Cosmo to launch Japan’s first SAF production in April

Cosmo Energy Holdings is set to launch Japan’s first domestic production of sustainable aviation fuel (SAF) in April. This will help with the country’s goal of replacing 10% of jet fuel with a cleaner alternative.

Cosmo the nation’s third-largest refiner, will produce SAF from used cooking oil at its Sakai refinery in western Japan.”Our goal is to boost SAF supply to 300,000 kilolitres by 2030 through domestic production and imports,” Takeshi Takada, general manager of new business development, said.

Japanese refiners must supply SAF equivalent to 10% of their aviation fuel sales by 2030, as Japan works to combat climate change and aligns with global efforts to cut carbon dioxide (CO2) emissions from airplanes.

A company official said 300,000 kl (1.89 million barrels) would be sufficient to meet 10% of Cosmo’s jet sales. Cosmo plans to produce 30,000 kl of SAF annually at Sakai, supply 150,000 kl from its Sakaide site in western Japan using bioethanol and import 120,000 kl from Thailand’s Bangchak and other Asian suppliers, Takada said

The refiner aims to build expertise and customer relationships by launching production and sales ahead of competitors, despite challenges in reducing costs, securing raw materials and locking in buyers, he said.

The Sakai project, targeting production of 24,000 kl in fiscal 2025 after accounting for site maintenance, has already secured most customers, including Japan Airlines (JAL), ANA and DHL.

Cosmo’s next goal is to start SAF production at Sakaide by around 2029, with a final investment decision expected in fiscal 2026. Both projects have secured government subsidies, covering about half of capital expenditures.

“Japan’s subsidy scheme is at a medium level by global standards … Countries will compete to offer attractive subsidy schemes for SAF deployment to maintain hub airport status,” Takada said.

Source: Reuters