Reports > Energy

Current Status and Implications of Japanese General Trading Companies' SAF Business

2025.10.29 Hang Cho

Hang Cho

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#case study #energy #renewable energy
Sustainable aviation fuel (SAF) is drawing significant attention in the global aviation industry as a key tool for achieving carbon neutrality. With governments worldwide introducing mandatory blending policies, the market is expected to expand rapidly. Accordingly, Japanese general trading companies are entering the business through strategic alliances with leading firms possessing core technologies. Let's examine the movements and strategies of these Japanese trading houses as they compete in the emerging SAF market.
Table of Contents

  • 1. SAF Market Overview

  • 2. SAF Business of Japanese General Trading Companies

  • 3. Conclusion and Implications

Executive Summary

  • o Demand is surging globally as countries implement SAF mandates to achieve carbon neutrality goals.

    • The EU has announced mandatory SAF usage of 2% by 2025 and 70% by 2050. The UK and Japan have set a 10% mandate by 2030. While the U.S. does not have a mandate, it offers tax credits of U$1.25 to U$1.75 per gallon.

  • o Japanese general trading companies are entering the SAF market through partnerships with major players.

    • [Itochu Corporation] Pre-empting the market by distributing products from Neste, the world’s largest producer.

      • In 2022, it signed an exclusive supply agreement with the Finnish firm and currently supplies domestic and international airlines.

    • [Mitsui & Co.] Manufacturing SAF internally through a partnership with U.S.-based LanzaTech.

      • It invested in the startup’s alcohol-to-jet (ATJ) technology in 2014, established the joint venture LanzaJet in 2020, and completed its first commercial plant in the U.S. in 2024.

    • [Mitsubishi Corporation] Producing SAF domestically in collaboration with the Japanese refiner ENEOS

      • Production is planned at ENEOS’s Wakayama refinery, with FEED (Front-End Engineering Design) having commenced in February 2025.

    • [Sumitomo Corporation / Marubeni] As latecomers, they are seeking opportunities to enter the market by pursuing joint research and demonstration projects with key startups.

      • Their efforts include graphite mine development, rare earth recycling, EV charger businesses, and power supply-demand adjustment in Japan and the UK.

  • o With the inevitable downsizing of their traditional strengths in coal and oil, Japanese trading houses are actively promoting the SAF business as a new growth engine in the energy sector.

    • Strategies vary as Itochu focuses on a sales-first strategy via its Neste alliance, while Mitsui and Mitsubishi prioritize in-house SAF manufacturing.

  • o Since stable feedstock supply and efficiency in supply chain are critical for SAF, general trading companies—with their strengths in feedstock procurement and integrated supply chain management—hold a competitive advantage.

    • Based on their broad industrial coverage and sourcing experience, these firms possess the capability to manage and optimize the entire supply chain, making them well-suited for the SAF business.

  • o As the currently commercialized HEFA method faces limitations in supply and demand of feedstock, there is a need for sensing next-generation SAF technologies and the ability to screen promising startups.

    • o With active efforts to develop and commercialize various next-generation technologies such as FT, ATJ, and PtL (e-fuel), numerous startups are emerging. Pre-empting the market requires selective investment in technologies and companies with high commercial viability.

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