Carbon capture and storage technologies form a key element of Japan’s strategy for achieving carbon neutrality by 2050.

The lower house of the Diet last month approved a legislative framework for carbon dioxide storage projects that now awaits a vote in the upper house. Tokyo’s initial plans for carbon capture and storage (CCS) include five permanent underground domestic sites, one in Malaysia and another at an undisclosed location in the Pacific.

Exporting carbon dioxide for storage abroad, however, is seen by some as ethically dubious, implying that the exporting nation is shifting responsibility for its emissions to others rather than finding ways to reduce the harmful releases.

This is particularly the case when, as in Japan’s case, the dynamic would be about shifting carbon dioxide from an advanced economy with robust environmental regulations and a stable policy enforcement to emerging economies with less rigorous controls. By contrast in Europe, Norway, known for its stringent standards, has emerged as a leading carbon storage hub, giving balanced assurance to stakeholders and investors.

Ensuring just and economically sound arrangements for importing nations in the Asia-Pacific region thus requires careful consideration of potential long-term issues.

The storage of exported carbon dioxide will involve some transfer of liability from the exporter to the importer. Permanent carbon storage projects are unusual in that they are expected to require governmental guarantees for their long-term integrity; no commercial entity is expected to last in perpetuity. Therefore, the importing country’s government will ultimately hold liability for managing imported carbon dioxide.

Japan’s claim that CCS can be an effective emissions reduction tool will depend on how well carbon storage risks are managed. Within Japan, such risks may be manageable but outside its borders, the credibility of Tokyo’s emissions reduction claim will rest on the word of importing parties.

As such, it is in Japan’s best interest to ensure that it retains responsibility at overseas sites for managing long-term storage risks, including potential leaks. This would imply a high standard of liability for importing countries. Strong handling safeguards at storage sites and sufficient funding support will be critical.

Japan’s CCS bill includes reasonable measures to monitor and prevent carbon leaks. While there is room for improvement, the draft law allocates responsibility for potential leaks and defines the role of the Japanese government.

The need for sufficient funding for monitoring and managing issues that come up during storage cannot be underestimated. “Orphaned” oil and gas wells are a telling reminder of what can go wrong. Leaks from these old wells often get shifted onto taxpayers as problems can occur long after the former operating company has left the scene and perhaps gone out of business.

Carbon storage regulations vary widely around the world. Some countries require project owners to retain liability for up to 10 years after project closure before transferring accountability to the government, while others may require operators to remain responsible for an additional 30 years or more.

Indonesia, like Malaysia, is on Japan’s radar as a potential carbon storage site. Both countries have a long history of oil and gas development and indeed the project included in Tokyo’s initial CCS plan would involve pumping carbon dioxide into depleted oil fields belonging to Malaysian state energy company Petronas.

Yet the onus of responsibility should remain on carbon exporters to guarantee that long-term liabilities are managed in line with their own national standards. Any loophole that results in taxpayers in carbon-importing countries footing the bill for storage problems should be seen as unacceptable.

Carbon importers often suggest that their projects can lower domestic CCS deployment costs, but this assertion is questionable. The main cost barrier with CCS lies with capturing carbon dioxide, not storing it.

Consequently, carbon import projects are unlikely to have much impact on domestic CCS costs. This means the projects are really simply about generating revenue for importers, not advancing climate solutions for their nations.

The acceptability of exporting carbon dioxide for storage is likely to remain contentious, much as with the export of any other waste. This is not to suggest that no such arrangements should be implemented, as carbon storage deals could be a promising revenue source for some importing countries. But disparities in liability and environmental standards must be thoroughly considered and addressed before export/import projects proceed.

With Japan on the verge of moving forward with carbon exports, it is vital that the country and its importing partners realize the need for public acceptance on both ends of the trade.