Japan steps up carbon cycling cooperation, latest with US to tackle climate change

Tokyo — Japan is stepping up its cooperation on carbon recycling as a means of combating climate change, signing the latest memorandum with the US to collaborate in areas including carbon dioxide plus hydrogen to chemicals and fossil fuels or waste to hydrogen technologies.

"In response to the climate change issue, Japan and the US share basic principles on responding to it with all kinds of energy and technology," director-general of oil, gas and mineral resources at the Ministry of Economy, Trade and Industry, Ryo Minami, told S&P Global Platts Oct. 14.

"In other words, we are not responding to the climate change issue with specific types of energy or technology," Minami said. "Instead, we are exploring various possibilities in all types of energy and technology because the climate change issue is extremely difficult to tackle."

METI and the US Department of Energy on Oct. 13 signed a memorandum of cooperation in the field of carbon capture, utilization and storage and carbon recycling on the sidelines of the online International Conference on Carbon Recycling hosted by Japan.

Under the agreement, METI and the DOE will enhance collaboration in the area of CCUS and carbon recycling as well as establishing a hydrogen value chain, in developing carbon utilization and carbon recycling technologies, such as carbon dioxide plus hydrogen to chemicals, and fossil fuels or waste to hydrogen technologies.

Exploring projects

The bilateral cooperation may also cover areas including CO2 transportation, as well as jointly exploring prospective CCUS, carbon recycling projects in Japan, the US or in third countries.

Minami, who signed the memorandum with Steven Winberg, assistant secretary for fossil energy at the DOE, said both countries would start exchanging information on research and development projects.

In the US, oil and gas producers have turned to carbon capture and injection technology in response to federal tax credit incentives and as offsets to meeting increasing emissions targets.

Congress' Section 45Q program offers $50/mt tax credits for CO2 permanently stored underground and $35/mt credits for CO2 used in enhanced oil recovery.

Permian driller Occidental Petroleum, which pushed for the legislation, is a leader in enhanced oil recovery, which pumps captured CO2 into reservoirs to re-pressurize them and increase production.

Seeking cooperation

Japan's latest carbon recycling cooperation with the US followed signing of a similar memorandum of cooperation with Australia in 2019.

On the sidelines of the conference, Minami said METI had also agreed to seek cooperation with the Oil and Gas Climate Initiative, or OGCI -- a group of majors, which produce over 30% of global operated oil and gas production.

The Japanese government and state-owned Japan Oil, Gas and Metals National Corporation had decided to seek cooperation with OGCI in the area of carbon recycling, he added.

OGCI consists of BP, Chevron, CNPC, Eni, Equinor, ExxonMobil, Occidental Petroleum, Petrobras, Repsol, Saudi Aramco, Shell and Total.