Japan spent around ¥100,000 ($686) per ton of CO2 to capture and store carbon emissions in this technology’s first trial a few years ago – five times more than the price of CO2 traded on any global carbon credits exchange. Luckily, the Carbon Capture and Storage (CCS) tech demonstration off the coast of Tomakomai port, Hokkaido, was almost entirely state-funded.
As the nation looks this year to promote CCS as a realistic clean energy solution and a technology that’s vital to the decarbonization of heavy industry, such cost performance will need to improve. At the same time, companies will also need to create viable business models for a storage system that inherently stops generating income once it’s full.
For now, the burgeoning sector is creating a buzz in Japan and attracting a wide array of businesses, from utilities like J-Power to cement-makers and pulp & paper companies. This is in part driven by growing state commitments in terms of funding and other support measures.
Announcing plans for future CCS projects is one thing, finding the financing and developing cost-efficient technologies is another. With many details in this industry as yet unclear, Japan NRG has reviewed some of the calculations that will be involved in CCS development.