JGC, Toyo Engineering sign alliance agreement for SAF plants in Japan

The March 30 signing ceremony, with Shoji Yamada, president of JGC Japan Corp. (left), and Haruo Nagamatsu, president and CEO of Toyo Engineering (Photo: JGC Holdings Corp.)

JGC Holdings Corp. announced recently that domestic engineering, procurement and construction (EPC) operating company JGC Japan Corp. and Toyo Engineering Corp. have signed an alliance agreement March 30 to pursue and execute orders for front-end engineering design (FEED) and EPC services for domestic sustainable aviation fuel (SAF) plants.

In response to global calls for greenhouse-gas reductions, in October the International Civil Aviation Organization adopted a long-term goal of net-zero CO2 emissions from the international aviation sector by 2050.

Meanwhile, in relatively recent updates adopted in ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation program, CO2-emission reduction in this sector by 2035 is being sought by mandating the use of SAF and purchases of emissions credits for the portion of emissions exceeding a baseline level (85 percent of 2019 emissions) as a short- to medium-term goal.

In Japan, a target based on the government’s Green Growth Strategy supporting carbon neutrality by 2050 seeks to replace 10 percent of jet fuel used by domestic airlines with SAF by 2030.

Domestic SAF demand is expected to grow significantly from almost 80 million gallons in 2025 to nearly 452 million gallons in 2030.

Currently, several companies—domestic oil refining companies and others—have tapped the government’s Green Innovation Fund and taken other steps to make steady progress in preparing to build domestic SAF plants using a variety of feedstocks including ethanol.

Many such plant-construction plans are likely to come to fruition from 2024 to 2027, in consideration of the Green Innovation Fund period, with large-scale investment on an overall scale of several hundred billion yen expected.

In SAF production, the JGC Group has wide-ranging expertise in production and supply planning as an operator, while the Toyo Group possesses knowledge and technology for production of SAF derived from synthesis gas using raw materials such as ethanol and woody biomass.

Both companies also have extensive construction experience for large oil refineries and chemical/petrochemical plants in Japan and overseas.

The alliance was founded on the expectation of even more compelling proposals, greater competitiveness and superior overall plant construction that combines each company’s strengths and enables collaboration on plans to construct SAF plants, from FEED to EPC services.

Following an alliance agreement on fuel-ammonia plants concluded in April 2022, the present agreement on domestic SAF will align the companies’ sales activities and project execution in SAF plant design and construction.

Through this alliance, the JGC Group and the Toyo Group will contribute to implementing client investment plans and working toward decarbonization in Japan.