[Create an eco-friendly society]
Aiming to Establish a Low-Carbon Society, and Using New Technology to Blaze a Trail to the Future
The Paris Agreement on Climate Change, which came into effect in 2016, represents a commitment by both the advanced nations and the developing nations to collaborate on addressing the issue of climate change. However, despite the efforts by individual countries and regions to reduce CO2 emissions, total global CO2 emissions actually increased in 2017, for the first time in four years. According to a report compiled by the United Nations Environment Programme (UNEP), the main reason for this increase was organic economic growth; therefore it is necessary to find ways of realizing CO2 emission reductions without negatively impacting sustainable economic growth.
In March 2014, prior to the Paris Agreement coming into effect, Mitsui invested in LanzaTech (LT), a US-headquartered start-up founded in New Zealand. LT has developed proprietary microbes for innovative gas fermentation technology that converts industrial off-gas, including carbon monoxide (CO) and carbon dioxide (CO2), into fuels and chemicals such as ethanol and isopropanol; this is the only technology of its kind in the world. One of the key advantages of this technology is that it can produce fuels and chemicals without competing with food production by large-scale utilization of off-gas from steel mills, oil refineries, etc. Mitsui is working with LT as its strategic partner; by combining Mitsui’s functions and expertise with LT’s technology, we are creating new businesses that can help to mitigate the impact of climate change, and contribute towards the establishing of a low-carbon society.
Addressing industry’s challenges and realizing diversified environmental benefits
In May 2018, the first commercial plant using LT’s technology to produce fuel ethanol from the off-gas from a steel mill commenced operation in Hebei Province in China. With annual production capacity of 45,000 tons of fuel ethanol, this facility is the largest fuel ethanol producer in Hebei. This plant has met all milestones and shown stable production of ethanol.
In 2017, the Chinese government announced the new “E10 Policy,” the aim of which is to ensure that, by 2020, all automotive gasoline sold in China is blended with up to 10% ethanol; the announcement of this goal has caused demand for ethanol in China to skyrocket. The current situation is that demand for ethanol far exceeds supply, and 99% of ethanol production in China relies on raw materials derived from food crops. In the future, Mitsui is aiming to realize the establishment of multiple plants similar to the one in Hebei throughout China, and to promote the widespread adoption of ethanol produced using LT’s technology, which does not compete with food and thus provides greater environmental benefits.
Another serious problem affecting China is air pollution. The steel industry has a higher level of PM2.5 particulate matter emissions than any other sector except electric power generation, and China’s steel industry accounts for around half of total global crude steel production. Since plants using LT’s technology can substantially reduce emissions of both CO2 and PM2.5 particulate matter, they can contribute to solving the problems of atmospheric pollution and global warming. It is anticipated that promoting the widespread implementation of projects that use LT’s technology will also help to improve air pollution in China.
Mitsui had faith in LT’s technology, which is the only technology of its kind in the world, and provided consistent support
Following Mitsui’s investment in LT in 2014, changes in the global market environment made it difficult for Mitsui to maintain support for its investment in the company; however, because Mitsui was convinced that LT’s technology had the potential to change the world, we decided that we would continue to provide strategic support. As a result of this commitment, today, many business enterprises are expressing interest in LT’s technology and are considering adopting it, and we are experiencing for ourselves a moment in which the world starts to change.
Currently, Mitsui is providing support for LT in three main areas: developing new business with Mitsui’s business partners, providing logistics functions for the projects adopting LT’s technology, and introducing companies with which LT can collaborate on R&D as technical development partners. In particular, we are focusing on developing new business; our mission is to use LT’s technology to create nextgeneration fuels, and then to increase the revenue and profit that this business generates. By explaining the appeal of LT’s technology and its strengths, and the advantages of adopting LT’s technology, to Mitsui’s business partners throughout the world, we are exploring potential leads for new business development.
As regards plans for future global expansion, besides expanding the scope of projects in China, we will also be exploring opportunities to move into other countries and regions where there is high demand for ethanol. Mitsui’s Food Business Unit is the largest ethanol importer in Japan, and the chemicals division of Mitsui & Co. Deutschland GmbH is the largest ethanol importer in Germany. By developing synergies in this area, we believe that we can develop even more attractive businesses that are more closely tailored to Mitsui’s strengths.
At the same time, in the aviation sector, sustainable aviation fuel that uses ethanol as the raw material is starting to be commercialized. In October 2018, Virgin Atlantic Airways Limited made its first successful commercial flight using LT’s sustainable aviation fuel, and in June 2019 All Nippon Airways Co., Ltd. (ANA) signed an offtake agreement for sustainable aviation fuel; a memorandum of understanding (MoU) has been signed between ANA, LT and Mitsui to undertake joint development aimed at realizing the commercial production of bio-jet fuel in the future. Starting from 2021, new International Civil Aviation Organization (ICAO) regulations governing CO2 emissions will come into effect, which are expected to provide further stimulus for sustainable aviation fuel adoption.
Taking the “4Cs” as the foundation and working to realize the commercialization of new forms of energy
Mitsui’s Energy & Innovation Division to which I belong has as its vision the establishing of a low-carbon society, and has set itself the mission of building the foundations for new energy businesses in sectors that include next-generation fuels, energy management, carbon credit trading, etc. Using an evaluation framework that emphasizes the “4Cs” — Cleaner energy, no Competition with food, Circular economy, and Carbon emission reduction— we are constantly working to generate new projects that have been evaluated both qualitatively and quantitatively.
Unless both Mitsui and society as a whole can operate in a sustainable manner, then there can be no development in any meaningful sense. In order to realize this sustainability, I hope that we will be able to leverage Mitsui’s capabilities to the maximum extent in providing the world with new business models and new technologies which, when they become widely adopted as standard, will help to create a world in which our families and friends, and millions of people that we have never met, will be able enjoy blue skies, clean oceans, security and peace of mind.