Japan’s CCUS policy

Oil and Gas Division
Agency for Natural Resources and Energy
11. Footsteps of CCS in Japan2

Past CCS Projects in Japan
1990

2000

2010

2020

10k t-CO2

KubikiOil Field
CO2EOR

10k t-CO2

Sarukawa
Oil Field
CO2EOR

Onshore10k t-CO2（1.5years）

Nagaoka
CCS Project

Sarukawa
KubikiTomakomai

NagaokaTokyo

Offshore

300k t-CO2 (3years)

Tomakomai CCS
Site
Select. Demonstration Project
Survey forpotential CCS
sites
R&Ds for CCS
2000-2011: Fundamental research
2011-2016: Fundamental technology developments
2016-: Practical research and developments
3

Past CCS Projects in Japan: Nagaoka CCS PJ
 Onshore CCS was successfully conducted and fundamental technologies such as
evaluation of reservoir properties and CO2 migration, and CO2 monitoring.
 Practical guidance for CCS was compiled and published based on these experiences.
At the completionof injection

2000

2001

Preparation

2002•Site selection•Drilling inj. and obs. wells

2003

2004

2005

2006

2007

2008

2009

After 5.75 yrs.
from the compl.

ーー

2015

CO2 Injection
10.4k t-CO2 injected
BaselinesurveyMonitoring4

Past CCS Projects in Japan: Tomakomai Demonstration PJ
 Demonstrate full-chain CCS system from capture to storage Remove concerns about earthquakes by the data collected;

No influence by natural earthquakes on CO2 stored, No perceptible earth tremors induced by CO2 injection

 Disclose project information & data and enhance understanding of CCS by residents

2012

2013

2014

2015

Preparation•Construction of CCS facilities•Drilling inj. and obs. wells
Baselinesurvey

2016

2017

2018

2019

2020

2021

2022

CO2 Injection
300k t-CO2 injected

Monitoring
5

Footsteps of Research and Developments
2016
Societal
implementation of
CCS

2011

Fundamental
Tech. developments
2000
Fundamental
Research・Subsurface monitoring
・Numerical simulation

Nagaoka CCS PJ・Core sample tests
・Migration modeling (faults,
wells)
・Numerical simulations
・Eval. of the env. impact onoffshore areas
・Fiber-optic monitoring・Geological modelingtechnology

Practical research anddevelopments

・Safety management tech. for large-scale CCS・Effective injection into large-scale reservoirs
・Promotion of Public Acceptance2016 – 2020・Fiber optic monitiering system
・Safety injection system
・Micro-bubble CO2 injection
・CO2 leak detection

2021 –
Demonstrationof fiber opticalmonitoring atlarge-scale sites.

Tomakomai
Demonstration PJ

Post-monitoring: Nagaoka PJ• CO2 migration（seismic,
resistivity, neutron）• CO2 solubility and mineralization（geochemical anlys.）6Current CCS Projects in Japan
 Toward the start of CCS business by 2030, the followings are being carried out;
①Tomakomai demonstration project ②CO2 shipping project ③R&Ds for storageand monitoring technologies ⑤Investigation of Potential CO2 storage sites
2019

Tomakomai
demonstration
project

300kt
injected

2021

2022

2023～

PromotePublicAcceptance

MonitoringA

Study and preparation

What to expect

Demo

Establishtransport
methods

R&Ds for storage and monitoring technologies

Improvesafety andcost efficiency

Potential siteresearch

Geological survey and model building, etc.

Accumulate
information ofpotential sites

International
collaborations

Asia CCUS Network, CEM CCUS Initiative,
IEAGHG, etc. ISO/TC265

R&Ds

A

A

CO2 shipping
project

2020

A

Projects＼FY

Societal
implementation
CCUS

7

Liquefied CO2 Shipping Demonstration Project

A demonstration project for long-haul transportation from emission sources to places suitable for storage will be carried out toestablish liquefied CO2 shipping techniques. Specifically, demonstration transportation, including a 1,000-km long-haultransportation route of from Maizuru to Tomakomai, will start in 2024, with the aim of achieving the world's first results.

Demonstration of transportation by ship
○ Important techniques for the CCS hub & cluster plan, in
which multiple hubs in Japan are assumed, for transporting
CO2 captured at distant emission sources○ Transportation by a 1,000-ton class liquefied CO2/LPG
convertible transport ship

Japan CCS
Tomakomai CCS
Demonstration Center
OmazakiNyudosaki

CaptureMaizuru Power
Station(Coal fired power
plant)

Storage and monitoring

Coal fired power plant○ Capture with solid absorbents(approx. 10,000 tons/year)○ Capture to start in 2023

Kinkazan

CO2 transport ship

○ CCS demonstration underway○ Injection started in 2016 and 300
thousand tons completed in Nov. 2019

Saruyamamisaki
Inubosaki

Capture

IGCC○ Capture based on
physical absorption(approx. 100,000
tons/year)

Carbonrecycling R&D
base

Tomakomai CCS demonstration

Osaki CoolGen

Shionomisaki

Futaoi Jima
SIGMA POWER Ariake

Osaki CoolGen(IGCC)

Kansai Electric
Power
Maizuru
Mikomoto Jima
Power Station

Tomakomai CCS/CR hub○ Facilities for Tomakomai CCS demonstration
are utilized.
○ CO2 captured in distant emission sources isutilized in Tomakomai, an industrial city,
through efforts of carbon recycling.

Ashizurimisaki

Route examples8

R&D Project of CO2 Storage Techniques for Safe Implementation of CCSCCS, in the transition phase from practical implementation to commercialization, has challenges of risk
reduction and economic efficiency improvement toward commercialization.



R&D on CO2 storage techniques will be continued with the aim of achieving the establishment of low-cost andpractical-scale safety control techniques with safety ensured.

⇒ Including fiber-optic measurement techniques, development of a reservoir control system and tool to evaluatesocial acceptability called social license to operate (SLO), and wellbore plugging feasibility study
With the aim of prompt establishment and widespread proliferation of the techniques, every option available
for overseas deployment should be considered, including the use of joint crediting mechanism (JCM).

Fiber-optic measurement technique2020 Functional establishment▼〇 Advantage: Functional establishment in domestic indoor fieldtests(1) Implementation of the multi-sensor function (seefigure below)→ Reduction of monitoring costs(2) Semipermanent use → Suppression of facility
and maintenance costs(3) Full-time continuous position observation→ Improved safety
Observation wellbore〇 Large-scale demonstrative verification and technicalestablishment: Verified in a US site (a few hundred thousand t-CO2 class)・In-well measurement and surface elastic wave
measurement→ Establishment of geologic stability
monitoring techniques→ Establishment of CO2 behavior monitoring
techniques

Injection wellbore

Optical fiber(placed in annulus)

Deformation measurement

DAS/VSP

2023 Technical establishment▼〇 Practical application to CCS・Application to domestic andoverseas CCS sites→ Improvement of safety andeconomic efficiency→ Overseas deployment ofJapan's techniques〇 Ripple effects
・A wide range of application
including building maintenance→ Acquisition of enormous
marketNatural seismologicalobservation
P-wave▼2023- Practical application

S-waveShieldingformation

Reservoir
formation

Demonstration in North Dakota, US
Conceptual drawing of fiber-optic monitoring of a CCS site9

R&D Project of advanced monitoring systems for CCS Large-Scale Demonstrative Verification in Cooperation with Overseas Institutions
 Fiber-optic monitoring and measurement systems are to be demonstrated in the US (EERC)
and Australia (CSIRO and CO2CRC).
North Dakota, US
Demonstration site(in progress)(An MOU has been concluded
between RITE and EERC)

・Geologic stability
monitoring
・CO2 behavior monitoring

SW Hub demonstration site inWestern Australia, Australia
Otway, Victoria, Australia(under planning)(An LOI has been concluded between
RITE and CSIRO, and an MOU
between RITE and CO2CRC)

・Stability evaluation of faults
・Shallow fault leakage monitoring
technique

CO2-EOR (4 million
tons/year)

Aquifer storage(180,000 tons/year, 6 years or more)
Field tests for stability evaluation of faults in deep
formations

10

Lending of Data from Suitable Location Investigation Project andGeophysical Exploration by TANSAWith the need for building a mechanism for promptly lending data analyzed by JCCS for suitable location
investigation to private sectors in preparation for the commercialization of CCS, such data have been transferred
to JOGMEC in order. Some of the data have been available since May 10, 2022. Available data are increasingin the order of readiness.

Previous suitable location investigations utilizing SHIGEN or TANSA were intended for the development of oil andnatural gas. When CCS investigation is added to JOGMEC's functions*, investigations intended for CCS will
*A bill for the relevant things has been introduced
start from 2023 at the earliest, in addition to the current oil and natural gas investigations.

and is being discussed in the current Diet session.

-2021

2022

2023

2024-

Data analysis bysuitable location
Until 2023, JCCS will analyze 3D data previously obtained by SHIGEN and TANSA
investigation project and 2D data from additional investigation.
（JCCS)
Data lending to
private sectors(JOGMEC)
3D geophysicalexploration for CCS
by TANSA(JOGMEC)

Analyzed data are transferred to JOGMEC in order.
Coordination between
JOGMEC and JCCS for
the transfer of previous
data

JOGMEC manages CCS analysis data and will lend them to private sectors.
(under coordination toward the start of data transfer from April 2022 andlending in the order of readiness)
Analyzed data will be lent as appropriate.

Study for JOGMEC's functional enhancement

New investigation for CCS in coordination withconventional oil and natural gas investigations*Oil and natural gas investigations in 2022 have already been confirmed.

11

2. Status of CCS in Japan

12

Status of CCUS toward 2050 Carbon Neutrality
 To achieve carbon neutrality in the entire society, the electricity sector should enhance non-fossil power
supply while the non-electricity sector including industry, consumer, and transportation sectors (fueland heat users) should promote electrification by decarbonized electric power, hydrogenation, anddecarbonization with methanation or synthetic fuel.
 Toward 2050 carbon neutrality, utilization of CCUS is indispensable for decarbonizing thermal power
plants. Also, CCUS and other processes should be fully utilized in sectors where emission of CO2 isunavoidable because decarbonization through electrification or hydrogenation is not feasible.
2018

Mix in 2030

2050

1,060 million tons

930 million tons (-25%*)

Sum of emission andabsorption substantiallyequals 0 ton (-100%)

Decarbonization

Electricity

Non-electricity*Compared with 2013 (1.24 billion tons)

Consumer
110 million tons

Industry
300 million tons
Transportation
200 million tons

Consumer
90 million tons

Industry
330 million tons
Transportation
150 million tons

Electrification
Hydrogen (e.g., hydrogen
reduction ironmaking, FCV)
Methanation, synthetic fuelBiomass

Non-fossil power
supply450 million tons

360 million tons

Renewable energy
NuclearThermal + CCUS/Carbon
recycling
Hydrogen and ammonia

CCUS and carbon recycling
will be fully utilized inregions wheredecarbonization throughelectrification orhydrogenation is not possible.

Afforestation,
DACCS, etc.

*Figures: energy-derived CO2

13

Roughly Estimated Annual Storage Capacity of CCS in 2050


Based on IEA trial calculation, annual storage capacity of Japan's CCS can be roughly estimated at 120 to 240
million tons in 2050. Supposing CCS is introduced in 2030, the number of injection wells needs to increase by
12 to 24 every year during the 20 years until 2050.

To start CCS business by the end of 2030, operators have to start FS, etc. in 2023 and make final investment
decisions by 2026.

10 thousand t-CO2
24,00022,00020,00018,00016,00014,00012,00010,0008,000
6,000 Prompt businessenvironment
4,000
improvement
2,000
0Image of the proliferation of domestic CCS

240 million tons
Expected
annual storage
capacity(rough estimate)

120 million tons
CCS businessstarts in 2030*

The rates of increase are backcasted from the annual storage
capacity in 2050, based on the assumption of linear increase from
2030. In reality, the initial rates of increase are expected to besmaller in the start-up period of CCS business.

20212223242526272829303132333435363738394041424344454647484950 Year(1) 2023 to 2026
(3) 2027 to 2030
FS, etc.
Construction(2) Final investment decision(4) CCS business starts
in 2026
in 2030

To start CCS business by the end of 2030,
operators have to(1) start FS, etc. in 2023 and(2) make final investment decisions by 2026.

Reference: number of injection wells to be required
・120 million tons/year: 240
・240 million tons/year: 480*Storage capacity per injection well: 0.5 million tons/year*Prospecting cost: approx. 5 billion yen/well on land, approx. 8billion yen/well at sea

14

CCS Long-Term Roadmap Intermediate Summary
Basic principles
To implement CCS systematically and rationally to promote sound development of CCS business in Japan withminimal social costs, thereby contributing to the development of Japan's economy and industry, as well as the
securing of stable energy supply.
Substance
The Government is to make a commitment to improve business environment toward the start of CCS businessby 2030 on the assumption that rough estimate of annual CO2 storage capacity in 2050 is in the range from 120
to 240 million tons. The concrete actions in the next clause are to be implemented as required.
In addition, the CCS Business and Domestic Laws Study WG and the CCS Business Costs and Implementation
Scheme Study WG are to be newly organized under the CCS Long-Term Roadmap Study Group for additional
study focusing on those challenges to complete the final summary of the CCS long-term roadmap by the end of
this year.
WG study items (draft) *The study items and members are to be determined later.
 CCS Business and Domestic Laws Study WG: Study of various challenges in preparation for the legislation ofdomestic laws governing CCS business CCS Business Costs and Implementation Scheme Study WG: Study of current costs and future cost targets inthe entire CCS value chain as well as ideal support from the Government
15

CCS Long-Term Roadmap Intermediate Summary*To be discussed in the CCS Business and Domestic Laws Study WG.
Concrete actions(1) Study of the legislation of domestic laws required for implementing CCS business⇒
Agendas toward the legislation of laws governing CCS business should be organized by the end of 2022 (example: foundation of a "CO2
injection and storage right" and limitation of operator responsibility (transfer of responsibility to the Government)). Then, laws governing CCS
business should be legislated promptly toward the start of CCS business by 2030.
*To be discussed in the CCS Business Costs and Implementation Scheme Study WG.
(2) Efforts aimed to reduce CCS costs⇒ R&D and demonstration should be conducted continuously to reduce costs in the entire CCS value chain including capture, transportation,and storage. The Government and the private sector should discuss and define future cost targets and incorporate them into theefforts.
*To be discussed in the CCS Business Costs and Implementation Scheme Study WG.
(3) Study of ideal support from the Government for CCS business⇒ The Government should actively research places suitable for CCS in cooperation with operators and disclose evaluation data inpossession including existing data.
⇒ Ideal support from the Japanese government for advanced CCS business should be studied, referencing to subsidy systems inleading CCS countries such as Europe and the US to provide full support for construction and operation stages in the entire CCS
value chain including capture, transportation, and storage. Note that the initiative of this project will be taken by operators.
⇒ In the future, ideal additional support from the Government should also be studied flexibly based on commercialization stages,
referencing to subsidy systems in the US and other countries. *Introduction of a carbon pricing system, which has already introduced in Europe, is not a
precondition for the discussion toward the commercialization of CCS due to various factors(4) Promotion of public acceptance on CCS businessthat have to be considered.
⇒
Based on the way of thinking that all available technologies should be used without ruling out any possibility, with the aim of achieving theambitious target of carbon neutrality by 2050, the Government, municipalities, and businesses should cooperate together to advocate thenecessity of CCS in preparation for carbon neutrality by 2050 to the public in order to promote public acceptance as well as residents
in CCS implementation areas through the explanation about, for example, the economic ripple effects of CCUS to the municipalities.
(5) Promotion of overseas CCS business⇒In view of carbon neutrality in Asian emerging countries relying on fossil fuels, overseas CCS business should be supported throughknowledge sharing via the Asia CCUS Network, risk money supply to overseas CCS business, and rule making of CCS credits in JCM.
⇒
A mechanism for export of domestically produced CO2 should be incorporated in CCS domestic laws to be legislated.

16

CCS Long-Term Roadmap Intermediate Summary
Business environment improvement toward the start of CCS business by 2030 should be clearly declared as a government target.
To achieve the target, the following actions should be taken:(1) Agendas toward the legislation of CCS domestic laws should be organized by the end of 2022 to legislate such laws as soon as possible.
(2) Future cost targets should be defined for each CCS value chain, and R&D and demonstration should be conducted to reduce costs.
(3) The Government should actively research places suitable for CCS in cooperation with operators (including disclosure of existing data). Ideal support fromthe Government for advanced CCS business should be studied, referencing to support systems including substantial subsidy systems (most of
subsidy rates both for CAPEX and OPEX are 100%) in leading CCS countries such as Europe and the US. Ideal additional support from theGovernment should also be studied flexibly based on commercialization stages, referencing to subsidy systems in the US and other countries.
(4) The Government, municipalities, and businesses should cooperate to promote understanding of the public as well as residents in CCS implementation
areas.
(5) Overseas CCS should be promoted through knowledge sharing via the Asia CCUS Network and risk money supply to overseas CCS business.

Publicoffering

Entitlement ofprospecting rights

Application(1) Legislation(2) CCS cost
reduction

Prospecting and evaluation

Study and definition of
CCS cost targets(5) Overseas CCS
promotion

Injection

Organization of agendas toward the legislation of
CCS domestic laws by the end of 2022
Legislation of domestic laws as soon as possible

Periodic review of cost targets and incorporation into R&D and demonstration projects

Support for advanced CCS business(Investigation and data disclosure ofsuitable places, support for long-lead item
procurement)

Government's investigation of places suitable for CCS in
cooperation with operators(4) Public understanding
promotion

Installation of excavation facilities, excavation of injection wells,
shipbuilding, construction of PLs

R&D and demonstration (e.g., capture, transport, injection and storage, monitoring)

Phase 1

(3) Government
support-2030

Government's commitment to businessenvironment improvement toward the start of
CCS business by 2030

Start of operation

Exploration data interpretation
Procurement of rigs and long-lead items

Legislation

Business
activities-2026
Final investment
decision-2023

Entitlement ofstorage rights

Phase 2Publicoffering ofoperators(Prospecting support)

Phase 3

OPEX support(Development support)

Study of a support system for advanced CCS business (mort of subsidy rates both for CAPEX and OPEX are 100% in foreign countries)

Promotion of understanding of the public as well as residents in CCS implementation areas by a unified team of the Government, municipalities, and businesses (e.g., advocating the necessity of
CCS to the whole nation and promoting understanding in CCS implementation areas)

Knowledge sharing via the Asia CCUS Network and risk money supply to overseas CCS businessIncorporation of mechanisms to transport
domestically produced CO2 overseas tolegislation

17

3. Promotion of overseas CCS
business18

Activities of Asia CCUS Network Forum

Through the Asian CCUS network (ACN) launched in June 2021 as part of the AETI framework, it willcontribute to knowledge sharing, developing human resources, and improving the businessenvironment for CCUS utilization in Asia.



ACN aims at creating common rules and developing CCUS projects, and realizing storage
network throughout Asia.

In FY2021, total of seven events including the first forum, knowledge sharing conferences formember countries, and technical workshops took place. ACN will continue the above activities.

【The second Asia CCUS Network Forum】
30 September 2022 at Tokyo Prince Hotel (hybrid
meeting)• ACN’s vision “Realization of an Asia-wide
CCUS network by 2030 and creation of apilot project by 2025” was announced.

【ACN’s Vision】• The member countries exchanged theirviews to harmonize countries’ policies, legal
systems, and support measures for CCS.
• Japan expressed its intention to enforce
CCS acts as soon as possible.

【Member Countries】

Australia

India

Japan

USA

19