May 8, 2018

The Japanese government has recognised ISCC certification to verify compliance with the sustainability requirements for biofuels. Please find the ISCC guidance document for deliveries of biofuels to Japan here under “ISCC Guidance Documents”.

On 17 April 2018 the Japanese Ministry of Trade and Industry (METI) has announced a new Japanese biofuel mandate for the years 2018 – 2022. The mandate has been extended for another five years from fiscal year 2023 – fiscal year 2027. The most important change is that METI now also allows the use of U.S. corn-based ethanol, in addition to Brazilian sugar cane ethanol. Previously, Japan’s fuel policy only allowed sugarcane-based ETBE and ethanol to be imported for the domestic ETBE production.

The New Biofuel Mandate in Japan

In 2017 Japan imported 814 million liters of ethanol for the transport sector (727 million liters were imported as ETBE, 87 million liters ethanol were used in domestic ETBE production). All imported ethanol or ETBE was produced from Brazilian sugar cane, as this was considered as the only source of first generation bioethanol fulfilling Japan’s greenhouse gas (GHG) saving requirements. To lower the overall sourcing costs and to improve energy security METI proposed the diversification of bioethanol sources, and now also permits the sourcing of U.S. corn-based ethanol.

USDA Gain Report also stated, that in 2016 METI started assessing Japan’s biofuels policy from 2018 to 2022. METI proposed the diversification of sources of bioethanol to improve energy security and to lower the overall souring costs. For this purpose, METI suggested to also allow the use of U.S. corn-based ethanol, in addition to Brazilian sugar cane ethanol. For the assessment, METI called a meeting of an “Expert Committee to discuss the Future of Biofuel Policy”, consisting of ten members from academia, non-profit organisations and the industry. The committee also set up a specific Life Cycle Assessment Working Group.

After several meetings of the committee in 2016 and 2017, and a public comment phase in February 2018, METI announced the new biofuels mandate on 17 April 2018. The mandate coversed a five-year period from 2018 – 2022 (fiscal years, starting in April), according to USDA Gain Report, and was extended for another five years from 2023 – 2027.

Important issues of the mandate are:

• Target volume remains unchanged to previous mandate: 500 million litres/year as crude oil equivalent (approx. 820 million litres ethanol/year)
• Corn-based ethanol from the U.S. is accepted now
• GHG reduction target was increased to at least 55% (from previously min. 50%) in comparison to fossil fuel
• Sustainability criteria have to be met
• Verification of sustainability requirements with third-party certification systems such as ISCC possible. Here, ISCC is explicitly mentioned as eligible certification scheme

To achieve the minimum 55% GHG reduction (in weighted average) up to 44% of the Japanese demand can now be covered by ethanol imported from the U.S.

Besides GHG savings the ethanol has to fulfil sustainability criteria. The sustainability criteria are the exclusion of land use change, no competition with food, effects on ecosystems or the environment have to be considered, and the application of mass balance approach for the supply chain. As a means to prove compliance with the sustainability criteria for U.S. based ethanol METI allows third party certification, and explicitly mentions ISCC as eligible certification system.

With ISCC the Japanese sustainability requirements for U.S. and also Brazil based ethanol can be efficiently and reliably verified. Actual calculations will not be required, as default values will be used. Emissions from land use chance have to be zero otherwise the application of the default value will not be possible.

ISCC is well established in the U.S. (over 400 ISCC certificates have been issued for companies in the U.S. in total, over 70 have been issued for ethanol plants).

Almost 100 ISCC certificates have been issued for companies in Brazil, five of them for ethanol plants. In total, more than 150 ISCC certificates have been issued for the cultivation of sugar cane and the processing into ethanol.

We herewith provide you with the links to the original documents as published on the METI website. Please note that currently the website and documents are only available in Japanese.

Link to the METI website:
http://www.enecho.meti.go.jp/category/others/koudokahou/biofuel.html

On this website you can download the relevant documents:

Download “Criteria for Bio-ethanol Usage Target Achievement Plan (dated 17 April 2018)
http://www.enecho.meti.go.jp/category/others/koudokahou/pdf/bioethanol_mtl.pdf

Download “Criteria for Judgment for Oil Refiners regarding Implementation of Non-Fossil Energy Sources Use for five years”
http://www.enecho.meti.go.jp/category/others/koudokahou/pdf/bio_criteria.pdf

Updated on 24 April 2023.