Joint Study on Large-Scale CCS for Steel and Thermal Power Generation Sectors in the Kansai Area

Osaka Gas Co., Ltd. (hereinafter "Osaka Gas") and Kobe Steel, Ltd. (hereinafter "Kobe Steel") have jointly conducted a Pre-Feasibility Study (hereinafter "this study") on a large-scale CCS (Carbon Capture and Storage) value chain. This study targets carbon dioxide (CO2) emitted from the steel and thermal power generation sectors in the Kansai area, envisioning processes from CO2 capture to overseas geological storage. Through this, the basic configuration (overall picture) of the CCS value chain originating from the Kansai area and major challenges for future consideration have been outlined. [Reference] Image of the future CCS value chain originating from the Kansai area In Japan's industrial and power sectors, various low- and de-carbonization measures are underway, such as expanding the introduction of renewable energy and fuel conversion to natural gas. On the other hand, in "Hard-to-Abate" sectors where emission reduction is difficult, such as steelmaking, and in the thermal power generation sector, a combination of multiple reduction methods is required. CCS is being studied domestically and internationally as one of the technologies that can contribute to mid- to long-term emission reductions in these sectors. Since May 2023, Osaka Gas has been conducting a joint study with Shell Singapore Pte. Ltd (hereinafter "Shell") to construct a CCS value chain aiming to capture CO2 from emission sources like domestic factories and store it in overseas geological formations (*1). Osaka Gas is also studying CCU (Carbon Capture and Utilization) and CCS utilizing CO2 from the exhaust gas of the Senboku Natural Gas Power Plant (Osaka Prefecture). Osaka Gas and Kobe Steel, together with Shell, started this study in June 2025 targeting Kobe Steel's Kakogawa Works (Hyogo Prefecture). Until March 2026, they conducted an initial business feasibility assessment for a CCS value chain assuming CO2 capture from the steelworks' emission sources, liquefaction, storage, and shipment of the captured CO2, as well as overseas maritime transportation (including consideration of joint transportation with CO2 emitted from the Senboku Natural Gas Power Plant), and permanent overseas geological storage. Kakogawa Works of Kobe Steel, Ltd. (Provided by: Kobe Steel, Ltd.) In this study, the following points were mainly examined: - Technical viability regarding CO2 capture at the Kakogawa Works, and the liquefaction, storage, shipment, transportation, and storage of the captured CO2. - Organizing issues related to approximate costs and institutional aspects in each process. - Evaluation of constructing a CCS value chain assuming overseas geological storage based on the above. Through these studies, a basic configuration (overall picture) for the CCS value chain originating from the Kansai area was drawn under assumed conditions, and major challenges for future consideration, such as costs, policy support, regulations and institutions, and stakeholder collaboration, were identified. Osaka Gas and Kobe Steel will continue to study the potential of CCS with a mid- to long-term perspective and continue their efforts to contribute to decarbonization. ■ Comments from Each Company Under the "Energy Transition 2050" announced in February 2025, the Daigas Group aims to be a corporate group that develops technologies and services contributing to a decarbonized society, strives to solve social issues including climate change, and is useful for the "further evolution" of daily life and business. The KOBELCO Group is promoting "KOBELCO-X (*2)" as an initiative to realize the "transformation into an attractive company." This study is one of the technologies embodying "GX (Green Transformation)" among them. We will continue the "challenge towards carbon neutrality" through the provision of technologies, products, and services that contribute to CO2 emission reduction. *1 Announced on May 9, 2023: "Commencement of Joint Study on Construction of CCS Value Chain with Shell" https://www.osakagas.co.jp/company/press/pr2023/1721439_54090.html *2 "Transformation" undertaken by the KOBELCO Group The transformations the KOBELCO Group must undertake to evolve into an attractive company are collectively named "KOBELCO-X", and seven specific Xs have been established.