Astomos Energy concluded a capital and business alliance with Tromso, a company based in Innoshima, Hiroshima Prefecture. The company aims to expand in Southeast Asia by making a full-fledged foray into the business of creating its own carbon credits as a measure to combat climate change.

In January 2024, Astomos Energy invested in Tromso, a company based in Innoshima, Hiroshima Prefecture that manufactures/sells machinery to upcycle agricultural and livestock residues into valuable resources (fuel, fertilizer, biomass materials, etc.), and announced a capital and business alliance with that company aimed at launching businesses that help generate carbon credits and reduce environmental impact inside and outside Japan. Yoko Higashi of Astomos Energy’s Green Business Development Office explained the background behind the partnership:
“As climate change measures take off around the world, our goal is to convert low-carbon LPG itself to bio-LPG to make it even greener. However, it is also true that it will take time to realize this. We have decided that one way of making that transition is to deliver LPG with carbon credits added on. We hope to use this preliminary approach to buy more time, connecting it to bio-LPG in future.”
Carbon credits are a mechanism whereby greenhouse gas (carbon) emissions are credited as emissions rights and emissions reductions can be traded among companies and offset by emissions reduction allowances. Carbon credits include credits for renewable energy sources such as solar power generation and for carbon dioxide absorption through forest management. This is Astomos Energy’s first time embarking on a carbon credit creation project. As this is ultimately an area similar to bio-LPG in that agricultural and livestock residues are handled, the company will also be seeking out materials that can be used for bio-LPG in the future.

Astomos Energy’s capital and business partner Tromso in 1994 began manufacturing "grind mills," machines that convert rice husks, difficult to recycle as a resource, into solid fuel utilizing the technical capabilities of the local shipbuilding industry in Innoshima. Ms. Higashi explains the reasoning behind the business tie-up:
“What makes rice husks so difficult to recycle is that, being silicon-rich, their major inorganic constituent is silica, used in familiar items such as studless tires. It is used in tires because rigid and strong enough to ensure excellent traction. The drawback to this is that grinding rice husks wears out the machinery. We thus saw great value in Tromso’s technologies for converting such rice husks into biomass as well as in its overseas network and the outcomes of its demonstration testing.”

Tromso not only grinds and solidifies hard rice husks but also transforms them into biochar and activated carbon, and it is engaged as well in the water purification business to add value to the final product. Tromso is expanding its efforts around the world, most notably Africa, Asia, and Australia, by converting not only rice husks but also regional residues such as almond shells and coffee husks into valuable resources. The company has been selected as one of Hiroshima Prefecture’s "Unicorn 10" and it exhibited in the Japan Pavilion at COP28.

Astomos Energy intends to use this capital and business alliance as a springboard for launching a carbon credit generation business in Cambodia.
“At present, large amounts of firewood are being fed into the boilers of factories in Cambodia. Because of the long rainy season, however, firewood with very high moisture content is used, resulting in low combustion efficiency, so we are hoping to have these factories utilize solidified rice husks instead. We will thus be starting out by ensuring that precious forests do not have to be cut down. Nevertheless, converting one form of biomass to another for generating credits is difficult in some regards, and we believe the first hurdle will be overcoming this difficulty," commented Ms. Higashi.
In addition, Ms. Higashi hopes to get this business off the ground over the next three to five years by conducting local market research, negotiating with the government, cooperating with NGOs, and testing samples.
“The main industry in Cambodia is garment-related sewing factories. They are responsible for the final processes that do not require advanced technical skills but that do need lots of manpower. The problem is that such factories use boilers and burn a lot of wood for ironing. Japanese companies also use these factories. Cambodia is currently designated a Least Developed Country (LDC) so no tariffs are applicable. The country is being urged to graduate from LDC status, though, and the challenge is making Cambodia low-carbon while capitalizing on its core industries. We cannot rely on solar power generation because of the long rainy season and these industries cannot afford extra costs. Even the government is struggling with this."

Astomos Energy will be giving due consideration to such local government needs as it takes on this carbon credit creation project. The energy industry has often faced the brunt of dealing climate change issues, but what is the situation at present?
“A total ban on gas boilers was considered at one point in Europe but, since that would put many people out of work, countries are beginning to lower their targets. Most of the topics discussed at environmental conferences held in Europe nowadays are technical issues such as bio-LPG. While low-carbon approaches and bio-fuels are gaining momentum in developed countries, most developing countries still use firewood, and it is said that they could make considerable progress in lowering their carbon footprints if they were just to move to LPG.”

At the moment, the energy industry produces a negligible amount of bio-LPG, and the high cost of doing so has companies working on research and development. It is no easy task to find a green way of synthesizing LPG from raw materials such as biomass that are not derived from fossil fuels.
Astomos Energy aims through this capital and business alliance to create carbon credits and add them to the LPG it sells through Tromso's expertise in agricultural residue upcycling technology and access to emerging countries. As Ms. Higashi points out:
“We are still providing LPG as a low-carbon fuel, and we intend to take on the challenges of both bio-fuels and carbon-credit creation for even greater greenification. At the same time, we hope to create a system that can help address social issues in Cambodia and other less developed countries. We remain committed to doing our part to resolve social issues as a behind-the-scenes player in infrastructure.”