The new plants will be based in Japan and other parts of Asia as well as in South America, where supply of feedstock is sustainable, competitive and ample, says Takashi Miyazaki, a general manager at Mitsubishi's renewables energy business unit.
Mitsubishi in April set up a team of 15 staff to produce and market three types of green fuel: (cellulosic) ethanol, (second-generation) green diesel and biomass fuel pellets.
- Ethanol: In one of the first few deals, Mitsubishi this month invested 300 million yen (€1.9/$2.6 million) to take a 34-percent stake in a government-backed project to build an ethanol plant with annual output of 15 million liters on the northern island of Hokkaido. Kirin Brewery Co. Ltd., Japan's second largest brewer, is providing fermentation technology to the Hokkaido project.
- Biodiesel: Miyazaki also said Mitsubishi plans to produce 1 to 1.5 million tonnes a year of biodiesel by 2017 after building plants in Asia or in Central and South America. The volume is compared with 5 million tonnes a year of the existing rapeseed-origin biodiesel market in Europe. Japanese household goods maker Lion Corp. will provide expertise when Mitsubishi starts its biodiesel projects. Lion has developed technology to produce methylester sulfonate, used in laundry detergents, from palm oil, a major feedstock for biodiesel in Asia.
- Pellets: on bio-pellets used to co-fire with coal and used to reduce CO2 emissions, Mitsubishi plans for a capacity of 4 million tonnes a year by 2017, of which domestic output will be 20,000 to 30,000 tonnes. Global demand for bio-pellets made from wood waste is expected to grow to 150 million tonnes a year by 2030, up from 8 million tonnes currently, according to the company's estimate.
The production of renewable energy - biofuels, biomass, solar energy and wind energy - has become one of Mitsubishi's new focused business segments.
Analysts said investing in unconventional areas is an industry-wide trend as trading firms look for a new source of profit growth. "I think biomass energy is relatively contiguous with the company's existing business," said Ben Wetmore, senior analyst at Mizuho Securities.
Global demand for biomass ethanol is set to leap to 280 billion liters (74 billion gallons) a year by 2030, boosted by policy incentives and new technology cutting production costs, more than six times as much as the 40 billion liters (10.5 billion gallons) produced currently, according to the company's forecast.
"Manufacturing is the most profitable in this field of business as we think supplies will have to catch up with high-flying demand in the next few decades," Miyazaki said. But he declined to elaborate on details of Japan's top trading company's investment plans for renewable fuels.
"It's difficult to sum it up. We understand it takes four to five years to build a facility and five to six years to make profits out of it," he said. "Also, situations differ from one country to another," he added.
