy Agency forecasts.

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