ITOCHU : announces conclusion of sales contract of Neste-produced sustainable aviation fuel with ETIHAD Airways

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Keita Ishii, President & COO; hereinafter "ITOCHU") announced today that it has concluded a sales contract of sustainable aviation fuel (hereinafter "SAF") produced by Neste OYJ (headquartered in Finland; Matti Lehmus, President and CEO; hereinafter "Neste") with Etihad Airways PJSC (headquartered in UAE, Tony Douglas, President and CEO, hereinafter "ETIHAD Airways"), the national airline of United Arab Emirates (UAE). Under this contract, ITOCHU supplies SAF to an overseas airline at a domestic airport for the first time in Japan.

In December 2021, the Japanese government announced the target of "replacing 10 percent of jet fuels consumed by Japanese airlines with SAF by 2030," aiming to achieve carbon neutrality of the aviation industry. In addition, the obligation to reduce CO₂ emissions under CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) will become effective in 2027 onwards. Therefore, it is important to establish a stable SAF supply chain at Japanese airports, which will lead overseas airlines to select Japanese airports as their service airports and will help Japanese airports to increase their international presence. For that sake, it is imperative to procure SAF from overseas immediately for Japanese and overseas airlines in Japan as a short-term solution, in parallel with securing SAF out of domestic SAF production projects as a long-term solution,.

Based on the foresaid circumstance, ITOCHU has been working to establish a stable SAF supply chain in Japan, e.g., setting up a domestic supply chain ranging from SAF import and quality management to the SAF delivery up to airports in cooperation with ALL NIPPON AIRWAYS CO., LTD. and Neste in 2020^*1, and expanding partnership with Neste to grow SAF availability in Japan in February 2022.^*2 Now, by extending the supply chain up to aircrafts, we will start SAF supply to overseas airlines that do not possess fuel supply infrastructure such as fuel tanks at Japanese airports .

ETIHAD Airways has established the minimum targets, "Reduce 2019 net emissions by 50% by 2035," and "Net zero emissions by 2050" as part of its initiatives for achieving carbon neutrality. ETIHAD Airways runs comprehensive cross-organizational sustainability program, and is recognized as one of the world's leading airlines for aviation decarbonization. As an airline with a worldwide service network, ETIHAD Airways recognize the importance of using SAF for regular flights departing from Japan, and this time it will be the first overseas airline that procures SAF in Japan. We will supply SAF to ETIHAD Airways at Narita International Airport on into-plane basis from June 2022 onwards.

Neste is expanding its SAF business globally as the world's leading producer of renewable fuel. Following the completion of the Singapore refinery expansion and modification to the Rotterdam refinery, its global annual production capacity will be over 1.5 million tons per year by the end of 2023. Based on the partnership, ITOCHU and Neste are working together to achieve stable SAF supply in Japan.

ITOCHU has included "Enhancing Our Contribution to and Engagement with the SDGs through Business Activities" in the basic policies in its medium-term management plan. By increasing the market prevalence of renewable fuels in cooperation with leading partners, we will continue to contribute to the realization of a recycling-oriented society.

Message from Thorsten Lange, Executive Vice President, Renewable Aviation, Neste

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Message from Tony Douglas, CEO, ETIHAD Airways

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Photogragph of Press conference