News Releases 2021

Dec. 01, 2021

JGC Holdings will begin joint study of first green refinery project in Japan to utilize forest resources

- Aiming to realize reduction of carbon dioxide emissions, from raw material collection through to consumption -

JGC Holdings Corporation (Representative Director, Chairman and Chief Executive Officer: Masayuki Sato) announces that it has signed a basic agreement, effective November 30, with Taiyo Oil Company, Limited (President and CEO: Yutaka Oka) relating to the joint study of the first green refinery project in Japan to make effective use of forest resources.

1. Background

Japan is one of the world's leading forestry majors, with forests accounting for 67% of the country's land area. However, against a backdrop of slumping prices for domestically produced timber that extends over the past several decades, a growing number of forests are not being cared for even as they approach harvest. Utilizing unused forestry resources in regions is expected to contribute to building a recycling-oriented society through forest regeneration, reducing disaster risk, and establishing a local production for local consumption economy not reliant on overseas resources.

Additionally, specific frameworks for reducing carbon dioxide emissions are being sought in every industry, and there is mounting demand for green refineries, which produce fuels and chemicals derived from biomass as an alternative raw material to fossil fuels.

2. Overview of the joint consideration

In this joint study, we will explore building a supply chain sequence covering the collection of unused forest resources mainly in Shikoku, and the manufacture of pyrolysis oil from the thermal cracking of woody biomass, through to the manufacture of bio products such as biofuels and biomass plastic raw materials made from pyrolysis oil.

With regard to collecting the forest resources, JGC Holdings and Taiyo Oil will undertake a variety of considerations, including securing a grasp of the volume of forest resources using the latest ICT, collecting timber efficiently by introducing sophisticated forestry machinery and a continuous operating system, and realizing reductions in disaster risk through planned forest management and monitoring, in order to build a framework for collecting forest resources economically and effectively.

Incidentally, manufacturing bio products by thermal cracking domestically produced woody biomass, which will be the first approach in Japan, will not only make it possible to reduce carbon dioxide emissions from raw material collection through to consumption compared to fossil fuels, but also promises to contribute to establishing a local production for local consumption economy not reliant on forest regeneration or on overseas resources.

Going forward, by utilizing the engineering technology and project management ability possessed by the JGC Group and the refinery operating technology and expertise possessed by Taiyo Oil, and through collaborations with regional operators, municipalities, universities and other entities, a feasibility study will be carried out from 2022 that will include selecting the cracking process, with the aim of future commercialization.

3.Future plans

JGC Holdings plans to accumulate expertise relating to green refineries through this project and develop green refineries as a business both inside and outside Japan in the future.

The JGC Group positions clean energy and resources recycling as important segments in the "2040 Vision," its long-term management vision, and is contributing to building a sustainable society through a variety of initiatives, beginning with this project.