Agreement Signed by 6 Companies to Collaborate on Biofuels, Feedstocks between Japan, South Korea

(Eneos/Biobased Diesel Daily) DS Dansuk Co. Ltd., Eneos Corp., HMLP Co. Ltd., Nomura Jimusho Inc., Yoshikawa Yushi Co. Ltd. and Sapporo Yushi Co. Ltd. announced March 22 that they have entered into a memorandum of understanding (MOU) earlier this year designed to consider collaboration towards biofuels and feedstocks between Japan and South Korea.

“The objective of this MOU is to jointly aim for the realization of a carbon-neutral society,” Eneos stated.

Specifically, the MOU includes a joint study of feedstock supply (used cooking oil, tallow, etc.) for the Wakayama sustainable aviation fuel (SAF) production plant that Eneos is commercializing, establishment of a feedstock hub for the Wakayama plant, and supply of biofuels by leveraging the supply chain and knowledge of each company.

South Korea-based Dansuk is contributing to carbon reduction by producing ecofriendly bioenergy such as biodiesel and is currently constructing hydrotreated vegetable oil (HVO) pretreatment facilities to produce SAF, aiming to complete them in the second half of this year.

Dansuk plans to actively explore strategies to produce ecofriendly energy as an opportunity for this collaboration.

In the Eneos Group’s long-term vision, the company states that it will take on the challenge of achieving both a stable supply of energy and materials and the realization of a carbon-neutral society.

As a part of this effort, Eneos is building an integrated system for SAF, from feedstocks procurement to in-house manufacturing and sales.

Taking the opportunity of this collaboration, Eneos said it will promote the development of a supply chain for the stable procurement of feedstocks together with Dansuk, HMLP, Nomura Jimusho, Yoshikawa Yushi, and Sapporo Yushi.

HMLP is a trading company that has a range of experience and achievements in export and import of oils and fats and related products to and from Japan.

Utilizing its expertise, HMLP is responsible for the stable procurement of waste cooking oil both from domestic and international sources.

Utilizing its expertise in raw material procurement, Nomura Jimusho is responsible for the stable procurement of waste cooking oil both from domestic and international sources.

Yoshikawa Yushi specializes in the collection and recycling of waste cooking oil and is responsible for the collection and refining of waste cooking oil domestically.

Sapporo Yushi has had over 30 years of extensive experience and a proven track record in the collection of waste cooking oil.

The company is responsible for the collection and refining of waste cooking oil domestically, primarily in Hokkaido. READ MORE

South Korea plans to boost research and development of carbon-neutral aviation biofuels, or bio-jet fuel, as the aviation industry works to meet global net-zero targets. Korean jet fuel producers are concerned that regions mandating the use of bio-jet fuels, such as the European Union, could threaten their position as one of the world’s leading jet fuel exporters.

The Ministry of Trade recently agreed to incorporate the “bio-aerosol response project” into its new pre-feasibility study applications on Mar. 19. This project aims to provide R&D support to accelerate the commercialization of bio-jet fuels and devise strategies for securing the necessary raw materials for fuel production.

The country’s oil refining and aviation sectors are concerned about their apparent lack of bio-jet fuel production technology. GS Galtex, a Korean energy and chemical company jointly owned by Chevron and GS Group, is the only domestic refiner that has imported a small amount of bio-jet fuel from Neste for pilot test production. But this test is merely a preliminary exploration - Korea has yet to produce efficient bio-jet fuel for commercial purposes.

Airlines that fail to comply with ICAO’s requirements for blending bio-jet fuel with conventional jet fuel will be required to buy carbon emission credits. Given that the EU plans to continue raising the bio-jet fuel blend ratio, the pressure on the Korean aviation sector is also expected to increase. EU’s blending mandates for jet fuels - mixing conventional jet fuels with sustainable aviation fuels - is set at 2% next year and will rise to 6% in 2030, 20% in 2035, and 70% in 2050.

The amount of carbon credits airlines must purchase for not following the mandate has yet to be decided. “If carbon credits pricing or the mandatory blend ratio is too high, airlines could suffer financially, and many have to suspend operations of certain air routes,” said an industry insider.

Korea’s booming export market for jet fuel, which has contributed significantly to the country’s economy, also faces potential disruption. According to the International Energy Agency (IEA), Korea’s jet fuel exports reached 10.83 million tons in 2022. The country ranked first in jet fuel exports, ahead of the U.S. and the Netherlands, which exported 8.48 million tons and 7.72 million tons, respectively. Korea’s jet fuel exports were six-fold that of Japan, the fourth-largest exporter at 1.68 million tons.

In response to these challenges, the government is introducing supportive measures such as tax incentives so domestic refiners can better engage in bio-jet fuel R&D. READ MORE