Japanese group begins blending, supplying domestic SAF

  • Market: Biofuels, Oil products
  • 03/04/23

Japanese trading house Itochu and refiner Fuji Oil have started supplying domestically-blended sustainable aviation fuel (SAF), in partnership with the country's land and transport ministry (Mlit).

A flight inspection aircraft consumed around 50 kilolitres (314 bl) of the blended SAF, which included 5kl of neat SAF produced by Finnish biofuel producer Neste, during 15-31 March. The neat SAF blending ratio was 11.46pc, Mlit said. The aircraft, which is owned by Mlit and based at Japan's central Chubu International Airport, flies to ensure wireless systems for flight operations.

The neat SAF was imported by Itochu, and blended into conventional jet fuel at Fuji Oil's oil terminal in Chiba prefecture in February, following an initial agreement announced in November last year. The neat SAF supply from Neste to Itochu was a spot contract, but Itochu is considering further procurement.

Japanese airline companies All Nippon Airways and Japan Airlines will also secure SAF from Itochu, for their flights departing and landing at Haneda and Narita, as well as at the Chubu International Airport.

Mlit revised Japan's SAF demand outlook late last year to 1.7mn kl in 2030, comprising 880,000kl for domestic flights and 830,000kl for international flights. Japan is targeting 10pc use of SAF by domestic airlines by 2030.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
27/03/24

Argentina biofuel companies push for deep changes

Argentina biofuel companies push for deep changes

Buenos Aires, 27 March (Argus) — Argentinian biodiesel companies are urging the government to speed up regulatory changes so they can ramp up production and exports. The association of oilseed producers (Ciara) is not only in favor of President Javier Milei's sweeping omnibus reform package , but is lobbying for deeper changes to increase the blending mandate, ramp up production and move to second-generation biodiesel production. The omnibus bill would change more than 100 articles in the energy sector, including the law that regulates biofuels. The bill was presented in December, but has stalled in congress since February. "Approval of the omnibus law is essential, because the current biofuels law is bad for the industry and bad for the consumer," Ciara's president Gustavo Idigoras told Argus . The changes proposed by the Milei administration would, among other things, eliminate price controls, open the door to investment in new technologies and oil-seed crops, such as camelina and carinata, increase exports, and let all companies in the biodiesel sector supply the domestic market. Under current rules, only small firms can supply the domestic market, while large industrial firms export biodiesel. The legislation also increases the blending mandate for biofuels to 7.5pc from 5pc. Ciara wants the mandate increased to 15pc, which would bring Argentina in line with what is planned for Brazil, where blending is at 14pc and should increase to 15pc under legislation recently approved by the Brazilian congress . The goal in five years should be for a harmonized Argentina-Brazil biodiesel market, Idigoras said. He also said the changes would have an immediate impact, because Argentina has installed capacity to produce 4mn metric tonnes (t)/yr of biodiesel, but is only producing 1.5mn t/yr because of restrictions in the domestic market and exports. Ciara forecasts exports to increase to at least 2.5mn t/yr if the regulatory changes are approved. Argentina exported approximately 280,000t in 2023, a historic low, because of drought. It exported 1.4mn t in 2022. Argentina has the right conditions for hydrotreated vegetable oil (HVO) plants and to produce sustainable aviation fuel and biofuel for the maritime industry, Idigoras said, adding that there is a window of at least 10 years where biofuels will play a key role in the energy transition. Green hydrogen will eventually be a competitor, but it will take time for it to scale up production to meet demand, he said. The industry could enact sector-specific modifications if the omnibus bill was not approved, but that would not be ideal, Idigoras said. Lawyers working on energy projects agree, saying investors would be less committed if changes were made through executive orders instead of laws. An executive order would have less weight because it depends on the administration in power, while the omnibus is a law approved by congress, according to Ignacio Criado, an attorney at the Tanoira Cassagne law firm. "The energy sector needs investment and the omnibus bill is a shortcut," he said. "It simplifies regulations and provides transparency." By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

Bolivia opens first biodiesel plant to curb imports


27/03/24
News
27/03/24

Bolivia opens first biodiesel plant to curb imports

Montevideo, 27 March (Argus) — Bolivia inaugurated operations of a 1,500 b/d biodiesel plant this week, the first in the country and part of a strategy to lower crude imports. The plant, in the eastern Santa Cruz department, will use oil seeds, palm oil and recycled cooking oil as feedstock, according to state-run oil company YPFB. A second biodiesel plant that will also run on similar feedstocks is under construction in El Alto, in the highland La Paz region, scheduled for completion in November. Bolivia has traditionally imported crude, but years of declining oil and natural gas reserves and increased demand has required it to increase imports. It has exported gas to neighboring Argentina and Brazil via pipeline, but the falling reserves will force it to stop exports to Argentina in October. It plans to continue exporting to Brazil for the rest of the decade. Bolivia consumes around 35,000 b/d of diesel and 34,000 b/d of gasoline, but produces 12,000 b/d and 20,000 b/d, respectively. It imported a 150,000 bl shipment of crude from Argentina in early March, and plans to import 1.6mn bl this year. YPFB is also working on a hydrotreated vegetable oil plant in Santa Cruz, with a second one planned for La Paz. Bolivia is the tenth-largest soybean producer in the world, with output of 3.4mn t in 2023, according to the US Department of Agriculture's Foreign Agricultural Service. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Q&A: Singapore leads push for marine decarbonisation


27/03/24
News
27/03/24

Q&A: Singapore leads push for marine decarbonisation

Singapore, 27 March (Argus) — Argus spoke to Ashish Anilan, assistant director at classification society Bureau Veritas Marine & Offshore, about the expected trends and the impact of EU-led emissions compliance regulations on the Asian maritime sector this year. How will Singapore impact the push for maritime decarbonisation in the coming few years? Though Singapore's position as the world's largest bunkering hub attracts decarbonisation initiatives, its true impact hinges on concrete actions. Initiatives like the Singapore Green Plan 2030 translate sustainability goals into action plans. Recent expressions of interest in electric harbour craft and bunkering for cleaner fuels like methanol and ammonia demonstrate Singapore's commitment to clean energy solutions and alternative fuel adoption. Additionally, digital and green corridor initiatives foster regional collaboration, supply chain resilience and operational efficiency, all crucial for achieving broader sustainability goals. By embracing concrete action, Singapore is showing the way as a true leader in maritime decarbonisation and this can inspire other ports and hubs across the world. What are your expectations for 2024? The maritime sector in 2024 still faces continued fuel price volatility, increased scrutiny on alternative fuels and a push for infrastructure development. Policy-wise, the implementation of EU regulations and potential expansion of regional or international carbon pricing mechanisms are anticipated. At IMO we will see the first year of CII [Carbon Intensity Indicator] verification and conversations on market-based measures. Shipping is a "hard-to-abate" sector and the inherent fragmentation makes decarbonisation a harder challenge. Do you think mandates will drive the change or market economics? Despite being a highly fragmented and a "hard-to-abate" sector, the shipping industry presents a unique opportunity for cost-effective emissions reduction schemes and efficiency improvement plans. It is crucial to recognise that international shipping primarily functions as a commodity mover, and its decarbonisation plays a key role in both supply chain resilience and the life-cycle emissions footprint of the cargo it carries. While regulations and mandates can offer valuable measurement tools, market forces often drive the primary change, facilitated by commitments from cargo owners and incentives provided by financial institutions. Will t he implementation of EU ETS, CII ratings and the upcoming EU FuelMaritime regulations be a deterrent or pave the way for fuel adoption by shipowners in Asia? While the upcoming EU regulations will initially increase compliance costs for Asian shipowners and their charterers engaging in European trade, they will also create multifaceted pathways towards cleaner fuel adoption. The premium for the cleaner fuels will be justified by the penalties imposed by market-based-measures. Alongside cost-effective efficiency measures, a long-term strategy incorporating supply chain collaboration and effective cost sharing mechanisms will be essential for these regulations to truly help incentivise the energy transition. Additionally, the broader Asian market may benefit from the potential harmonisation of environmental regulations spurred by the European framework. By Mahua Chakravarty Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Japan’s Mitsui, Idemitsu to cut cracker capacity


27/03/24
News
27/03/24

Japan’s Mitsui, Idemitsu to cut cracker capacity

Tokyo, 27 March (Argus) — Japanese petrochemical producers Mitsui Chemicals and Idemitsu plan to reduce the output capacity of their ethylene crackers by the April 2027-March 2028 fiscal year, on the back of weakening domestic demand and increasing supplies. Mitsui Chemicals and Idemitsu in May 2009 had agreed to integrate operations of their ethylene crackers in east Japan's Chiba prefecture by forming a 50:50 joint company. Since April 2010 this company has operated Mistui Chemicals' 550,000 t/yr cracker and Idemitsu's 370,000 t/yr cracker. The companies then cited weakening domestic demand, a global economic recession, as well as the launch of new, large-scale petrochemical production plants in the Middle East and China for their integration. They targeted to optimise operations to strengthen the competitiveness of their crackers. They have now agreed to further rationalise their cracker operations by scrapping Idemitsu's 370,000 t/yr Chiba facility by 2027-28. Weakening domestic ethylene demand and growing supplies, especially from China, have prompted them to take the further step to cut cracker capacity, they said on 27 March. The companies also plan to work more closely based on this agreement, aiming to achieve carbon neutrality of their industrial complexes. Mitsui Chemicals has already decided to exit polyethylene terephthalate production at its Iwakuni Otake plant in south Japan's Yamaguchi prefecture by October. Idemitsu has decided to completely halt producing bisphenol-A by October. The petrochemical producers have also accelerated a switch to more environmentally-friendly feedstocks. Mitsui Chemicals has used biomass-based naphtha and pyrolysis oil to manufacture petrochemical goods. Idemitsu has boosted output of bio-products , while attempting chemical recycling to generate raw oils from waste plastics. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Australia softens fuel efficiency standard targets


27/03/24
News
27/03/24

Australia softens fuel efficiency standard targets

Sydney, 27 March (Argus) — The Australian federal government has agreed on draft legislation for its fuel efficiency standards for new passenger and light commercial vehicles, which will come into effect with reduced targets and later than originally proposed. The scheme will start on 1 January 2025 as planned by the government but manufacturers will not begin earning credits or penalties until 1 July 2025. This will enable it to prepare and test data reporting capabilities in partnership with the industry, the federal government said. Some sport utility vehicles, such as the Toyota Landcruiser and Nissan Patrol models, will also be recategorised as light commercial vehicles that will now have smoother targets compared with the government's preferred model released in early February. The government said this reflects recent adjustments announced by the US Environmental Protection Agency to its vehicle standards, which gave US auto manufactures more time to scale up the production of electric vehicles (EVs). Under Australia's proposed emissions standards, whose bill was introduced for a vote in parliament on 27 March, manufacturers will be set an average carbon dioxide (CO2) target for the range of vehicles they sell. Those will be lowered over time to mandate the sale of more fuel efficient, low or zero emissions vehicles. Companies that exceed their emissions targets will receive credits, which they might sell to less efficient manufacturers or use in future years. Those that fail to meet the requirement will need to make it up over the following two-year period, pay a penalty or acquire credits. The government's preferred model was criticised by the Federal Chamber of Automotive Industries (FCAI) as unreasonable , given the short timeframe for manufacturers to adjust their fleets. The FCAI welcomed the changes made by the government, although it said it would still need to review the draft legislation in detail to understand the impact to the industry and consumers. Associations such as the Electric Vehicle Council of Australia and the Climate Council supported the bill, with the former saying the "strong, ambitious standards" will drive a greater update of EVs. Charging boost Together with the bill, the federal government announced it will provide A$60mn ($39.2mn) to boost EV charging at Australian car dealerships. It said the standards will reduce greenhouse gas (GHG) emissions from new passenger vehicles by more than 60pc by 2030, while those from new light commercial vehicles will be nearly halved over the same period compared with a 60pc reduction originally. Environmental group Greenpeace said the final proposal is a meaningful effort to reduce transport pollution but it will achieve only 80pc of the emissions reduction originally planned for light commercial vehicles. "The decision to weaken the standards when it comes to light commercial vehicles will mean around 20pc more carbon pollution will be allowed by 2030 compared to the original proposal, so we expect the government will be looking at other options for reducing pollution from transport in order to meet their climate targets," Greenpeace said. Transport makes up 98mn t/yr or 21pc of Australia's total GHG emissions. By 2030 it is expected to be the largest source of emissions as the electricity sector decarbonises. Government data show that on average passenger cars in Australia emit at a rate 20pc higher than the US vehicle fleet. Passenger cars contribute 41mn t/yr of CO2 equivalent (CO2e), or 42pc of all transport emissions, with light commercial vehicles emitting 18mn t/yr CO2e or 18pc of total transport emissions. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more