Dissemination of Renewable Fuels to achieve GHG Zero-Emission

ITOCHU Corporation

Outline

Itochu Corporation (“Itochu”) is trying to establish the supply chain of Renewable Fuels such as Renewable Diesel (“RD”) and Sustainable Aviation Fuel (“SAF”) to disseminate this fuel to Japan. Renewable Fuels are produced by hydro treating the sustainable feed stocks such as wastes and residues. Renewable Fuels are now mainly used in Europe and US West coast. In the “Energy Saving Act” and “Act on Promotion of Global Warming Countermeasures” of Japan, this Renewable Fuels will be treated as GHG zero emission and also it can save about 70-90% of GHG emission in Life Cycle Assessment (“LCA”) basis.

In Oct 2020, Itochu succeeded to supply SAF at Haneda Airport and Narita Airport as a first case in Japan for using in a commercial flight in partnership with All Nippon Airways Co., Ltd. (“ANA”). For RD as well, Itochu is now trying to realize a first case of suppling RD to Japan. Itochu will continuously try to disseminate Renewable Fuels to Japan and will contribute to reduce the GHG emission to achieve the challenging goal, “GHG Zero Emission by 2050”.

Description

Itochu is cooperating with suppliers such as NESTE Corporation (“NESTE”), which is one of the biggest producer of Renewable Fuels, to disseminate RD and SAF to Japan. In addition to the 70-90% of reduction of GHG emission in LCA basis, one of the biggest merit of introducing Renewable Fuels is that it can use the same supply infrastructure of petroleum products. For example RD meets the JIS spec of Diesel oil and SAF meets the international spec of Jet fuel so it can use the existing supply system of petroleum products and doesn’t require additional investment to supply. Electric Vehicle (“EV”) or Fuel Cell Vehicle (“FCV”) can also be an effective solution of GHG reduction but it requires a big additional investment to prepare the vehicle itself and the supply infrastructure so we assume that conventional vehicles will continue to be used until 2050. So to achieve the GHG zero emission, GHG reduction of the conventional vehicles will be required and we believe that Renewable Fuels can be a solution.

Renewable Fuels are now mainly used in Europe and West coast of United States, but to disseminate in Japanese market it will be required to establish an incentive system and to make Renewable Fuels more popular. Itochu succeeded to supply SAF with ANA in October 2020 and also Itochu is trying to increase the supply of RD to Japanese market, and in the future we would like to produce Renewable Fuels in Japan.