Japan and Malaysia Formalize CCS Cooperation to Advance Decarbonization

Historic Agreement Signed in Kuala Lumpur

In a significant step towards regional decarbonization, Japan and Malaysia officially signed a memorandum on Friday, October 17, 2025, to foster joint cooperation in carbon capture and storage (CCS) technology. The signing ceremony took place in Kuala Lumpur, marking a pivotal moment in both nations' efforts to combat climate change and achieve carbon neutrality. The agreement was formalized by Japan's Economy, Trade and Industry Minister Yoji Muto and Malaysia's Science, Technology and Innovation Minister Chang Lih Kang.

The memorandum outlines a commitment to jointly promote CCS technology, accelerate decarbonization initiatives, and enhance the sharing of crucial information and expertise between the two countries.

Strategic Importance for Decarbonization Goals

This collaboration is strategically vital for Japan, which aims for the commercialization of CCS systems by around 2030. The Japanese government has set ambitious targets, including achieving carbon neutrality by 2050 and a 46% reduction in greenhouse gas emissions by fiscal year 2030 compared to 2013 levels.

Malaysia, with its abundant natural resources, possesses significant potential for CO2 storage, particularly in its depleted oil and gas fields. These geological formations offer viable sites for safely sequestering captured carbon dioxide. Transporting CO2 from Japan to these Malaysian storage sites is expected to offer a more time and cost-efficient solution compared to developing extensive domestic storage infrastructure in Japan.

Collaborative Initiatives and Future Outlook

The memorandum is expected to boost momentum for practical cooperation. Malaysian state oil company Petronas is slated to play a key role, conducting research for potential storage sites alongside prominent Japanese firms such as ENEOS Corp., Cosmo Oil Co., and JFE Steel Corp.

Malaysia views CCS as a potential new revenue stream, aligning with its National Energy Transition Roadmap (NETR), which includes CCUS as one of its six energy transition levers. Japan's Economy, Trade and Industry Ministry launched the Advanced CCS Projects initiative in fiscal 2023, selecting nine projects, three of which anticipate storage in Malaysia. These projects collectively aim to store approximately 50% of Japan's target of about 20 million tons of CO2 annually. This partnership underscores a shared vision for a sustainable future, leveraging technological innovation and cross-border collaboration to address global climate challenges.