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Japanese trading house Sumitomo Corp [9053:JP] is envisioning the mass production of biodiesel in Japan using wood and sugarcane waste, as reported by Nikkei Asia on January 9. Sumitomo will collaborate with the University of Tokyo and Solariant Capital, a US renewable energy company, to open a demonstration plant on the southern island of Tanegashima in 2025. Specifically, the facility will collect wood sourced from tree thinning and sugarcane bagasse from a Tanegashima factory owned by Shinko Sugar, a Sumitomo subsidiary. These natural feedstocks will then be blended with fuel oil to produce biodiesel. Upon completion of testing, the company plans to raise output gradually from fiscal year 2027, with the ultimate target of reaching an annual output of 1 million tons.
Sumitomo’s large-scale biodiesel production plan comes amid Japan’s recent push to reduce carbon emissions from diesel vehicles, such as trucks and buses. Currently, the Japanese government recommends only 5% biodiesel in fuel blends, as the biodiesel fuels produced from used cooking oils have a high viscosity that could damage engines and other vehicle parts. Sumitomo looks to address the problem by adding wood chips and sugarcane bagasse, which it believes will reduce viscosity and allow for biodiesel blends of up to 30%. The company plans to purchase waste from domestic tree thinning operations, estimated at 77 million tons annually. Research firm Mordor Intelligence underscores the significant growth potential in biodiesel demand, anticipating the global biodiesel market to grow 40% between 2024 and 2029 to reach USD50.2bn.
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