Japanese venture capital firm invests in Australian CCS developer deepC Store

Japanese venture capital firm Incubate Fund has invested in the world’s first transboundary floating carbon capture and storage (CCS) hub, led by Australian company deepC Store.

Incubate Fund will invest JPY350 million (approximately A$3.5 million) to develop deepC Store’s flagship project, CStore1, utilising gigaton-scale offshore carbon storage sites off the coast of Western Australia.

Incubate Fund’s investment in CStore1 will expand Japan’s storage capacity beyond its borders, supporting the country’s emissions reduction targets. The site will initially store around 3 million tonnes of liquefied CO₂ annually from industrial emitters in Japan and across the Asia-Pacific.

‘For Japan’s industries to achieve carbon neutrality, international collaboration that transcends technology and capital is essential,’ says Masahiko Homma, General Partner of Incubate Fund.

How it works

CStore1 will receive liquified carbon dioxide (CO₂) from industrial sources and transport it to a floating storage and injection hub. The CO₂ will then be injected into rock formations deep underground. Once injected, the CO₂ is physically trapped in the rock formation, safely and permanently storing the CO₂.

CCS technologies like these are a critical tool in global emissions reduction, trapping industrial emissions underground to prevent large amounts of CO₂ from entering the atmosphere.

‘The creation of a new industrial ecosystem centred on CCS has the potential not only to accelerate Japan’s path towards carbon neutrality but also to drive the energy transition across the entire Asia-Pacific region,’ says Homma.

‘We have high expectations that deepC Store, together with major Japanese and Australian partners, will co-develop world-leading supply chains and infrastructure technology.’

‘We are delighted to welcome Incubate Fund, one of Japan’s leading venture capital firms, as an investor,’ says Daein Cha, Founder and Managing Director of deepC Store.

‘This partnership reflects our shared commitment to realising CStore1 and expanding its role in driving decarbonisation across the Asia-Pacific region. I am confident that this investment marks a significant step forward, supporting our efforts to turn this vision into reality,’ says Cha.

deepC Store’s flagship project, CStore1, will utilise gigaton-scale offshore carbon storage sites off the coast of Western Australia. Image courtesy of deepC Store.

Japan’s focus on CCS

The International Energy Agency estimates that to reach global climate targets, 5.1 billion tonnes per year of CO₂ must be stored worldwide. Japan accounts for 170 million tonnes of that annual storage requirement. Currently, Japan has no operational CCS facilities, and global CCS capacity is only at 49 million tonnes per year.

In February 2024, the Japanese Government approved the CCS Business Act to establish a framework for CCS deployment in Japan. With a strong demand for decarbonisation, major Japanese companies are focusing on repurposing depleted oil and gas fields as CO₂ storage sites. While these sites can trap carbon effectively, their storage capacity relative to Japan’s emissions is limited.

Japan’s decarbonisation strategy targets both domestic and overseas storage capacity. The country’s limited capacity has led to international collaborations to support decarbonisation, including Japanese power company J-Power partnering with deepC Store, making it the first transboundary CCS in the Asia-Pacific region.

CCS opportunities in Australia

Australia’s Future Gas Strategy states that natural gas will continue backing renewables and powering hard-to-abate industries for some years. One of the key actions in the Future Gas Strategy is to promote the geological storage of CO2 to support the Asia-Pacific region’s transition to net zero.

In a speech on decarbonising LNG with CCS at World Expo 2025, Australia’s Minister for Resources Madeleine King said ‘Australia and Japan are building the rules, the projects, and the supply chains to make [CCS] work at scale.’

In 2024, Australia granted 10 new greenhouse gas storage assessment permits as part of the Offshore Greenhouse Gas Storage Acreage Release.

‘One of those went to J POWER, which is working with Australian companies deepC Store and Azuli International to progress floating storage and injection concepts that could aggregate CO₂ volumes from Japan,’ says Ms King.

The Australia Government is currently reviewing the regulatory frameworks for offshore CCS and bilateral agreements on carbon sequestration. This approach will ensure the right policy and regulatory settings are in place for industry to make investment decisions on their projects.

‘Australia has huge potential for CCS,’ says Ms King. ‘We have the right geological formations, the right infrastructure, and the right skills to be at the forefront of CCS and to help our regional partners in their own decarbonisation journeys.

Australia hosts one of the largest CCS projects in the world – Chevron’s Gorgon Project. The project has stored more than 11 million tonnes of CO2 since 2019. There are currently 18 commercial-scale CCS ventures in operation, proposed, or undergoing trial stages in Australia.

‘Australia and Japan have built world-class LNG supply chains together,’ says Ms King. ‘Now, together, we can decarbonise them, while maintaining energy security and creating highly skilled jobs. We can cut millions of tonnes of emissions in our 2 countries and across the entire Indo-Pacific.’