New Research: Japan Pours $5.2 Billion in Public Funds on Failed Carbon Capture Tech

Japanese press release available here.

Tokyo, Japan. A new report by Oil Change International illustrates how Japan has spent $5.2 billion in public funds on carbon capture technology since 2014 and is pushing this failed model across Southeast Asia while planning to turn the region into a dumping ground for its carbon waste. 

The research, Funding Failure: Japan’s $5.2 Billion Carbon Capture Plan to Derail Asia’s Energy Transition, shows for the first time the full extent of Japanese government subsidies for technologies with a 50-year track record of failure. Despite decades of development, carbon capture projects worldwide only capture around 0.1% of global emissions. The Intergovernmental Panel on Climate Change ranks CCS as one of the least effective and most expensive reduction measures available.

The data, compiled with support from Friends of the Earth Japan, reveals how Japan is using public funds to prolong fossil fuel dependence both domestically and across Southeast Asia, where over 99% of solar and wind potential remains untapped. 

Japan’s CCS subsidies flow directly to fossil fuel expansionists including Mitsubishi Heavy Industries, Japan Petroleum Exploration Corporation (JAPEX), and Inpex–companies that profit from continued fossil fuel extraction and combustion. 

Japan is aggressively promoting its failing CCS model across Asia through the Asia Zero Emission Community (AZEC), created in 2023. Despite claiming to support decarbonization, AZEC is a vehicle for fossil fuel expansion. Out of the 158 Memoranda of Understanding (MoU) signed under AZEC between March 2023 and October 2024, 35% involve fossil fuel technologies, with CCS representing 23 signed agreements.

Unable to store all captured CO2 domestically, Japan plans to export its carbon waste to Southeast Asian nations. Out of nine priority CCS projects selected by the government’s Japan Organization for Metals and Energy Security (JOGMEC), four are designed to ship CO2 captured in Japan to Malaysia and Australia. 

The report includes recommendations for eliminating wasteful CCS subsidies and redirecting public funds toward renewable energy:

• The Japanese government should eliminate subsidies for CCS and hydrogen projects, especially those that export carbon overseas.
• Japan should prioritize spending public finance on renewable projects both domestically and abroad, especially in communities and countries that need it most, and on key enabling infrastructure for a just energy transition.
• AZEC partner countries should consider the region’s potential for renewable energy, and prioritize the development of wind and solar, instead of dangerous distractions like CCS and hydrogen.

Statements:

Makiko Arima, Oil Change International Senior Campaigner said:
“Japan’s spending spree on failed carbon capture technology is a textbook case of how to worsen the climate crisis. Our research shows that the Japanese government is using public money to subsidize fossil fuel corporations while packaging it as climate action. Through AZEC and its export schemes, Japan is exporting its failed energy strategy across Asia, locking in fossil fuel dependence for decades when the region deserves a just transition to renewables.”

Ayumi Fukakusa, Executive Director, Friends of the Earth Japan said:
“The Japanese government is betraying its own people and our neighbors by throwing billions of yen in public money at a technology that has failed for 50 years. Instead of leading Asia toward a renewable energy future, Japan is desperately trying to keep fossil fuels alive by subsidizing private corporations. We call on Japan to end these wasteful and harmful subsidies and invest in solutions that will protect communities here and across the region.”

James Bowen, Climate and Energy Policy Analyst, Climate Analytics said: 

“Japan’s CCS support targets sustained fossil fuel use, both at home and in Southeast Asia and Australia. A recent Climate Analytics report showed that this approach risks additional emissions that would fatally undermine the Paris Agreement. Japan’s CCS support benefits oil and gas producers in partnering countries but will prove a costly diversion at an economy-wide level. Southeast Asia and Australia can tap abundant and affordable renewable resources to quickly and cost-effectively decarbonise and maintain long-term economic competitiveness.”

Menakshi Raaman, President of Sahabat Alam Malaysia said:

“Japan is trying to solve its carbon problem by making it ours. Our region has contributed least to the climate crisis, yet Japan wants to turn us into dumping grounds for its carbon waste. This is environmental injustice, plain and simple. Malaysia needs investment in our own renewable energy, not risky experiments that threaten our ecosystems and livelihoods at the expense of Japanese corporations.”

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About Oil Change International

Oil Change International is a research, communication, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the coming transition towards clean energy.

Learn more about how Japan’s AZEC is prioritizing fossil fuel technologies at https://fossilfreejapan.org/