Japan is preparing to transport captured carbon emissions to Malaysia under what would be Southeast Asia’s first cross-border carbon capture and storage initiative, a proposal that has drawn criticism from environmental advocates who question the technology’s effectiveness in tackling climate change.
Malaysia is positioning itself as a regional hub for carbon capture, a three-stage process involving the capture, transport and underground storage of carbon dioxide emissions.
The move comes as about 81% of Malaysia’s electricity is generated from fossil fuels, prompting activists to argue that CCS diverts attention and funding from proven climate solutions such as renewable energy expansion.
Japan, one of the world’s largest carbon emitters, intends to ship emissions from high-polluting sectors including power generation, oil refining, cement, shipping and steel production to Malaysia in the coming years.
Analysts say that if successful, the project could pave the way for similar arrangements in countries such as Indonesia and Thailand, both of which have potential carbon storage capacity.
Opponents argue the initiative risks undermining already struggling global efforts to reduce greenhouse gas emissions.
The plan “dangerously shifts the burden of climate change onto Malaysia rather than onto Japan,” said Rachel Kennerley, a carbon capture specialist with the Washington-based Center for International Environmental Law.
Carbon capture technology begins by trapping emissions at their source, such as power plants or refineries.
This can involve retrofitting facilities to channel emissions directly into storage systems or constructing large vacuum-like structures to remove carbon dioxide from the air.
Although detailed operational plans have not been released, the captured carbon dioxide would likely need to be separated from other industrial gases before being liquefied. It would then be transported by specialized vessels to storage sites, possibly in depleted gas fields off the coast of Sarawak on the island of Borneo.
Once injected underground, the storage sites would require long-term monitoring to detect potential leaks.
Supporters, including major fossil fuel companies such as Exxon Mobil and Shell, argue that CCS provides a transitional climate solution while economies shift toward cleaner energy systems.
In Europe, the first offshore carbon storage facility backed by the European Union is expected to begin operations by mid-2026, capturing emissions from Denmark and injecting them beneath the North Sea.
A Norwegian project launched last year is also testing cross-border carbon shipments.
Grant Hauber of the Institute for Energy Economics and Financial Analysis described the surge of interest in CCS as “an almost fantastical theoretical uptick,” adding that it “offers a tantalizing promise that just won’t deliver.”
While the International Energy Agency considers carbon capture, utilization and storage part of the climate mitigation toolkit, its latest Net Zero Emissions scenario projects the technology will account for less than 5% of total emission reductions by 2050.
Malaysia passed legislation last year to promote the CCS industry. The Ministry of Economy, which declined to comment on the Japan project, has projected the sector could contribute as much as $250 billion to the national economy over the next three decades.
State-owned energy company Petronas is leading construction of a $1.1 billion offshore carbon storage facility that it says will be the world’s largest, with operations targeted before the end of the decade.
The company declined to comment.
Environmental campaigner Eqram Mustaqeem criticized the investment priorities, saying “we’re spending high amounts of money on a technology that is under-delivering and unproven.”
Fossil fuels remain Japan’s primary energy source, and the country ranks among the world’s top five carbon emitters. Tokyo is investing in nine carbon storage sites, including three in Malaysia, as part of efforts to lower net emissions. Officials estimate the facilities could store 20 million tons of carbon annually by 2030, roughly 2% of Japan’s yearly emissions.
Malaysia is expected to receive payment per ton of carbon stored, enabling Japan to deduct the captured emissions from its national totals.
Japanese government bodies overseeing the initiative — the Ministry of Economy, Trade and Industry and the Japan Organization for Metals and Energy Security (JOGMEC) — did not respond to requests for comment.
Official documents indicate that several Japanese companies plan to ship emissions to Malaysia under the scheme.
Ayumi Fukakusa of Friends of the Earth Japan described the export of emissions as “carbon colonialism.”
Critics argue that the strategy prioritizes managing pollution over cutting it at source.
“Japan gets to keep polluting and driving climate change, while claiming to ‘clean up’ its emissions by shipping the carbon to Malaysia,” said Kennerley of the Center for International Environmental Law. She said that will make Malaysia “a carbon dumping ground for industrial pollution” and detract from climate action.
