ITOCHU Announces Commencement of Sustainable Aviation Fuel (SAF) Supply to Japan Airlines

(Itochu Corporation) ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Keita Ishii, President & COO; hereinafter "ITOCHU") announced today that it has reached an agreement with Japan Airlines Co., Ltd. (headquartered in Shinagawa-ku, Tokyo; Yuji Akasaka, President & CEO; hereinafter "JAL") to supply sustainable aviation fuel (hereinafter "SAF") produced by Neste OYJ (headquartered in Finland; Matti Lehmus, President and CEO; hereinafter "Neste", so called "Neste MY Sustainable Aviation Fuel", to JAL. SAF will be supplied as fuel for the "Sustainable Charter Flight" scheduled to be operated by JAL on the Tokyo (Haneda) - Okinawa (Naha) route on November 18. ITOCHU and JAL have signed a memorandum of understanding to discuss toward SAF supply in FY2023 as well.

The International Civil Aviation Organization (ICAO) General Assembly has set a goal of net zero CO2 emissions from aircraft by 2050. In addition, from 2024 onward, the industry will be required to reduce or offset 15% of its emissions from 2019 levels. The trend of decarbonization in the airline industry is expected to further accelerate, and it is expected that the volume of SAF distribution will increase in Japan in the future as well.

In this environment, the commencement of SAF supply to JAL, who is one of the leading Japanese airline company with a broad flight service network, is believed to make a significant contribution to achieving the goal of the Civil Aviation Bureau of the Ministry of Land, Infrastructure, Transport and Tourism to replace 10% of all aviation fuels with SAF by 2030.

Neste, the world’s leading producer of renewable fuels, is expanding its SAF production capacity globally. Following the completion of the Singapore refinery expansion and the Rotterdam refinery modification, its global annual production capacity will be 1.5 million tons per year by the end of 2023 and 2.2 million tons per year by 2026.

ITOCHU has concluded a Branded Distribution Marketing Agreement with Neste in February 2022, and will work for the stable supply of SAF in Japan under the partnership. ITOCHU has already established a stable SAF supply chain at Haneda Airport and Narita International Airport in Japan, e.g., setting up a domestic supply chain ranging from SAF import and quality management to the SAF delivery up to airports, extending the supply chain up to aircrafts. ITOCHU plans to expand the SAF supply base to Chubu Centrair Airport (expected to be in FY2022) and Kansai International Airport (expected to be in the first half of FY2023), and expand SAF supply to both domestic and overseas airlines.

ITOCHU has included "Enhancing Our Contribution to and Engagement with the SDGs through Business Activities" in the basic policies in its medium-term management plan. By increasing the market prevalence of renewable fuels in cooperation with leading partners, we will continue to contribute to the realization of a recycling-oriented society. READ MORE

Excerpt from Itochu: ITOCHU Corporation (Headquartered in Minato-ku, Tokyo; Keita Ishii, President and COO; hereinafter "ITOCHU") and Raven SR, Inc. (Headquartered in Wyoming, USA; Matt W. Murdock, CEO; hereinafter "Raven"), a US company that will produce renewable fuel from municipal solid waste, signed a memorandum of agreement on the supply of sustainable aviation fuel (hereinafter "SAF") to All Nippon Airways Co., Ltd. (Headquartered in Minato-ku, Tokyo; Shinichi Inoue, President; hereinafter "ANA").

In August 2021, ITOCHU invested in Raven SR and the two companies have maintained a strong partnership, with plans for commercial production and sales of renewable fuels worldwide. Raven SR, whose patented steam/CO₂ reforming technology for converting various types of local waste, such as green waste, municipal solid waste, organic waste and methane from municipal solid waste, into clean fuels including hydrogen and SAF is set to begin commercial production of hydrogen plant in early 2024. This non-combustion technology offers a sustainable solution for the reliable long-term production of renewable fuels. By utilizing local and regional waste, Raven SR's distributive model produces fuels closer to market demand, leading to greater decarbonization and addressing environmental issues caused by waste in specific regions.

Raven SR plans to begin commercial production of SAF by 2025 in California, USA, and expects to expand its production to 200,000 tons per year by 2034 in the USA and Europe. The supply of SAF to ANA which has extensive flight networks will significantly contribute to achieving the Civil Aviation Bureau of the Ministry of Land, Infrastructure, Transport and Tourism’s goal of replacing 10% of all aviation fuels with SAF by 2030.

The General Assembly of the International Civil Aviation Organization (ICAO) has set the goal of achieving net zero CO₂ emissions from aircraft by 2050. To meet this target, the airline industry will be required to reduce or offset 15% of its emissions from the 2019 levels starting in 2024. As the trend towards the decarbonization of the airline industry continues to gain momentum, it is expected that the demand for sustainable aviation fuels (SAF) will also increase in Japan.

The supply of sustainable aviation fuel (SAF) is currently approximately 0.03% of total jet fuel consumption and diversification of raw materials is essential as SAF production expands in the future. Raven SR's use of waste as feedstock for its SAF production is expected to stabilize both the supply and price of SAF.

ITOCHU will continue to contribute to the realization of a recycling-oriented society as well as the SDGs through the stable supply of SAF to leading airlines in Japan. READ MORE