Thailand's Bangchak, Japan's Sumitomo join forces for green UCO-to-SAF supply chain

Thailand-based energy firm Bangchak and Japan's Sumitomo Corp. have signed a cooperative framework agreement for the procurement of used cooking oil and the sale of sustainable aviation fuel, the companies said in an April 3 joint release.

The deal aims to create a strong and efficient supply chain to bring UCO into the production and distribution of SAF.

Bangchak unveiled its first SAF manufacturing business plan in September 2022. The company has begun construction of a SAF manufacturing plant at the Bangchak Phra Khanong Refinery in Bangkok, with a production capacity of 1 million liters/day using material derived from UCO. Commercial operations at the plant are set to start around the end of 2024.

SAF production is expected to begin in the first quarter of 2025. The SAF production unit comprises two main units -- the used oil quality improvement unit (Pretreating Unit) and the SAF production unit.

Japanese refiner Cosmo Oil also signed an agreement Dec. 7 to buy SAF from Bangchak.

Cosmo, JGC Holdings and Revo International established the Saffaire Sky Energy joint venture, which initiated the construction of Japan's first SAF production facility at Cosmo's Sakai Refinery in Osaka in May 2023. Cosmo expects to complete construction of the facility by the second half of the 2024 financial year and plans to use UCO to produce hydroprocessed esters and fatty acids SAF.

In March, Japan updated its transport biofuel standards to boost domestic SAF production, including alcohol-to-jet SAF. The country is also planning to develop a separate SAF target volume by the time SAF is commercially available.

Japan's Ministry of Land, Infrastructure, Transport and Tourism aims to transition 10% of its conventional jet fuel to SAF by 2030.

Platts, part of S&P Global Commodity Insights, assessed SAF cost of production (PFAD) Southeast Asia at $1,527.68/mt on April 3, up $29.64 from April 2.