Sumitomo Corp. aims to revolutionize Japan's biodiesel scene by using wood and sugarcane waste in mass-producing renewable fuel. Collaborating with the University of Tokyo and Solariant Capital, Sumitomo plans a Tanegashima plant, aiming to produce 1 million metric tons annually by 2027, potentially transforming a significant fraction of Japan's diesel consumption.
Sumitomo Corp., a key player in Japan, is embarking on a transformative venture to create biodiesel from wood and sugarcane waste, revolutionizing the country's renewable fuel industry. Partnering with the University of Tokyo and Solariant Capital, the trading house has slated the launch of a demonstration plant in Tanegashima by 2025.
The envisioned facility intends to employ wood obtained from tree thinning and sugarcane bagasse, a fibrous residue sourced from a Sumitomo group company, Shinko Sugar's factory in Tanegashima. These materials will be blended with fuel oil, aiming to address the current challenges faced by biodiesel derived from used cooking oils, which often encounter engine compatibility issues due to high viscosity.
The initiative aligns with a nationwide drive to curtail carbon emissions stemming from diesel used in trucks and buses. Japan, recommending a mere 5% blend of biodiesel due to viscosity concerns, has seen limited biodiesel production. Sumitomo's innovation proposes a solution by utilizing wood chips and sugarcane bagasse to reduce viscosity, allowing for a concentration of up to 30%.
The projected 1 million metric tons of annual production signifies a substantial portion, constituting 5% of Japan's fiscal 2022 automotive diesel consumption of 20 million metric tons. This envisaged output, calculated at current prices, is estimated to generate approximately 40 billion yen ($280 million) in revenue.
Sumitomo is poised to leverage its extensive network within the group to source waste from domestic tree thinning operations, estimated at 77 million metric tons annually.
Mordor Intelligence forecasts a significant 40% growth in the global biodiesel market by 2029, reaching a value of $50.2 billion. While the fuel has gained traction in regions like the U.S. and Europe, where regulatory frameworks support renewable fuel blending and offer tax incentives, Sumitomo's pioneering approach could potentially revolutionize Japan's biodiesel landscape.
Sumitomo's strategic move to innovate biodiesel production using wood and sugarcane waste showcases a promising solution to Japan's diesel emissions and limited biodiesel production issues. With its ambitious production targets and leveraging its network, Sumitomo's initiative could significantly impact Japan's renewable fuel landscape, potentially transforming a significant fraction of diesel consumption into sustainable biodiesel alternatives.