Can you really just sweep your CO2 emissions underground? Japan is about to find out.

Japan, where the landmark Kyoto Protocol was signed three decades ago, remains one of the world’s biggest carbon dioxide polluters, behind only China, the US, India, Russia, and the EU. The country is caught between an urgent need to reduce greenhouse gas emissions and an industrialized economy that demands enormous amounts of power.

Coal and gas remain the dominant sources of energy in Japan. While efforts to convert to alternative energy sources like wind are still nascent, the national government is pursuing a short-term plan to lighten its carbon load: building a fleet of ships to sail across the seas off Southeast Asia safely loaded with liquefied carbon, to be stored away underground or beneath the ocean in another country.

Last year, Mitsubishi Heavy Industries launched the world’s first dedicated CO2 carrier. The sleek vessel can transport up to 1,450 cubic meters of CO2 in one voyage and is expected to see its first test voyage later this year. It is the flagship of Japan’s ambitious initiative to build an international network for the marine transportation of carbon that is central to its own decarbonization plans as well as those of Singapore, South Korea, Indonesia, and Malaysia.

Because Japan lacks sufficient space underground or under the sea bed within its borders to keep its own captured CO2, the government is aggressively courting carbon trade partners. Businesses and governments across Southeast Asia are lining up behind the initiative, framing it as an economic and environmental necessity.

Proponents believe the carbon transport vessel’s debut heralds a future in which CO2, captured via carbon capture and sequestration (CCS) technology, is shipped around the world much as natural gas and petroleum are today. Using CCS tech, companies separate CO2 from other gasses emitted at an industrial site (an oil or gas well, factory, or power plant) and capture it, then transport and store it somewhere else, usually an underground aquifer or already-exploited oil or gas field. The idea is that stowing carbon underground will keep it out of the atmosphere, preventing it from warming the climate.

“CCS ... is an indispensable technology for decarbonization,” said Kenta Asahina, a spokesperson at Japan’s Ministry of Economy, Trade, and Industry’s Agency for Natural Resources and Energy.

But other experts question whether transporting CO2 by sea will have significant climate benefits. A string of high-profile carbon storage failures in the US, Australia, and Canada has produced skeptics, in Japan and elsewhere, who don’t believe the program should play a significant role in any nation’s strategy to reduce emissions. Its payoff is too uncertain and too incremental, they argue, when the planet is already on the verge of exceeding the 1.5 degree Celsius increase in temperature that the 2015 Paris climate agreement sought to avoid.

These critics view the launch of the Mitsubishi ship as an empty achievement.

“It may represent a technological feat, but as for a meaningful contribution to addressing the global climate crisis and the 1.5-degree goal, I’m skeptical about that,” said Yuri Okubo, an analyst with the Renewable Energy Institute, a Tokyo-based nonprofit think tank.

Instead, they consider the carbon-carrying ship and the broader initiative it represents a misguided effort that will serve to entrench oil, gas, and coal industries into which Japan has invested billions of dollars in recent decades — at the expense of the alternative energy sectors that could deliver a carbon-free future.

Carbon capture and storage has been proposed since the 1970s to make fossil fuels more sustainable. It’s been promoted as a climate solution for industries that can’t be electrified in the short term because they depend on high-density fuel, such as auto manufacturing or steel production, and it plays a central role in global climate mitigation plans.

Japan has been betting on carbon storage for years. The government’s Action Plan for Achieving a Low-carbon Society, released by then-Prime Minister Yasuo Fukuda in 2008, estimated that commercially viable CCS would be ready by 2020. Now, that date has been pushed beyond 2030. The cost of storage remains stubbornly high, between 12,000 JPY and 20,000 JPY ($80 to $150) per ton, much higher than what the government had expected in 2008.

Starting in 2016, the Japanese government supported a three-year CCS pilot project in Tomakomai, on the island of Hokkaido in the north of the country. There, 300,000 tons of CO2 were captured and stored offshore in a reservoir below the water’s surface; the government is now monitoring the site for any sign of leakage in another test of CCS’s viability. Five new CCS projects are being planned around Japan, which aim to start storing CO2 by 2030.

However, because of its limited natural underground storage space, Japan produces much more CO2 than it could ever store. So it has developed plans to export its carbon to places like the Kasawari gas field in Malaysia, the site of the largest planned offshore carbon storage project in the world, and the Arun gas field in Indonesia. Carbon storage proponents envision those locations eventually receiving CO2 shipments from different countries, becoming the repositories for the region’s carbon output.

“The development of large, shared CO2 storage resources that can be accessed by multiple facilities and countries could support [CCS] investment in locations where storage capacity is either limited or where its development faces delays,” said Carl Greenfield, an energy analyst at the International Energy Agency.

To export its carbon, Japan needs ships capable of carrying captured CO2 safely and reliably. In 2021, the Japanese government funded a project to build the world’s first dedicated liquid CO2 carrier.

The ship, built at the Enoura Plant at MHI’s Shimonoseki Shipyard & Machinery Works, was a collaboration between several Japanese companies, including Mitsui OSK, Kawasaki Kisen Kaisha, the Japanese government, and Ochanomizu University.

“We believe that the construction of the world’s first demonstration test ship for LCO2 transportation for CCS is a significant technological achievement,” a Mitsubishi Heavy Industries spokesperson said by email, “as it contributes to the future long-distance and high-volume CO2 transportation.”

Building a liquid carbon dioxide carrier fleet is just the first step in a viable carbon capture and storage plan. If Japan and other countries like South Korea and Singapore want to export their CO2, they need countries willing and able to receive it.

The groundwork for that framework is being laid. At a Japanese government-organized CCS conference last September, Japan and Malaysia signed a landmark agreement on CO2 exports, with the goal of shipping carbon to be stored in offshore Malaysian gas fields as soon as 2028. Those overseas transports, if they happen, will represent Japan’s first carbon exports and the first opportunity to put its strategy to the test.

Indonesia, which recently released a policy on CO2 storage that allows up to 30 percent of its stored carbon to be imported from abroad, also seeks to become a regional hub by receiving carbon imports from Japan and other neighbors like South Korea and Singapore.

Groups like the ASEAN Centre for Energy, a regional trade organization working in 10 nations in Southeast Asia, are also promoting the expansion of carbon storage in the region by organizing conferences and workshops with energy policymakers and large oil and gas companies.

“The development of a regional carbon market through hubs could make CCS projects economically and technically feasible in the region due to economies of scale in transporting and storing large-scale carbon,” said Aldilla Noor Rakhiemah, the center’s senior research analyst.

Asia still depends on fossil fuels for 86 percent of its primary energy needs, a bit higher than the global average. Unlike the US and Europe, though, Asia’s emissions are still growing, and they account for more than 50 percent of carbon emissions worldwide. Han Phoumin, a senior economist at the Japan-supported, Indonesia-based think tank ERIA, argues carbon transportation can facilitate the decarbonization of some of the continent’s biggest economies.

Japan’s own investments in the region’s coal and gas sectors have contributed to the increasing pollution that it now hopes to reduce through carbon capture and storage. For years, alongside China and South Korea, the country was a leading financier of coal projects in Southeast Asia: Japanese companies including JERA, Sumitomo, and Mitsubishi have developed oil and gas exploration alongside the Malaysian company Petronas and Indonesia’s Pertamina.

Some analysts perceive the carbon storage push as the country’s attempt to protect those investments.

Japan spent billions of dollars to build a lot of new gas, coal, and fossil fuel capacity all over Asia. “Investors are worried” about the fate of those projects as the world decarbonizes, said Lorne Stockman, research director at the nonprofit Oil Change International. “The solution for [polluters], for their interests and their shareholders, is, ‘Let’s put more capital — with the help of taxpayer money and subsidies — into CCS so that we can keep these plants going and we can get our return and our profit that we expected to get from this big capital investment.’”

It follows a long history of richer, developed countries like Japan exporting unwanted waste to be stored in poorer countries: chemical waste, discarded electronics, or, in recent years, plastic. In Malaysia and Indonesia, the same countries where Japan plans to export its CO2, Japanese plastic waste exports have been found dumped in waterways and burned at illegal factories.

Meenakshi Raman, president of the Malaysian environmental nonprofit Sahabat Alam Malaysia, fears history could repeat itself with carbon storage.

“It is unethical and immoral for Japan to export its problems to Malaysia. Just as in the case of plastics dumping, this activity of Japan smacks of CO2 dumping to Malaysia,” said Raman. “Malaysia should not be agreeing to take on the risks and become a dumping ground for Japan.”

It’s often the poorest communities that suffer the most from waste exports. In 2020, when a CO2 pipeline ruptured in Mississippi, 45 people were hospitalized with carbon dioxide poisoning and more than 200 were forced to evacuate the low-income, predominantly Black neighborhoods of Yazoo County.

“It was startling,” said Stockman. “Whether it’s the pipelines or the actual projects themselves, an accident with CO2 is extremely concerning for communities.”

Even as Japan pushes carbon storage across Southeast Asia, experts are doubtful that such a trade network would lead to a meaningful reduction in global emissions. The problem is scale.

Over its three-year run, Japan’s showcase Tomakomai CCS demonstration project captured 300,000 tons of carbon; a single medium-sized, 1,000-megawatt coal plant emits 6.9 million tons of CO2 in a single year. In Japan alone, coal was responsible for 427 million tons of CO2 emissions in 2022. It would require more than 4,000 Tomakomai plants to capture all of that carbon — and that doesn’t even factor in Japan’s emissions from natural gas, cement, and other industries.

“The amount of CO2 emissions from Japan’s power and industrial sector are massive, and CCS technology isn’t developed enough to capture and store a meaningful amount of these emissions,” said Evan Gach, the program coordinator with Kiko Network, a Japanese climate nonprofit. “We haven’t seen any cost estimates for building CO2 export infrastructure.”

Even in the best-case scenario, Gach and others believe that building up the infrastructure would be enormously expensive, with $200 billion already earmarked for CCS globally. It requires constructing more liquid carbon-carrying ships, retrofitting factories and power plants with carbon capture tech, and building CO2 ports in Southeast Asia.

Japan already has high energy prices compared to its peers. Such an investment would drive customer rates up further.

“We are already paying so much for the import cost of fossil fuels, and it really does not make sense to pay additional cost to export CO2 to other countries,” Okubo said.

Proponents admit they are still figuring out where the money to build carbon capture and storage plants and liquid carbon-carrying ships will come from. Financing is “one of the most critical issues for [CCS] development,” Han said. He put the impetus on governments to help “de-risk” investments and develop “public-private partnerships.”

The ASEAN Centre for Energy’s Aldilla agreed, saying that “innovative financing mechanisms like carbon credits or green bonds are essential,” and called for more “economic incentives.” The Japanese government is looking at making CCS eligible for government subsidies through one of its top climate financing programs.

There’s another way to make CO2 exports more financially attractive: increase the price of carbon. Higher prices would give other countries the financial incentive to import carbon waste to be stored in their territory, with all the risk it brings. But experts say carbon prices in Asia are currently too low to jump-start the carbon trade, with only Singapore having a planned price high enough to make CO2 exportation viable.

“There will be a role for CCS, but its deployment is ultimately a question of carbon price, whether enforced by governments or voluntarily accepted by industries and consumers,” said Putra. “Right now the pursuit of CCS seems to leave out this question.”

However, a higher price of carbon could simultaneously speed the shift from fossil fuels to renewable energy, which would limit the long-term value of building a carbon storage infrastructure.

For Putra, another concern is that CCS allows a country like Indonesia, a major natural gas and coal producer, to continue to expand its use of fossil fuels domestically. Many of the Japanese companies pushing CCS, like Mitsubishi Heavy Industries, are also involved in oil and gas production in Indonesia and across Southeast Asia.

“The risk of multiple actors riding on the CCS wave is to embellish their plans with ‘climate solutions,’ buy time, and delay any real changes,” Putra said. “CCS is a convenient tool to delay hard questions for businesses ... [that] can claim that their project will later deploy CCS while bearing little consequence when such actions are canceled or postponed.”

Governments have been investing in carbon storage since the 1990s, when the first global climate agreement, the Kyoto Protocol, was being finalized. But despite $20 billion in government support in recent decades, an analysis from the Institute for Energy Economics and Financial Analysis found that out of 13 flagship carbon storage projects, 10 had failed or underperformed.

Even the few operating plants that are running, such as the Century Plant in Texas, are capturing CO2 far below the figures they promised. Some believe the entire premise behind CCS is flawed, that the cost of separating, capturing, and storing CO2 requires so much energy that it can never be efficient or cost-competitive.

“The track record is not just bad, it’s horrendous, years of failure and underperformance, with very few exceptions,” Stockman said. “There’s no reason to trust that it’ll get better.”

Renewable energy is already catching up with oil and gas in terms of cost. Southeast Asia has huge, mostly untapped wind and solar potential. Coupled with better transmission lines and energy storage, a thriving wind energy sector off the shores of Japan could replace much of the need for carbon storage. The government has a plan to build 45 gigawatts of offshore wind by 2040, but proponents believe that capacity could be scaled up significantly, to beyond 100 gigawatts, with stronger policy and more financial incentives.

Japan recently signed a global agreement pledging to triple its renewable energy capacity. Some climate experts would rather see the country make investments to keep its commitment to transition to those alternatives.

“I don’t see any benefits in investing in CCS at the moment,” Okubo said. “If we want to triple Japan’s renewable energy, we have to really put in a lot of effort, money, and time.”

Meanwhile, the first liquid carbon-carrying vessel has yet to be followed by a second. Mitsubishi Heavy Industries declined to answer questions on any plans to expand the fleet, or on the broader financing and logistical challenges facing CCS in Asia.

Japan appears determined to stay the course on carbon storage. But there is a growing risk that the entire initiative will end up an empty pursuit inconsequential in slowing climate change, or, worse, a distraction that slows the transition to green energy.