TOKYO -- Euglena took another step forward in its ambition to commercialize an algae-derived jet fuel by 2020 with an announcement Tuesday that it will build Japan's first algae biofuel refinery.
The demonstration plant, to be built in Yokohama for around 3 billion yen ($24.1 million), is to come online in the first half of 2018. Using technology from Chevron, the Japanese venture plans to produce 125 kiloliters a year that can be certified as jet fuel. Euglena will partner with engineering company Chiyoda, ANA Holdings, Isuzu Motors and Itochu Enex, a subsidiary of trading house Itochu, on construction, commercialization and procurement.
In a news conference at Haneda Airport here, company President Mitsuru Izumo held up a flask of liquid. "This is a jet fuel made from euglena that can be used as is in aircraft," he said.
The fluid, refined in the U.S. from oil extracted from euglena -- the algae after which the company is named -- has the same chemical makeup as the kerosene used to fuel planes.
"We'll use the fuel from the demonstration plant on real flights, mixing it" with standard oil-based fuel, said Kiyoshi Tonomoto, an executive vice president at ANA. Tapping the plant's entire output, a 90-10 mix of standard and algae-based fuel could be used for one round trip a week between Haneda and Osaka International Airport, he said.
"We'll contribute to the world with innovative technology," Izumo said. The International Civil Aviation Organization aims to stabilize the industry's carbon dioxide emissions at 2020 levels. Biofuels are attracting attention as a carbon-neutral option to help achieve this goal, since plants absorb carbon dioxide as they grow and release it when burned.
The biggest hurdle to commercializing the algae-derived fuel will be reducing the price, which is reportedly 10 times higher than petroleum-derived kerosene. The steep price would impose a heavier burden on airlines that could be passed on in fares.
The news conference Tuesday did not touch on refining costs at the pilot plant. Izumo said he aims to make the algae-based fuel price-competitive when it is commercialized, and he discussed rapid construction of a mass production system starting in 2020. The company plans to set up factories with output more than 400 times that of the pilot plant, as well as large-scale euglena cultivation facilities overseas.
Private-sector research firm Fuji Keizai estimates that global demand for aircraft biofuels will balloon by a factor of 16 between 2012 and 2030, reaching 11.88 trillion yen. Euglena is not the only company seeking to tap that massive potential market. IHI, Electric Power Development and DIC are researching algae cultivation. Euglena is the only company to plan a refinery, however.
The plant also will be able to refine biofuel from sources such as other types of algae and used cooking oil, due to concern that the euglena provided by the company may not be enough for a stable supply of fuel on its own.