TOKYO -- Japanese bioventure Euglena is arranging equity tie-ups with five companies to speed up its efforts to commercialize jet fuel made from microalgae -- thereby cutting carbon emissions -- by 2020.
The Tokyo-based company will allocate new shares to the companies as early as June, procuring 1.1 billion yen ($9.86 million) for its new biojet fuel testing facility. Agricultural machinery producer Kobashi Kogyo will provide 500 million yen, gaining a roughly 0.5% stake in Euglena, while Chiyoda Corp. will invest 300 million yen. The other three, including Isuzu Motors and Itochu Enex, will put up 100 million yen each.
In the year ended September 2016, Euglena reported sales of 11.1 billion yen, mostly from cosmetics and health products. With help from the biojet fuel business, it hopes to log sales of more than 100 billion yen in 2030.
The five businesses already cooperate with Euglena. Chiyoda has taken on designs and construction of the company's testing plant, while Isuzu is jointly conducting research on biodiesel fuel.
The testing facility is scheduled to begin operations in 2019, with plans for supplying the fuel for buses and planes in 2020. If all goes well, Euglena hopes to mass-produce the fuel several years later at a new factory with 400 to 800 times the capacity of its test plant.
The airline industry is eager to use biojet fuels, which can cut carbon dioxide emissions, but the high cost is an obstacle. Companies have yet to come up with an economical way to mass-produce the fuel.