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CHAPTER 5. |
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Market Structure of Biofuels |
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5.1 Domestic Market (manufacture and circulation of Biofuels) |
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The production and sale of bio-ethanol in Japan is not yet a nationwide commercial business. However, the sale of gasoline mixed with ETBE began in 2007 with 50 gas stations in metropolitan areas selling the product. Efforts are being made to increase the use of biodiesel fuel in both the public and private sectors. |
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5.1.1 Bio-ethanol |
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Currently many projects have plans to make use of bio-ethanol in the future; however at this stage bio-ethanol is not commonly used by most businesses.
In 2007, ten government-backed experiments involving the growing of raw materials, manufacturing bio-ethanol and using E3 gasoline for vehicle were known to be taking place throughout the country.
Three examples of the manufacturing of bio-ethanol are shown below: |
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Table 5.1 Bio-ethanol manufacturing example |
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| Operating body |
Asahi Breweries, Ltd.
National Agriculture and Food Research Organization
National Agricultural Research Center for Kyushu Okinawa Region |
Location |
Iejima, Okinawa |
| Method |
Ethanol is cost-effectively produced from high-biomass sugarcane while maintaining the conventional raw sugar production quantity at the same time. |
| Operation begins |
January, 2006 |
| Funded by |
Construction cost : 3.7 billion yen
(A project funded by Ministry of the Environment) |
Feedstock |
High biomass sugarcane and molasses |
| Feedstock cost |
Cultivated on a 50-are farmland. |
Feedstock quantity |
30 tons/year |
| Produced fuel type |
Ethanol and ethanol-blended gasoline |
Manufacturing capacity |
1,125L/year
(Cane crusher capacity 600kg/h)r |
| Production flow and Facility overview |
･Crops such as high biomass sugarcane are experimentally cultivated on an approximately 50-are land. Then the harvested crops are studied, the productivity of breeding lines are evaluated and the breeding line candidates are selected.
･Bio-ethanol is blended to gasoline at the co-located E3-gasoline plant to produce 3%-ethanol blended gasoline which is used by 63 official vehicles owned by the Iemura town office.
･Bagasse, a byproduct of sugar production, is used as heat source for sugar and ethanol production. Surplus bagasse is used as animal beddings which are eventually composted at the town’s compost facility to produce fertilizer for cultivation of leaf tobacco or other crops.
(Outline of manufacturing process)
(Scheme of entire project)
【 Source: The Ministry of Agriculture, Forestry and Fisheries 】 |
| Facility specification |
Sugar production and experimental ethanol production using cultivated high-biomass sugarcane will be carried out at a pilot plant constructed in Iejima, capable of processing 30 tons of sugarcane a year. (The plan is to harvest 30 tons of sugarcane from a 50-are land annually and to manufacture 2 tons of sugar and approximately 1kL of bio-ethanol.) |
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Table 5.2 Bio-ethanol manufacturing example 1 |
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| Operating body |
Bio-ethanol Japan Kansai |
Location |
Nishi-ku, Sakai City,
Osaka Prefecture |
| Joint Project Members |
Taisei Corporation, Daiei Inter Nature Inc., Tokyo Board Industries, Co., Ltd.,
Marubeni Corporation, and Sapporo Breweries Ltd. |
| Method |
Ethanol conversion technique using fermentation process by special microorganism, imported from the U.S. by Marubeni Corporation and Tsukishima Kikai Ltd., are introduced. |
| Production begins |
January, 2007 |
| Funded by |
Construction cost : 3.7 billion yen
(A project funded by Ministry of the Environment) |
Feedstock |
Wood-based biomass (such as construction waste, wood chips, and pruned branches), paper waste and food residue (such as tofu residues) |
| Feedstock cost |
By inverse onerous contract |
Feedstock quantity |
40,000 to 50,000 tons/year (construction waste in the first year) |
| Produced fuel type |
Fuel ethanol (gasoline additive)
Fuel retail starting from the Tokyo and Osaka metropolitan areas. |
Manufacturing capacity |
First year 1,400kL/year
After capacity is expanded 4,000kL/year |
| Production flow and Facility overview |
Production Flow
Accepted wood wastes are saccharified by hydrolysis process using dilute sulfuric acid, and then sent to the ethanol fermentation process. Wood materials unsuitable for ethanol production are chipped and used for power generation boilers. Residues generated from manufacturing process are pelletized for biomass solid fuel.
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| Facility specification |
Device types: Crushing machine, fermentation device, boiler facilities, and power generator
Device capacity :
Lot size : Approximately 15,000m2
Crushing device : capacity 180 tons/day
Fermentation device : capacity 82 tons/day
Boiler : capacity 86 tons/day
Power generator: capacity 1,900kw |
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1 Bioethanol Japan (Kansai) Ltd. HP; http://www.bio-ethanol.co.jp/index.php |
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Table 5.3 Bio-ethanol manufacturing example |
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| Operating body |
Mitsui Engineering & Shipbuilding Co., Ltd. |
Location |
Maniwa City, Okayama |
| Method |
To produce bio-ethanol, wood-based biomass is converted into sugar, fermented with yeast developed by VVT (Finland), and refined. |
| Operation begins |
June, 2005 |
| Funded by |
Ministry of Agriculture, Forestry and Fisheries, Ministry of Economy, Trade and Industry, Ministry of the Environment, and the Cabinet Office |
Feedstock |
High biomass sugarcane and molasses |
| Feedstock cost |
(provided by Okayama Prefectural Gov.) |
Feedstock Quantity |
Windfall trees 120 tons/year,
Sawmill residues 50 tons/year,
Total 170 tons/year |
| Product |
Bio-ethanol |
Manufacturing capacity |
315L/day |
| System flow and facilities externals |
・ Wood-based biomass, derived from untapped forest resources, is converted into sugar, fermented with yeast developed by VVT (Finland), and refined to ethanol.
・ The refined ethanol is dehydrated by osmotic pressure using zeolite film made of silicate composed of silicon, aluminum, sodium, and oxygen.
・ The produced dehydrated ethanol is used for test drive of E3-fueled vehicles in the project (Green Bio Project) conducted by the Okayama prefectural government (Department of Agriculture, Forestry, and Fisheries).
In the Green Bio Project, 3%-ethanol is mixed to gasoline at the refinery in Okayama and, at the specialized fuel-filling facility, a remodeled Maniwa Nokyo Katsuyama station, the ethanol-blended gasoline is fueled to official vehicles of Maniwa City and Okayama prefectural government’s Maniwa branch office.
Plant overview
Source: Maniwa City Bulletin August 2005 |
| Facilities specification |
Biomass processing capacity : Maximum of 2 tons/day (50% of rate of include water) |
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In addition, there was a demonstration experiment conducted by Tsukishima Kikai Co., Ltd., in which ethanol is produced from wood-based biomass at a pilot plant in Chiba prefecture and other bio-ethanol production projects and research projects on potential for the ethanol commercialization are currently being conducted in various areas in Japan.
In fiscal year 2007, seven bio-ethanol-related research projects were selected as “Demonstration experiment project for utilizing biomass and other energy resources” funded by the regional bureaus of economy
and industry. 2
Only around 30 kiloliters of bio-ethanol was produced in the 2005 fiscal year. |
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Under the instruction of the Environment Ministry, Osaka prefecture recently began selling E3 gasoline (gasoline blended with 3% bio-ethanol). This fuel is sold in the Osaka metropolitan area. The quality of the fuel sold is checked thoroughly for quality standards at each stage during the process from raw material to sale, and is sold at registered gas stations.3 |
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2 Bureau of Economy, Trade and Industry, Research project for Biomass and Other Untapped Energy Project, list, 2007
3 Ministry of the Environment, press release, October 4th 2007 http://www.env.go.jp/press/press.php?serial=8874
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5.1.2 ETBE |
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ETBE is synthesized by mixing ethanol and isobutene. The petrochemical industry utilizes the raw materials used to create isobutylene almost entirely, meaning that there is almost no excess for use in the manufacture of ETBE. Therefore the 630,000 tons of isobutylene by-product generated by the oil refinement industry is considered to be the upper boundary of available supplies in Japan. About 1.08 million tons of ETBE can be manufactured from this amount of isobutylene, requiring 620,000kL of ethanol.4
The petroleum industry is currently committed to increasing the use of bio-gasoline (gasoline mixed with ETBE) through a government project run by the Ministry of Economy, Trade and Industry aimed at introducing fuel that originates from biomass. Bio-gasoline was introduced to 50 metropolitan areas (Tokyo, Kanagawa prefecture, Saitama prefecture and Chiba prefecture) from April 27th 2007. |
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4 Conference to Promote Utilization of Eco-fuels, Third reference material of the Report on the Diffusion of Eco-fuels for Transportation Purpose, May 2006.
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5.1.3 Biodiesel Fuel |
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Various municipalities, used cooking disposal contractor, non-profit organizations etc. were confirmed to be producing biodiesel fuel (BDF) in 2005, operating 88 plants.
Although most production facilities in current operation are relatively small, large-scale production facilities are currently operating next to a used cooking oil plant in Kyoto City (production scale 5kL/day)5, and production levels are steadily increasing. |
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5 Conference to Promote Utilization of Eco-fuels, material from the 5th Conference for the Promotion of Eco-fuel Use : ‘Japan’s current use of eco-fuel for transportation’, February 2007. |
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Table 5.4 Outline of the Main BDF Manufacturing Facilities in Japan5 |
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| Operator |
Trust Planning Ltd. |
Shiogama City Fisheries Industrial Estate |
Toyama BDF Ltd. |
Plenus Ltd. |
| Plant Location |
Fukushima Prefecture,
Iwaki City |
Miyagi Prefecture, Shiogama city |
Toyama Prefecture, Toyama city |
Fukuoka Prefecture, Fukuoka City |
| Start of Operations |
August 2004 (equipment upgraded in 2005) |
April 2006 |
November 2006 |
January 2007 (scheduled) |
| Scale of production |
100kL/month (equipment can produce 10kL/day) |
36kL/month (equipment can produce 2.4kL/8hours) |
80kL/month (equipment can produce 3.8kL/day) |
150kL/month |
| Procurement of Raw Materials |
Used cooking oil is collected from homes, at supermarkets, restaurants and food factories or purchased from private collection companies. |
40kL/month of used cooking oil is collected from 30 fish processing in the city. |
Used cooking oil is collected from supermarkets, school lunch centers, food factories etc. in Toyama Prefecture and surrounding prefectures. |
Used cooking oil generated from about 930 Plenus boxed lunch stores and restaurants is collected. |
| BDF use |
Used in Iwaki City in vehicles owned by public corporations aimed at reducing pollution. Vehicles include fork-lift trucks and backhoes. |
Used by registered persons and companies (union members, official city cars, garbage trucks etc.). |
Used by Toyama city official vehicles and local corporations (supplied by plant refueling equipment next to the plant/ tanks). |
Fuels Plenus delivery vehicles using refueling equipment next to the plant. |
| Outline of business |
Used cooking oil is collected at a collection bases collecting cooking oil from whole urban areas; ‘Iwaki Oil Recycling Network’. BDF and soap are manufactured and sold. |
The ‘Shiogama Global Eco-city Promotion conference’ was held to establish production of BDF. The plant uses a large amount of oil generated from the processing of marine products, a key industry of the city. |
The plant is located in an industrial area with various recycling facilities. The drains and coarse glycerin as by-product used as materials for methane fermentation. |
Plenus Ltd. Constructed the network collecting used cooking oil from the boxed lunch businesses ‘HokkaHoka Tei’ and ‘Yayoi Ken’ (located in Kyushu and Yamaguchi) and was manufacturing BDF. |
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In addition, the current Nanohana (rape blossom) Project involves growing rape blossom on unused farmland and rice fields to create the raw material necessary for the production of biodiesel fuel. Colza oil (used as cooking oil) is produced and sold, and the used oil is collected and converted to biodiesel fuel. This scheme is currently running in around 150 places throughout Japan. 6 |
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6 Forest Environmental Society, Forest Environment, February 2008 |
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Figure 5.1 Conceptual Diagram of Nanohana Project7 |
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Sunflowers are currently cultivated for the production of biodiesel fuel on unused farmland in Ibaraki prefecture Tsukuba city and in Ehime prefecture Imabari city. Tsukuba city has also been working on cultivation in Thailand to secure a stable supply of feedstock.7
Non-profit organizations (NPOs) are also producing biodiesel fuel on a small scale in various regions in addition to the various municipalities and private enterprises. The total production of biodiesel is estimated at 4-5000kL per year.
Cases in which biodiesel fuel is sold at gas stations are few, and users generally buy the fuel directly from a producer or make it themselves 8. A case study can be seen below. |
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7 Rape Blossom Project Network homepage: http://www.nanohana.gr.jp/index.php
8 Economic and Social Research Institute, Cabinet Office、Research for the overhaul of technical information which contributes to the overall economy, energy and environmental analysis report, December 2007
http://www.esri.go.jp/jp/archive/hou/hou040/hou031.html |
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| Case study |
Biodiesel fuel production and sales |
| Subject |
Aburatou Commercial Firm Ltd. |
| Start of production |
2002 |
| Business outline |
Used cooking oil is collected at a gas station in Shiga prefecture, Inukami-gun Toyosato-cho.
Biodiesel fuel is then manufactured and mixed with gasoline to 20% (B20). |
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| Characteristics |
The company owns both the gas station and biodiesel production facilities and collects used cooking oil from customers at the gas station. The production capacity is 100L per day. B20 fuel is sold at the gas station as a general automotive fuel. As of Nov 2005, the price of B20-blended gasoline was 5 yen per liter higher than normal diesel oil. Each time a customer purchases B20, they are issued with a certificate to show they have refueled with Biodiesel. Because fuel tax is paid for biodiesel fuel mixed with diesel oil, the company pays the tax to the Shiga Prefectural Government semiannually. The company also collects used cooking oil from the factory of Matsushita Electric Industrial Co., Ltd, converts it to BDF and supplies it as fuel for goods transportation to the same company. |
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5.2 Overseas Market (current fuel importation situation) |
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It would be impossible to achieve set targets for the use of bio-ethanol without importing an amount of ethanol. The petroleum industry is currently importing ETBE and various businesses are importing biodiesel fuel. |
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5.2.1 Bio-ethanol |
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As it is necessary to import ethanol in order to achieve set targets, it is important to establish a stable supply from abroad. It is said that a supply of 1.8 million kL could be possible after 2009, if ethanol stockpile is organized, marine transport ability is assured, and a long-term purchase is contracted. In order to secure stable ethanol import from Brazil, the early conclusion of a long-term purchase contract would be needed to avoid competition with other countries. 9 |
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9 Advisory committee of Surveillance study on the possibility of ethanol importation from Brazil (investigation by Ministry of Economy, Trade and Industry), Report from the investigation concerning the possibility of importing ethanol from Brazil, May, 2005. |
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5.2.2 ETBE |
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Most of about 630,000 tons of isobutene, which is by-product of the oil refinement industry, is used for private fuel, so it is necessary to find another source of raw material to increase production of ETBE.
Isobutene can also be created with the imported butane. However, a stable supply of imported butane is needed as well as new equipment of isomerization, dehydration and manufacturing ETBE.
ETBE has already been imported to Japan from other countries. Oil wholesale companies established the Japan Biofuels Supply LLP (JBSL) as a cooperative organization in January 2007. JBSL imported around 7,800kL of ETBE from France in April 2007, and around 7,900kL from the Netherlands in July of the same year.
In addition, the Marubeni Corporation has procured 6,500kL of ETBE from Copesul, a major Brazilian petrochemical manufacturer, and is supplying it to JBSL. |
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10 Press release from Japanbiofuels Supply LLP. April 6 2007. http://www.jbsl.jp/whatsnew/wn070406.html
11 Press release from Japan Biofuels Supply LLP. July 31 2007. http://www.jbsl.jp/press/press070731.html |
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5.2.3 Biodiesel fuel |
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Several companies currently import biodiesel fuel into Japan to supply biodiesel fuel of several thousand kL per month, but not all has been in smooth progression because of inflating palm oil prices. Table 5 shows the details.
In addition, Sun Care Fuels Ltd. are in the early stages of importing from Thailand high quality biodiesel manufactured from sunflower oil, from sunflower seeds harvested at farms owned by the company. This is a project which is under commission from the New Energy and Industrial Technology Development Organization (NEDO). Commercial manufacturing is expected to begin by the end of the 2008 fiscal year.5 |
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9 Advisory committee of Surveillance study on the possibility of ethanol importation from Brazil (investigation by Ministry of Economy, Trade and Industry), Report from the investigation concerning the possibility of importing ethanol from Brazil, May, 2005.
10 Press release from Japanbiofuels Supply LLP. April 6 2007. http://www.jbsl.jp/whatsnew/wn070406.html
10 Press release from Japan Biofuels Supply LLP. July 31 2007. http://www.jbsl.jp/press/press070731.html |
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Table 5.5 Outline of Main Biodiesel Importers |
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| Operating body |
Hatakeyama Oil |
Lloyd's Japan Ltd |
| Start |
June 2006 |
July 2006 |
| Scale of Import |
3,000kL/month |
2,000-3,000kL/month |
| Procurement of biodiesel fuel |
Biodiesel fuel manufactured from palm oil in Malaysia is imported. |
Biodiesel fuel manufactured from palm oil in Malaysia is imported. |
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Japanese
