ENEOS Corporation (“ENEOS”), the energy business unit of the ENEOS Group, is working with several companies and the governments to refine sustainable aviation fuel (SAF) from used cooking oil. This initiative is a quite new to reduce greenhouse gas emissions.

Since 2023, ENEOS has been implementing the project to produce from used cooking oil to sustainable aviation fuel (SAF).

Under the project, used cooking oil collected from restaurants and other facilities will be refined as raw materials at SAF production plant that ENEOS is building in Wakayama Prefecture.

ENEOS regards both the social issues (included resolution of climate change) and the promotion of sustainable development as the management priorities and implements measures to reduce greenhouse gas (GHG) emissions, such as introducing green electricity produced from renewable energy and afforestation in Japan and overseas. ENEOS has set the target of reducing our GHG emissions by 46% by fiscal 2030* and achieving net zero emissions by fiscal 2040.
* Compared with the fiscal 2013 level

“When we started, we hadn’t almost had the connections with non-households emitted used cooking oil, such as restaurants. In addition, we didn’t have know-how to handle with used cooking oil,” says Yoshiki Hiromoto from Biofuel Group 2 at ENEOS’s Biofuel Business Department. “Therefore, we made the decision to be partnered with Yoshikawa Yushi, a company specializing in the collection of used cooking oil, and Nomura Jimusho, a trading company, to build relationships with restaurants and other relevant non-households and create a reliable supply chain.”

The way to refine SAF from used cooking oil that ENEOS intends to deploy is already very common for commercial production plant around the world. However, there seem to be quantitative constraints on the method, which ENEOS recognizes.

“It is true that we face with the challenges of quantities,” Hiromoto explains. “Used cooking oil available in Japan amounts to around 500,000 tons per year. If we launched the full operation the SAF production plant in Wakayama, we would need to collect whole Japanese used cooking oil. This isn’t realistic, of course, and, if we consider about the population reduction of Japan in the near future, it is difficult to expect the amount of used cooking oil available is going to increase.”

There are different ways to deal with used cooking oil generally, depending on whether it is collected at non-households (like a restraint and hotels) or households. While we usually dispose cooking oil, that produced by non-households is collected almost in its entirety and is recycled, primarily for use as feed for pigs and cows. Any plan to use large amounts of used cooking oil to produce SAF could therefore affect the conventional supply and demand balance, as well as the price. For this reason, ENEOS has focused on the second largest use: exports. Used cooking oil exported from Japan is actually already being used to produce SAF and biodiesel fuels in destination countries.

“This is why we want to ensure that the used cooking oil produced in Japan is used domestically as much as possible,” says Hiromoto. “Our idea is to divert those amounts that are intended for export. Going forward, we also intend to bring the project to full scale by addressing used household cooking oil as well. We plan to establish collection sites together with local governments and other entities.”

Last year, the Tokyo Metropolitan Government’s Bureau of Environment called for proposals for a subsidy program on the collection of used household cooking oil, and ENEOS and Seven & i Holdings jointly submitted a proposal, which was successfully adopted. Used household cooking oil is now being collected at 13 Ito-Yokado stores in Tokyo as of May 2024, with plans under discussion to add convenience stores to the collection network.

The recycling of cooking oil for this purpose began when the reduction of GHG emissions became a major issue for society. But used cooking oil has long been the main raw material used to produce SAF around the world.

So why have Japanese oil companies been unwilling to recycle cooking oil? Two of the major reasons are that SAF is expensive to produce and that the market is not large enough to support mass production and mass transportation.

In such a situation, what made ENEOS decide to produce SAF from used cooking oil? “The reason is that there is a global move toward carbon neutrality in the aviation sector,” explains Hiromoto. “Even in Japan, a public-private council for the wider use of SAF that consists of representatives of the oil industry and relevant government offices has set forth a policy to replace 10% of the aviation fuels supplied by oil companies with SAF by 2030. This suggests that the use of SAF will likely become mandatory in the future. With this in mind, we have to be ready to supply SAF made from cooking oil by 2030. This is partly for compliance with regulations, but also to keep up with global trends amid shrinking domestic demand due to the declining population. We also want to establish an additional business segment that will be able to offset potential future revenue declines. This is the thinking behind our policy.”

ENEOS is building an integrated system for SAF, from raw materials procurement to in-house manufacturing, and sales The ongoing initiative is the first stage of this new challenge. As to plans to increase the amount of used cooking oil available, Hiromoto emphasizes that ENEOS intends to formulate various collection scenarios for used household cooking oil and will perform field trials aimed to social implementation.

“Additionally, we have been introduced to retail stores, restaurants, and other places connected with Suntory. This benefits both companies because naphtha, a raw material used to make plastic bottles, is produced as a by-product of the SAF production process. We are taking on the challenge of reducing GHG emissions through such joint initiatives with other companies.”