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.
Japanese trading house Sumitomo Corp plans to open a demonstration plant in 2025 on the southern island of Tanegashima with the University of Tokyo and Solariant Capital, a US 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 one 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.
About Sumito
Sumitomo Corporation Group conducts business activities in a wide range of industries on a global scale, with its business units, an initiative and regional organizations all over the world working closely together. Strategically and organically integrating our robust business foundation and our diverse, high-level functions, we create new values by staying a step ahead in dealing with changes and transcending existing frameworks as a way to help solve social issues.
