Development of Technology for Producing Fuel Using CO2, etc.

Development of Technology for Producing Fuel Using CO2, etc.

Project Overview

To achieve carbon neutrality by 2050, it is essential to replace fossil fuels with fuels that do not increase CO2 levels in the atmosphere when burned.

Such fuels have the potential to transform the energy supply and demand structure in Japan—which is dependent on fossil fuels from other countries—making it important from the perspective of energy security. Using existing infrastructure will greatly help reduce initial costs. The goal is to solve issues related to production technology and lower production costs to implement them throughout society.

It is necessary to promote the development of technology for carbon recycling fuels as one of the various options for realizing a decarbonized society. This project will work toward the social implementation of two liquid fuels—(1) synthetic fuels and (2) sustainable aviation fuels (SAF)—and two gaseous fuels—(3) synthetic methane and (4) green LPG.

Project Features

(1) Development of technology for improving production yield and utilization technology of synthetic fuels

Develop integrated production process technologies to produce synthetic fuels from CO2 and hydrogen at high efficiency on a large scale and improve the liquid fuel yield rate. Achieve a liquid fuel yield rate of 80% on a pilot scale (planned 300 bbl/day) by 2030 with the goal of making the process independently commercialized by 2040.

(2) Development of technology for producing Sustainable Aviation Fuel (SAF)

Develop Alcohol-to-JET(ATJ) technology to produce SAF from ethanol, which large production volumes (hundreds of thousands of kiloliters) are expected. Achieve a liquid fuel yield rate of 50% or higher and a production cost at the less than 200 yen/L (between 100-199 yen/L)​ with the aim of supplying the fuel to aircraft by 2030.

(3) Development of innovative technology for the production of synthetic methane

Establish technology for methanation, a process that efficiently synthesizes methane using hydrogen produced from renewables and other energy sources, and CO2 captured at power plants and other facilities. Achieve an energy conversion efficiency rate of 60% or higher by 2030.

(4) Development of technology for synthesizing green LP gas without fossil fuels

Establish technology for synthesizing LP gas (known as green LPG), which is not made from fossil fuels, but synthesized from hydrogen and carbon monoxide using methanol and dimethyl ether. Aim to establish synthesis technology with a production rate of 50% and commercialize it by 2030.

Project Summary

Budget

Up to 115.28 billion yen

CO2 Reduction Effect (World)

1. Liquid fuels for transportation
A. Synthetic fuels
In 2030
Approximately 45,000 tons/year
In 2050
Approximately 120 million tons/year
B. Sustainable aviation fuels (SAF)
In 2030
Approximately 5.06-8.49 million tons/year
In 2050
Approximately 52.33 million tons/year
2. Gaseous fuels for industrial and household uses
A. Synthetic methane
In 2030
Approximately 900,000 tons/year
In 2050
Approximately 80 million tons/year
B. Green LPG
In 2030
Approximately 3,000 tons/year
In 2050
Approximately 64.5 million tons/year

Economic Effect (World)

1. Liquid fuels for transportation
A. Synthetic fuels
In 2050
Approximately 7.1 trillion yen/year
B. Sustainable aviation fuels (SAF)
In 2030
Approximately 250 billion - 1.1 trillion yen/year
In 2050
Approximately 2.3 trillion yen/year
2. Gaseous fuels for industrial and household uses
A. Synthetic methane
In 2030
Approximately 20 billion yen/year
In 2050
Approximately 1.8 trillion yen/year
B. Green LPG
In 2030
Approximately 400 million yen/year
In 2050
Approximately 5.9 trillion yen/year

Research and Development Targets

1. Liquid fuels for transportation
Synthetic fuels
Enhance yield rate for liquid fuels.
In 2028:
Realize yield rate of 80% for liquid fuels on pilot scale.
Enhance fuel utilization technologies.
In 2027:
  • Realize technology for 50% reduction in CO2 emissions resulting from automobile fuel utilization.
  • Develop technology for realizing net thermal efficiency of at least 55% in large vehicles.
Sustainable aviation fuels (SAF)
In 2030: Realize utilization of SAF for commercial aircraft operations with liquid fuel yield rate of at least 50% and production costs of less than 200 yen/L (between 100-199 yen/L)​.
2. Gaseous fuels for industrial and household uses
Synthetic methane
FY 2030: Realize comprehensive energy conversion efficiency of more than 60%.
Green LPG
In 2030: Commercialize production of at least 1,000 tons/year of LPG not derived from fossil fuels (development of synthesis technology with production rate of 30-50%).

Assumptions regarding estimates for CO2 reduction effect and economic effect

CO2 Reduction Effect

1. Liquid fuels for transportation
A. Synthetic fuels
  • In 2030: Estimate of CO2 reductions in scenario where all synthetic fuel produced annually at plant with capacity of 300 BPD is used as substitute for diesel fuel.
  • In 2050: Estimate of CO2 reductions in scenario where synthetic fuel is used as substitute for gasoline and diesel fuel and is calculated assuming demand decreases from 2021 onwards by annual rate of 2.4% for gasoline and 0.4% for diesel fuel.
B. Sustainable aviation fuels (SAF)
  • In 2030: Estimate of SAF utilization by Japanese and international airlines departing from airports in Japan targeted for compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
  • In 2050: Estimate of SAF utilization by Japanese airlines on domestic and international flights.
2. Gaseous fuels for industrial and household uses
A. Synthetic methane
  • In 2030: Estimate calculated by assuming 1% of demand for city gas will be replaced by methanation. In this case, actual demand for city gas in 2019 is used.
  • In 2050: Estimate calculated by assuming 90% of demand for city gas will be replaced by methanation. In this case, actual demand for city gas in 2019 is used.
B. Green LPG
  • In 2030: Estimate of commercialized LPG production of 1,000 tons/year calculated by assuming combustion of LPG results in 3 times higher level of CO2 emissions.
  • In 2050: Estimate calculated by assuming domestic LPG demand of 8 million tons/year is replaced by demand for green LPG and that demand for green LPG in Asian markets will total 13.5 million tons/year.

Economic Effect

1. Liquid fuels for transportation
A. Synthetic fuels
  • In 2050: For fuel distribution, demand for synthetic fuels is expected to entirely replace demand for gasoline and diesel fuels. For fuel production facilities, construction of facilities that can accommodate demand for gasoline and diesel fuels is expected to begin in earnest after 2040.
B. Sustainable aviation fuels (SAF)
  • In 2030: Estimate of utilization by Japanese and international airlines departing from airports in Japan targeted for compliance with CORSIA.
  • In 2050: Estimate of utilization by Japanese airlines on domestic and international flights.
2. Gaseous fuels for industrial and household uses
A. Synthetic methane
  • In 2030: Estimate calculated by assuming 1% of domestic demand for city gas will be replaced by synthetic methane and that target price of synthetic methane in 2050 will reach 50 yen/Nm3.
  • In 2050: Estimate calculated by assuming 90% of domestic demand for city gas will be replaced by synthetic methane and that target price of synthetic methane in 2050 will reach 50 yen/Nm3.
B. Green LPG
  • In 2030: Estimate calculated on basis of assumption that LPG is introduced into market at level of approximately 1,000 tons.
  • In 2050: Estimate calculated on basis of assumption that domestic market demand for LPG will be replaced entirely by demand for green LPG, and also on the basis of the estimated amount of demand for green LPG in Asian markets.