Clifford Chance

Carbon Capture and Storage – How will Japan establish CCS value chains?

23 December 2024

To enable Japan to achieve its ambitious targets for the reduction of greenhouse gas emissions, the government has committed to support advanced carbon capture and storage (CCS) projects. The new CCS Business Act includes a licensing system for CCS businesses, marking a major step toward the practical application of CCS in Japan. This briefing provides an overview of the licensing and other requirements under the CCS Business Act and the current environment surrounding implementation of CCS value chains in Japan.

In October 2020, the government of Japan set a goal of reaching net zero greenhouse gas emissions by 2050. In April 2021, the government further declared that it aimed to reduce greenhouse gas emissions by 46% – as compared with FY2013 – by FY2030. To achieve these targets, the government announced in its "GX Promotion Strategy" that it would support advanced projects serving as role models for developing the business environment necessary for initiating CCS projects by 2030 and, in May 2024, the National Diet of Japan passed the Act on Carbon Dioxide Storage Business (Act No. 38 of 2024, the CCS Business Act) to establish the necessary legal environment for investment in CCS projects in Japan. As of 31 October 2024, the CCS Business Act had only partially been enacted and related ordinances of the Ministry of Economy, Trade and Industry (METI) and the Ministry of Environment (MOE) will need to be passed before the CCS Business Act can be fully enacted.