Idemitsu Kosan SAF project selected for subsidy by Japan’s government

A sustainable aviation fuel (SAF) project proposed by Idemitsu Kosan Co. Ltd. as part of Japan’s Ministry of Economy, Trade and Industry’s investment-promotion measures using GX Economic Transition Bonds was adopted Feb. 20, according to the company.

The project to seeks to establish a manufacturing facility and supply system for SAF through the hydroprocessed esters and fatty acids (HEFA) approach at the Tokuyama plant in Shunan City, Yamaguchi Prefecture.

A portion of the total project costs will be covered by the GX Economic Transition Bonds.

These are government bonds issued by the Japanese government to effectively lead to the creation of new markets and demand in order to achieve net-zero greenhouse-gas (GHG) emissions by 2050.

Plans are in place to support the upfront investment of 20 trillion yen (USD$133.7 billion) in private businesses.

The subsidy will mainly be used by Idemitsu Kosan for construction of the SAF manufacturing facility with an annual production capacity of 250 million liters (66 million gallons) at the Tokuyama plant.

“Our company aims to start producing SAF at our Tokuyama facility by fiscal-year 2028, and through this project we will construct manufacturing facilities and establish a domestic supply system,” Idemitsu Kosan stated.

The company added that it is currently working on the basic design for the SAF manufacturing facility, with a final-investment decision to be made within fiscal-year 2025.

“We plan to use multiple oils and fats with high GHG-reduction rates, such as waste oil, soybean oil and, in the future, oil plants such as pongamia as raw materials,” Idemitsu Kosan said.

The company said it was selected in recognition of its commitment to business execution, business strategy and efforts to realize a consistent supply chain, from raw-material procurement to manufacturing and sales as an energy supplier.

“We are promoting business restructuring to become a main player in energy and carbon-neutral solutions,” Idemitsu Kosan stated. “As a foundation for this, we will evolve our refineries and facilities that produce fossil-based energy into carbon-neutral transformation centers, which are supply bases for carbon-neutral fuels and products. The SAF business is one of our four priority businesses for 2030, and we aim to build a domestic supply system of 500 million liters (132 million gallons) per year.”

In order to produce and supply SAF stably and economically over the long term, Idemitsu Kosan said it believes diversification of raw-material procurement methods and production methods is important, and that it positions SAF production at the Tokuyama facility as an essential measure.

“In order to contribute to the decarbonization of the aviation industry, we will steadily work toward the early social implementation of SAF with the support of the government,” the company said.