Japan's New Laws Regarding CCS, Hydrogen, and Ammonia

The year 2024 has marked the advent of the CCS industry and the hydrogen and ammonia industry in Japan. On 17 May 2024, the Japanese Diet (parliament) passed two legislations, namely, the Carbon Dioxide Storage Business Act ("CCS Act") and the Act on Promoting the Supply and Utilization of Low-Carbon Hydrogen, Etc, for a Smooth Transition to a Decarbonized Growth Economic Structure ("Hydrogen Society Promotion Act"). These legislations were promulgated on 24 May 2024. The CCS Act is principally a domestic law governing the conduct of CCS activities within the territory of Japan, covering exploration and prospecting of reservoirs, storing CO2 in reservoirs, and pipeline transport of CO2 for storing CO2 in reservoirs (including reservoirs in foreign countries). The Hydrogen Society Promotion Act establishes a plan certification system for low-carbon hydrogen/ammonia supply and use projects, provides support measures and special regulatory measures for hydrogen/ammonia supply or use businesses that have received plan certification, and takes other measures to expand the supply and demand of low-carbon hydrogen/ammonia. These legislations are expected to promote the nascent CCS and hydrogen/ammonia industries in Japan. In this paper, we will focus on the aspects of the regulatory regime under the CCS Act that are relevant to a cross-boarder CCS project in which CO2 captured in Japan is exported to and geologically stored in a reservoir abroad, and the aspects of the Hydrogen Society Promotion Act that are relevant to the procurement of low-carbon hydrogen and ammonia from abroad by Japanese users.