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Japan consortium to meet all LPG demand with 'green LPG' by 2050

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Japan consortium to meet all LPG demand with 'green LPG' by 2050

Highlights

Japan expected to have 60% of current LPG demand in 2050

Starting up first carbon free LPG pilot plant by 2024

Domestic position, recognition key for carbon neutral LPG introduction

Japan's five major LPG importers aim to introduce 30,000 mt/year of carbon-free LPG in the early 2030s and replace their supply with "green LPG" to meet all LPG demand by 2050 under a newly formed consortium, senior executives said Oct. 20.

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Astomos Energy, ENEOS GLOBE, Gyxis, Japan Gas Energy and Iwatani have formed the Institute of Japan Green LP Gas Promotion aimed at introducing carbon free LPG through developing a series of synthetic technological process known as propanation and butanation in Japan, the executives told an online press briefing.

The move comes as the major importers have recognized a need to develop carbon free LPG as the Japanese government sees that 60% of the current domestic LPG will remain in 2050 because of its need various use in industry as well as feedstocks for chemical use, the executives said.

Japan's domestic LPG demand stood at about 13 million mt in fiscal year 2020-21 (April-March).

The Institute of Japan Green LP Gas Promotion intends to run a series of research and development projects starting in 2021 under which it first intends to build a 10 kg/day pilot plant of carbon free LPG by 2024.

It then aims to boost the production scale to 100 kg/day, or 30 mt/year, during the 2025-2030 second phase and expand it further to 10-100 mt/day, or 3,000 mt-30,000 mt/year per unit, during the 2030-2050 third phase, with an eye to meeting all LPG demand with "green LPG" by 2050.

Carbon neutral LPG

Japan's recent introduction of carbon neutral LPG sought by Astomos, Japan's top LPG supplier, is also seen a type of "green LPG" but it remains unclear whether this initiative will gather pace in the country.

"We see whether this gets widely extended will depend how carbon neutral LPG will be positioned and views by the government," Astomos President Tsuyoshi Ogasawara told the press briefing. Ogasawara is also chairman of the Institute of Japan Green LP Gas Promotion and the Japan LP Gas Association.

"We are still unsure whether verified [carbon credits for carbon neutral LPG] will be considered carbon neutral in Japan," Ogasawara said. "This issue involves with carbon pricing and carbon tax."

Further introduction of carbon neutral LPG will depend on how these situations will evolve forward, Ogasawara said.

Astomos in August received Japan's first carbon neutral LPG cargo of 47,000 mt at its Chiba import terminal from Shell, after having loading at Ruwais, Abu Dhabi.

Astomos Energy has also said it plans to start taking carbon neutral propane from the Ichthys project in Australia this year, following the signing of a sales and purchase agreement with INPEX Sept. 16.