Japan Moves Toward Full Enforcement of CCS Business Act with New Ministerial Ordinance Draft

Japan is continuing preparations for the full implementation of its carbon capture and storage (CCS) regulatory framework, with the release of a draft amended and restated ministerial ordinance intended to support the enforcement of the country’s CCS Business Act.

The Act on CCS Business of Japan (Act No. 38 of 2024) was enacted in May 2024, although most operational provisions have not yet entered into force. The remaining provisions are currently scheduled to become effective on 22 May 2026.

The newly released Draft of Amended and Restated Ministerial Ordinance for CCS Business, published on 8 April 2026, provides further clarification on a number of practical and operational requirements under the CCS Business Act, particularly in relation to monitoring obligations, decommissioning requirements, financial security obligations, and third-party access arrangements.

Monitoring Obligations for CO2 Storage Sites

Under the CCS Business Act, storage operators are required to monitor the status of stored CO2 in accordance with standards prescribed by the Ministry of Economy, Trade and Industry (METI).

The draft ordinance categorises monitoring obligations into three types:

• monitoring in danger;
• monitoring in extraordinary circumstances; and
• monitoring in normal circumstances.

The ordinance also specifies the matters that must be monitored, including:

• reservoir temperature and pressure;
• CO2 composition, concentration, flow rate, and injection volume;
• well integrity;
• seismic and geological activity;
• the location and spread of stored CO2; and
• environmental conditions above and around the storage area.

These provisions are intended to support the long-term safe and stable storage of CO2 within approved storage reservoirs.

Financial Security Requirements Following CO2 Injection

The draft ordinance also addresses the requirement for CCS operators to secure sufficient funds to cover post-injection monitoring and related obligations.

Under Article 44 of the CCS Business Act, operators must implement measures prescribed by METI to ensure that funds remain available for monitoring activities between the completion of CO2 injection and formal approval to discontinue storage operations.

According to the draft ordinance, this financial security may take the form of reserve accumulation or other funding arrangements approved by METI. The amount required will generally be calculated annually based on the estimated costs of monitoring activities during the operational phase of the project.

Decommissioning Obligations for CCS Facilities

The proposed ordinance also clarifies the decommissioning measures that operators must undertake before discontinuing CCS operations.

These measures include:

• decommissioning wellheads;
• removing or disposing of storage-related structures and facilities;
• assessing well integrity; and
• implementing measures to prevent CO2 leakage.

The decommissioning framework reflects Japan’s focus on ensuring long-term environmental and operational safety following the end of CO2 injection activities.

Minimum 10-Year Waiting Period Before Business Discontinuation

The CCS Business Act also requires operators to wait for a prescribed period after decommissioning before receiving approval from METI to formally discontinue storage operations.

The draft ordinance proposes a minimum waiting period of 10 years, intended to ensure that stored CO2 remains stable following injection and decommissioning activities.

However, the waiting period may be shortened where METI determines that the amount of injected CO2 is sufficiently limited and long-term storage stability can reasonably be assured.

Following formal discontinuation, responsibility for management of the storage site may be transferred to JOGMEC in accordance with the CCS Business Act.

Third-Party Access Framework

The draft ordinance further develops Japan’s framework for third-party access (TPA) to CCS infrastructure.

Specified storage operators providing CCS services for third parties will be required to establish standard terms and conditions governing access to storage facilities and related services. Those terms must be submitted to METI and include matters such as:

• calculation of charges;
• allocation of infrastructure costs;
• CO2 acceptance conditions;
• measurement methodologies;
• safety responsibilities;
• operational restrictions and suspension procedures; and
• contract application, renewal, and termination procedures.

The framework is designed to provide greater transparency and consistency for companies seeking access to CCS infrastructure in Japan.

Conclusion

Japan’s draft ministerial ordinance marks another significant step toward the full implementation of the CCS Business Act and the establishment of a comprehensive regulatory framework for carbon capture and storage activities.

The proposed rules provide greater clarity regarding operational monitoring, financial security obligations, decommissioning requirements, post-closure responsibilities, and third-party access arrangements. As Japan continues developing its CCS regime, further regulatory guidance and implementation measures are expected ahead of the Act’s full enforcement in May 2026.

By Anderson Mori Tomotsune, Japan, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact japan@transatlanticlaw.com

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