Mitsubishi, Kirin to Build Ethanol Plant in Japan
Date: 20-Jun-07
Country: JAPAN
Author: Risa Maeda
A consortium formed by the two companies and unlisted Osaka-based Japan Chemical Engineering & Machinery Co. Ltd. has won a plant order for the project of some 6 billion yen (US$48.5 million), Mitsubishi Corp. said on Tuesday.
A Mitsubishi Corp. spokesman said the domestic ethanol business is one of its main areas of interest. Previously, Mitsubishi has imported plant-origin ethanol for industrial use, and in March took a 10 percent stake in an ethanol production company in Brazil.
The Japanese government has been promoting the usage of non-fossil auto fuel at home to combat climate change. In May, the Ministry of Agriculture said it would boost ethanol output from domestically grown farm produce to a total 31,000 kilolitres a year by subsidising three regional groups, including this project.
Hokkaido Union of Agriculture Co-operatives, a lead manager of the project, has said the government is expected to shoulder half of the cost of building the plant.
Construction will commence in October with production starting in March 2009, Mitsubishi Corp. said. The project, based in Shimizu town, central Hokkaido, is aimed at producing 15,000 kl of ethanol a year from excess sugar beet and low quality wheat grown in the surrounding fields as feed stocks.
A Kirin spokeswoman said the company plans to provide fermenting technology and other know-how to the project.
Kirin's move follows its rivals. Asahi Breweries Ltd., Japan's No.1 brewer, runs a government-backed plant to produce ethanol from sugar cane on Ie Island in Japan's southernmost prefecture of Okinawa.
Sapporo Holdings Ltd. in a joint venture with four other companies operates an ethanol plant in Osaka, using waste wood from construction sites as feed stocks.
But ethanol plants built so far and in the pipeline in Japan are small when compared with annual capacity of 50,000 to 500,000 kl a plant in the United States.
Japan, the world's second-largest gasoline consumer, using some 60 million kl a year, is almost totally dependent on oil imports, and last year produced only 30 kl of biomass ethanol at government-backed pilot plants.
(US$1=123.64 Yen)