ENEOS eyes e-fuels supply from HIF's portfolio; e-fuels plants in Japan

Japan's largest refiner ENEOS said Oct. 4 it agreed to explore supplying e-fuels originating from synthetic fuels producer HIF Global's portfolios in South America, the US and Australia to Japan.

Under the agreement, ENEOS and HIF Global also intend to explore the establishment of a CO2 supply chain from Japan and the potential development of production facilities in Japan for the conversion of e-methanol from HIF's plants to e-gasoline or jet fuel.

"We believe this collaboration with HIF, which aims to become the world's largest e-Fuel producer, will also serve as a basis for leading energy transition and continue to support energy supply in Japan," ENEOS' senior vice president Kotaro Sunaga said in a statement.

ENEOS' latest move came as its parent ENEOS Holdings aims to halve its carbon intensity in terms of its Scope 1, Scope 2 and Scope 3 greenhouse gas emissions to 44 g-CO2/MJ by fiscal year 2040-2041 (April-March) from 87 g-CO2/MJ in FY 2025-26 as part of its carbon neutrality road map set in May.

ENEOS Holdings mapped out its action plans to cut the carbon intensity in its energy segment in phases from boosting its supply of CO2-free hydrogen, sustainable aviation fuel and renewable energy as well as providing carbon capture and storage.

ENEOS Holdings expects to make investment decisions in fiscal year 2025-2026 (April-March) to start 250,000 mt/year of hydrogen supply from multiple projects.

The company, which currently fulfills roughly half of domestic oil products demand with a combined 1.74 million b/d refining capacity in Japan, plans to start up its first 300,000-mt/year SAF production unit from around the second half of 2026, Sunaga said in an interview with S&P Global Commodity Insights in July.

"The first unit to use HEFA [hydroprocessed esters and fatty acids] produced from used cooking oil," he said, adding that the company was proceeding with securing HEFA feedstocks.

While exploring options for ensuing SAF production units, Sunaga said the company was "considering investing in companies handling alcohol to jet technology."

Either way, ENEOS Holdings expects the need of importing SAF in the initial phase of introduction, having established its import capability at its facilities, Sunaga said.

Idemitsu partnership

ENEOS' cooperation agreement with HIF came after Idemitsu Kosan, the second largest Japanese refiner, said in April it had signed a strategic partnership with HIF, under which Idemitsu aims to develop e-fuels supply chains of several hundreds of thousands kiloliters per year in Japan by the second half of the 2020s.

The move marks an advancement of Idemitsu's earlier plan to develop an e-fuels business model, including domestic e-fuels production in Hokkaido, where it has the 150,000 b/d refinery in northern Japan, by 2030.

Following the strategic cooperation agreement with HIF, Idemitsu said then it will consider procuring e-fuels from abroad for its domestic supply; jointly consider investing in e-fuels production facilities in Japan and abroad; utilizing captured CO2 in Japan as feedstocks for e-fuels production overseas.

The strategic partnership with HIF comes as Idemitsu intends to produce 150,000 b/d of e-fuels from its global facilities under its 2030 vision, under which it plans to start the construction of the Matagorda e-fuels facility in Texas in 2024.

Following HIF Global's start of synthetic fuels production at its Haru Oni demonstration facility in Magallanes, Chile in December 2022, the Matagorda e-fuels facility expects to produce about 200 million gal/year (750 million liters/year) of carbon-neutral gasoline by 2027.

It is also developing a pipeline of projects to produce 36,000 b/d of e-fuels in Australia by 2030.

The move by Idemitsu and ENEOS comes as Japan aims to establish a highly efficient and massive production technology of e-fuels by 2030 in order to commercialize it by 2040 after going through the introduction, expansion and cost reduction phase in the 2030s, according to the Ministry of Economy, Trade and Industry.