By Sia Choi, AU-USEA Fellow

To reduce their carbon emissions, states in the Asia-Pacific region are exploring opportunities to incorporate CCUS technologies into their infrastructure. This area plays a vital role in the global shift to low-carbon energy, given its dependence on fossil fuels for industry and urban development during rapid economic growth. As nations strive to achieve climate goals while maintaining energy security, CCUS offers a practical means to reduce emissions without compromising financial stability or industrial productivity. 

Japan and Malaysia demonstrate how countries adapt CCUS strategies to their unique capacities and priorities. Japan leads through sustained policy support, technological innovation, and industrial integration. Meanwhile, Malaysia leverages its geological potential and strategic location for carbon management and cross-border storage. Emerging partnerships between the two countries—such as Japan’s Mitsui collaborating with Malaysia’s Petronas on regional CCUS hub development—show initial steps toward coordinated carbon management across the region. 

Japan: Legal Frameworks and Industrial Integration 

Japan has become a leader in promoting CCUS as part of reaching carbon neutrality by 2050. The government’s Green Growth Strategy, introduced in 2020, highlights CCUS as a key method for decarbonizing heavy industries while maintaining industrial competitiveness. The Japan Organization for Metals and Energy Security (JOGMEC) has played a crucial role by providing financial assistance and geological and geophysical surveys.  

Japan’s investment in CCUS started in the early 2000s with the Nagaoka pilot project in Niigata, which laid the foundation for later large-scale initiatives. Its first major offshore project, the Tomakomai project in Hokkaido (2016-2019), successfully captured and stored about 300,000 tons of CO2 and injected it into the seabed. It proved the reliability and safety of Japanese technologies and served as a model for public acceptance and scaling up across the country. 

Japan is currently developing nine advanced CCS projects nationwide. To facilitate scaling and attract private investment, the government has put a legal framework in place. The CCS Business Act, enacted in August 2024, established licensing regimes, property rights, safety and environmental protections, and regulations for carbon transportation. This serves as a foundation for integrating CCUS into Japan’s broader industrial decarbonization and energy transition efforts. 

Malaysia: Geological Potential and Regional Ambitions 

Malaysia is quickly expanding its CCUS capabilities with strong government support to achieve its net-zero goals. Malaysia’s National Energy Transition Roadmap (2023) highlights CCUS as one of the six key components of this strategy. Furthermore, policies, such as the 12th Malaysia Plan and National Energy Policy, guide investments, establish regulatory clarity, and coordinate public-private efforts in developing CCUS hubs and low-carbon infrastructure.  

The CCUS Act of 2025 establishes a comprehensive legal framework for the capture, transportation, utilization, and long-term storage of carbon dioxide, with MyCCUS overseeing licensing, regulation, and compliance. Key projects include the Kasawari CCS Project, which is one of the world’s largest offshore carbon capture initiatives. It aims to capture up to 3.3 million tons of CO2 annually from natural gas production, with plans for injection by 2029-2030.  

Malaysia also positions itself as a regional hub, promoting international collaborations and offering storage solutions to neighboring countries like Japan, Singapore, and South Korea. Petronas Carbon Captured Storage Solution (PCCSS) plans to launch offshore hubs, with a combined storage capacity of up to 15 million tons per year by 2030. In June 2023, Petronas signed a development agreement with Japan’s Mitsui & Co. and France’s TotalEnergies to explore carbon storage opportunities in Southeast Asia. This move indicates growing international confidence in Malaysia’s CCUS potential, with the Mitsui partnership highlighting closer cooperation between Japan and Malaysia. 

Toward a Regional Low-Carbon Future 

Japan and Malaysia’s CCUS strategies reflect their unique national circumstances. Japan has advanced its technology through long-term policies, industry partnerships, and demonstration projects, while Malaysia utilizes its geological resources and strategic location to become a regional carbon hub. These methods are different but complementary: Japan provides expertise and advanced technology, while Malaysia offers essential capacity and infrastructure. Through emerging partnerships like the Mitsui-Petronas collaboration, both nations are establishing the foundation for potential regional CCUS alignment. Together, their combined efforts show how CCUS could gradually develop into a coordinated regional system, boosting economic resilience and supporting the Asia-Pacific’s transition toward carbon neutrality.  

However, regional cooperation faces several obstacles, including fragmented legal systems, financial uncertainties, and unclear regulations for cross-border CO2 transport and storage. Overcoming these challenges will require regulatory harmonization, shared financing mechanisms, and clearly defined liability frameworks to ensure accountability and build trust among partners. Public-private partnerships and targeted government incentives can accelerate technology transfer and the development of shared infrastructure, paving the way for a more integrated CCUS network across the Asia-Pacific.