In order to accelerate the adoption of synthetic fuels and sustainable aviation fuel (SAF), the government has been introducing a series of new policies, prompting the oil industry to take action to meet the expanding demand. Synthetic fuels, often referred to as “artificial crude oil,” are produced by combining carbon dioxide and hydrogen, while SAF is derived from plants and waste oil. Along with critical challenges such as securing stable raw material supply and building a robust distribution network, strategic initiatives like facility reorganization and streamlining production capabilities according to demand are of utmost importance.

Amidst the rapid growth in demand for synthetic fuels and SAF driven by Japan’s new government policies, the oil industry is actively pursuing proactive measures. As gasoline consumption declines, expectations for synthetic fuels have been on the rise. Major players in the Japanese petroleum industry, such as Idemitsu Kosan, welcome the expedited commercialization goals for synthetic fuels and highlight the significance of addressing key challenges such as procurement and supply chain development for hydrogen, as well as establishing evaluation rules for decarbonization value.

Similarly, ENEO, another leading company in the industry, is advancing plans to establish domestic production technology for synthetic fuels and progressively introduce synthetic fuels, biofuels, and low-carbon gasoline. Idemitsu is strategically incorporating CO2 supply and synthetic fuel imports into overseas projects while also considering the production of domestically sourced synthetic fuels at refineries in Hokkaido in the future.

Furthermore, the government has mandated that by 2030, 10% of domestic aviation fuel must be SAF. Consequently, companies like Cosmo Oil and ENEO are actively promoting the construction of mass production plants and domestic supply chain development.

These plans signify a transformation of refineries into decarbonization hubs, and companies are striving to optimize their production capabilities by assessing existing demand and monitoring trends in the next-generation fuel market.