ITOCHU : Announces Expansion of Domestic Operation of Renewable Resources-Based Fuel Business in Land Transportation

ITOCHU Announces Expansion of Domestic Operation of Renewable Resources-Based Fuel Business in Land Transportation

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Keita Ishii, President & COO; hereinafter "ITOCHU") announced today that it has started operating Japan's first(*1) renewable diesel (RD) fueling station for commercial delivery vehicles, in cooperation with ITOCHU ENEX Co., Ltd. (headquartered in Chiyoda-ku, Tokyo; Kenji Okada, President & Chief Executive Officer; hereinafter "ITOCHU ENEX") and Tohbu Network Co., Ltd. (headquartered in Yokohama-shi, Kanagawa; Yoshitaka Wakayama, President & Representative Director; hereinafter "Tohbu Network"). ITOCHU is viewing this project as an opportunity to make a full-scale entry into the renewable resources-based fuel (hereinafter, "renewable fuels") business in land transportation, aiming to achieve a circular economy and a carbon-free society.

For this project, ITOCHU has concluded an RD import contract for its use in Japan with Neste OYJ (headquartered in Finland; Peter Vanacker, CEO; hereinafter "NESTE"), one of the world's largest renewable fuel producers. ITOCHU ENEX has built a series of supply chains related to RD transportation and fueling in Japan. While RD has been delivered to customers for fueling their vehicles, a fueling station has commenced operation using an underground tank at Tohbu Network's office in Ebina-shi, Kanagawa. This has enabled companies with factories or distribution facilities in the surrounding area to fuel their vehicles directly at the station. Thus, the project permits more companies to use RD, which enables them to reduce GHG emissions in land transportation. It is the first RD fueling station to be established in Japan.

NESTE's RD, which is sold at the station, is produced by using waste oil and animal oil, which do not have competitor foods, as raw materials and realizes an approximately 90% reduction of GHG emissions compared with the petroleum-based light oil on a life-cycle assessment basis. RD is fully compatible with all diesel engines and an excellent solution for example for cargo trucks and buses. As a "drop-in" fuel that can be used without modifying the existing vehicle/fueling-related facilities, RD has already been commonly used mainly in Europe and the US. While measures involving the use of EVs and FCVs have been considered in projects for decarbonization in the transportation industry, it is likely to be considerable time before they are used in society. The use of RD, which can help reduce GHG emissions immediately, is attracting attention from diverse companies possessing commercial delivery vehicles. The establishment of the fueling station responds to this demand.

An earlier RD-related project in Japan was launched in June this year at FamilyMart Co., Ltd., which began to use RD for delivery vehicles for convenience stores for the first time in Japan (*2). The use RD has been expanded to vehicles for domestic container drayage by A.P. Møller - Mærsk A/S and use by San-Ai Oil Co., Ltd. for its facility-related vehicles at Haneda Airport. RD is expected to be used even more widely in land transportation as a next-generation renewable energy that not only minimizes the introduction cost related to decarbonization measures but also makes a major contribution to reducing GHG emissions.

ITOCHU has set "Contribute to and strengthen initiatives for the SDGs" as one of the Basic Policies in its medium-term management plan and will continue to work to introduce renewable fuels in Japan and Asian markets to solve issues for the realization of a circular economy, a carbon-free society, and a sustainable society.

Ebina Office of Tohbu Network Co., Ltc.