Japan awards Yen 114.5 bil grants for e-fuel, SAF and other green technologies

Japan's state-owned New Energy and Industrial Technology Development Organization said April 19 it has awarded a total of Yen 114.5 billion ($893.6 million) grants to pilot projects developing e-fuel, sustainable aviation fuel and other green innovation technologies.

The move is part of a slew of grants awarded by the NEDO to help Japanese companies meet the country's target of being carbon neutral by 2050 through its Yen 2 trillion green innovation fund.

Of the Yen 114.5 billion grants, ENEOS won a Yen 54.6 billion fund to develop e-fuel production technology using CO2-free hydrogen and CO2 over fiscal year 2022-23 (April-March) to FY 2028-29 for its Yen 55.8 billion project.

ENEOS said it plans to construct and start operations of a small 1 b/d e-fuel plant at its Central Technical Research Laboratory by the end of FY 2025-26 and build and startup a 300 b/d e-fuel pilot plant at one its of refineries over FY 2024-25 to FY 2028-29, with an eye to commercialize the e-fuel production technology by around 2040.

"We intend to complete developing a commercial [e-fuel] technology by around 2030 through this project," Kazuaki Hayasaka, general manager of the fuels & chemicals research center at ENEOS' Central Technical Research Laboratory, told an online press briefing.

ENEOS could commercialize its e-fuel supply before 2040 depending on actual demand for the fuel by blending with existing refined oil products, after having developed its commercial technology by around 2030, Hayasaka said.

The move by ENEOS, which targets 2040 carbon neutrality, comes as Japanese refiners are working to develop CO2-free e-fuels such as e-gasoline, e-jet fuel and e-diesel via hydrogen produced from renewable energy and CO2.

Japan aims to establish a highly efficient and massive production technology of e-fuel by 2030 in order to commercialize it by 2040 after going through the introduction, expansion and cost reduction phase in the 2030s, according to a policy recommendation from the Ministry of Economy, Trade and Industry.

First SAF

The NEDO also granted Yen 29.2 billion grant for Idemitsu Kosan's Yen 45.7 billion project over FY 2022-23 to FY 2026-27 to develop and commercialize its supply chain of SAF using the ATJ, or the Alcohol to Jet technology -- launching the country's first commercial SAF supply chain by end-March 2027.

For its project, Idemitsu said it plans to construct the world's first 100,000 kl/year ATJ-technology-based SAF production plant at its Chiba complex in Tokyo Bay in FY 2025-26.

Idemitsu also plans to procure 180,000 kl/year of bioethanol as SAF feedstock mainly from Brazil with supplementary volumes from Japan in order to start its SAF supply from FY 2026-27, a company spokesperson said.

In the process of developing its SAF production technology, Idemitsu aims to extract more than 50% of neat SAF from ethanol at a production cost in the Yen 100-level/liter.

Once its SAF production comes onstream, Idemitsu plans to blend up to 50% of SAF into conventional jet fuel for its supply, the spokesperson said.

Looking further ahead, Idemitsu also aims to target a 50% share of the domestic SAF market of around 1 million kl, or 6.29 million barrels/year, in 2030, the spokesperson said.

The move by Idemitsu comes as the company said last year it aims to start supplying SAF in 2025 at an initial annual volume of 100,000 kl as part of its efforts to pursue 2050 carbon neutrality.

'Green LPG'

The NEDO also awarded Furukawa Electric Yen 3.6 billion for its Yen 5.3 billion project over FY 2022-23 to FY 2030-31 to develop a synthetic technology that uses an innovative catalytic process to produce "green LPG" from livestock manure.

The project aims to establish a technology to produce 1,000 mt/year of "green LPG" by 2030, according to the NEDO.

The development comes as the Japanese government sees that 60% of the current domestic LPG will remain in 2050 because of its need in industry as well as feedstocks for chemical use.