Sumitomo eyes biodiesel mass production in Japan for decarbonization
TOKYO — Trading house Sumitomo Corp. is looking to mass-produce biodiesel in Japan using wood and sugarcane waste, in a bid to give the hard-to-make renewable fuel more of a foothold in the country.
The Japanese trading house plans to open a demonstration plant in 2025 on the southern island of Tanegashima with the University of Tokyo and Solariant Capital, a U.S. renewable energy development and investment company. After testing and getting mass production underway, the company plans to gradually increase output starting in fiscal 2027, aiming to eventually reach 1 million tonnes per year.
The facility will use wood from tree thinning and sugarcane bagasse — a fibrous residue — from a Tanegashima factory owned by Sumitomo group company Shinko Sugar. The feedstock will be blended with fuel oil.
This comes amid a recent push to cut carbon emissions from diesel, used in trucks and buses. Biodiesel fuels currently produced from used cooking oils have a high viscosity that can cause problems for engines and other vehicle parts. The Japanese government recommends fuel blends with only 5% biodiesel, which has led to limited production in the country.
Sumitomo contends that incorporating wood chips and the sugarcane bagasse will reduce viscosity, allowing for concentrations up to 30%.
The 1-million-tonne production target is equivalent to 5% of Japan’s fiscal 2022 automotive diesel consumption of 20 million tonnes. Based on current prices, that would generate about 40 billion yen ($280 million) in revenue.
Sumitomo will leverage its group’s reach to procure waste from domestic tree thinning operations, said to total 77 million tonnes a year.
The global biodiesel market is projected to grow 40% between 2024 and 2029 to reach $50.2 billion, research firm Mordor Intelligence reports. The fuel has gained more of a footing in the U.S., which requires that a certain amount of renewable fuel be mixed with gasoline and diesel, and Europe, which offers generous tax incentives.
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