Japan signs cooperation memorandum with Malaysia, opens door to first cross-border CCS

Japan's Ministry of Economy, Trade and Industry signed on Oct. 17 a memorandum of cooperation in the field of carbon capture and storage with Malaysia's Ministry of Economy, METI said, marking the first step toward opening up future potential for cross-border CCS projects between the two countries.

"I believe it opens up the possibilities for the first cross-border CCS," Hiroshi Hasegawa, director of international strategy on energy resources at METI, told Platts, part of S&P Global Energy, in Tokyo.

"It is about opening up the future potential for cross-border CCS between Japan and Malaysia and discussing the consideration of institutional arrangements for that purpose in both countries," Hasegawa said.

The MOC, signed by METI minister Yoji Muto and Malaysia's Minister of Finance II Amir Hamzah Azizan, who also serves as acting economy minister, was presented at a ceremony held on the sidelines of the 3rd Asia Zero Emission Community Ministerial Meeting in Kuala Lumpur. Muto and Chang Lih Kang, Malaysia's science, technology and innovation minister, were present at the ceremony.

Malaysia's Ministry of Economy has not responded to a request for comment.

Under the MOC, METI and the Malaysian government will initiate bilateral discussions through a joint committee to facilitate the implementation of the cooperation, including bilateral discussions on cross-border CCS, CCS policy discussions and strengthening technical cooperation in areas such as transportation technology, according to the Japanese ministry.

The MOC, however, is not a formal agreement or arrangement required by the London Protocol, which Japan has ratified, for cross-border CO2 transport, Hasegawa said, adding that the MOC will mark the start of discussions to work out details such as responsibilities for CCS.

The signing of the MOC comes after Platts reported in April that Japan had begun initial discussions with Malaysia -- which hosts three of the four advanced CCS projects abroad -- on establishing arrangements for cross-border CO2 transport.

These are part of nine projects selected by state-owned Japan Organization for Metals and Energy Security to store around 20 million metric tons/year of CO2 in Japan and the Asia-Pacific, including five projects in Japan, three in Malaysia and one in Oceania.

"The government's perspective is that these projects aim to develop the business environment by 2030, with a hope that those could commence in the early 2030s," Hasegawa said.

"As for how we view other countries, we are not excluding Indonesia or Australia at all," he said, referring to the selected project in Oceania, for which a specific country has yet to be identified.

Other agreement

In a separate development, Japan's INPEX signed on Oct. 17 a new agreement with Chubu Electric to expand a joint study on the feasibility of establishing a CCS value chain, involving the separation and capture of CO2 in Japan and its transportation from the Port of Nagoya in Aichi Prefecture to Australia for storage.

The new agreement, signed on the sidelines of the AZEC Ministerial Meeting, aims to further enhance the value chain's feasibility and is based on the positive preliminary findings of the joint study that the two companies initially announced in October 2024.

Under the new agreement, INPEX and Chubu Electric will continue to study key elements of the CCS value chain between the Port of Nagoya and Australia for CO2 storage, including optimizing CO2 transportation methods along the value chain, such as loading in Japan, shipping and receiving in Australia, according to INPEX and Chubu Electric spokespeople.

It will include an assessment of the legal and regulatory landscapes in Japan and Australia to understand the likely timeline for implementing the framework necessary to support the CCS value chain. The joint study also aims to continue enhancing the feasibility of the CO2 value chain.

Since being awarded a greenhouse gas storage assessment permit in 2022, together with TotalEnergies CCS Australia and Woodside Energy in the Bonaparte Basin, INPEX has been developing a CCS project aimed at starting CO2 injection around 2030, with the goal of reducing GHG emissions at its operated Ichthys LNG project, according to INPEX.

The Bonaparte CCS project, in which INPEX holds a 53% stake as operator alongside TotalEnergies at 26% and Woodside Energy at 21%, plans to have a potential carbon storage capacity of more than 10 million mt/y, injecting CO2, including from the Ichthys LNG project.

The AZEC Ministerial Meeting, attended by ministers from Australia, Brunei Darussalam, Cambodia, Indonesia, Japan, Lao PDR, Malaysia, the Philippines, Singapore, Thailand and Vietnam, reaffirmed their commitment to accelerate efforts to carry out energy transitions according to their respective domestic pathways and circumstances and to enhance cooperation within AZEC, according to a joint statement issued Oct. 17.