In Short : As of my last knowledge update in January 2022, I don’t have specific information on Japan’s Sustainable Aviation Fuel (SAF) feedstock program being driven by a carbon offset scheme. However, the use of carbon offset schemes to support sustainable and low-carbon initiatives, including the production of sustainable aviation fuel, is a common practice globally.
In Detail : Aim to transition 10% conventional jet fuel to SAF by 2030
Planned production launch of alcohol-to-jet SAF by 2027
Expanded bioethanol consumption estimated at 1.3 bil liters by 2030
Japan’s sustainable aviation fuel feedstock eligibility and procurement will be driven by the carbon offset and reduction scheme for international aviation default life cycle CO2 emissions values, according to the US Department of Agriculture’s annual biofuels report released Dec. 5.
In March, Japan updated its transport biofuel standards, maintaining its annual target volume of on-road bioethanol at 824 million liters until March 2028. However, boosting domestic SAF production, including alcohol-to-jet SAF, is Japan’s primary focus in expanding biofuel consumption.
The country is also planning to develop a separate SAF target volume by the time SAF is commercially available. The Ministry of Land, Infrastructure, Transport and Tourism aims to transition 10% of conventional jet fuel to SAF by 2030.
According to the report, Japanese oil refineries announced plans to launch production of CORSIA-eligible alcohol-to-jet SAF by 2027 with an expected annual bioethanol consumption of 600 million liters. The companies will expand production capacity and annual bioethanol consumption is expected to reach 1.3 billion liters by 2030. The International Civil Aviation Organization, or ICAO, adopted a global, market-based mechanism named CORSIA to address CO2 emissions resulting from international aviation. Under this, a set of sustainability criteria has been developed for aviation fuels to qualify as CORSIA eligible fuels.
On May 26, the agency for natural resources and energy under MLIT presented a draft interim report on SAF introduction in Japan. It announced plans to set a new separate target volume for SAF, beyond the current 500 million liters of crude oil equivalent for the transportation sector under the Sophisticated Act, before SAF is commercially available.
MLIT estimated that by 2030 Japanese airports would likely use 2.5 billion-5.6 billion liters of SAF out of a total 10.9 billion-12.3 billion liters of jet fuel to meet the CORSIA goals.
According to reports, with domestic demand for gasoline expected to decline by about 2% per annum, Japanese industries see SAF as a real opportunity to expand the country’s liquid biofuel market.
Cosmo Oil, JGC Holdings, and Revo International established a joint venture called Saffaire Sky Energy, which started construction of Japan’s first SAF production facility at Cosmo’s Sakai Refinery in Osaka in May 2023.
Cosmo Oil expects to complete construction of the facility by the second half of financial year 2024. It plans to use used cooking oil to produce hydro-processed esters and fatty acids, or HEFA, SAF at an annual supply of 30 million liters.
Japan’s largest oil refinery, ENEOS, and French TotalEnergies are planning to establish a HEFA SAF production facility at the ENEOS Wakayama Refinery in Arida13. ENEOS plans to use UCO and animal fats to produce 300,000 mt of SAF by 2026.
METI and Japanese oil refineries have not promoted the use of on-road biodiesel due to limited demand for variable biodiesel quality and feedstock availability. Some municipalities have small-scale, highly localized environmental projects focused on biodiesel production from UCO and vegetable oils. Japan’s on-road biodiesel use remains limited at about 10 million liters.
For the most part, domestic biodiesel is derived from UCO and other fats and oils. As the price of UCO has surged, biodiesel manufacturers have had difficulties securing UCO. Japanese power plants have been dramatically increasing its wood pellet and other agricultural residue imports for METI’s feed-in tariff program.
Platts assessed South-Eastern Asian sustainable aviation fuel cost of production at $1,500.06/mt Dec. 5, down $29.40/mt day on day, S&P Global Commodity Insights data showed.