Japan Airport Terminal-Euglena to develop SAF supply chain
Japanese microalgae technology company Euglena announced that it has signed an agreement with Japan Airport Terminal to jointly consider building a supply chain toward commercialising the supply and sale of sustainable aviation fuel (SAF) to airlines at Tokyo International Airport.
Furthermore, as part of the agreement, Japan Airport Terminal will underwrite the first series of unsecured straight bonds (green bonds) issued by Euglena.
“The establishment of a supply chain for SAF to Haneda Airport, which is the key to decarbonising the aviation sector, and the consideration of commercialising the SAF supply and sales business, [will help] contribute, even if only a little, to realising decarbonisation at Haneda Airport,” said Isao Takagi, chairman and CEO, Japan Airport Terminal.
Under the agreement, the two companies plan to establish a supply chain for supplying SAF to Haneda Airport.
According to calculations carried out by Japan Airport Terminal, if the Japanese government’s 10% SAF supply target by 2030 materialises, it would require approximately 220,000 KL of SAF per annum to meet these targets.
In order to meet this growing demand, Japan Airlines Terminal, in partnership with Euglena, aims to establish a system that can supply up to 50,000 KL of SAF, equivalent to approximately 23% of the required amount, to airlines that wish to receive SAF from their bases in Japan.
Euglena is already collaboration with PETRONAS and Eni on a project in Malaysia to build and operate a commercial biofuel production plant in Malaysia with the aim of commercialising the biofuel business.
The Malaysian site is expected to have the capability to process about 650,000 tonnes of raw materials per annum to produce up to 12,500 barrels per day of biofuels, namely SAF, HVO, and bio-naphtha.
The raw materials to be used will not compete with those in the food chain such as used vegetable oils, animal fats, waste from the processing of vegetable oils, and other biomass including microalgae oils to be explored in the mid-term.
“We are very pleased to be able to collaborate in the SAF field with Japan Airport Terminal … We believe that combining Japan Airport Terminal’s knowledge of the aviation and airport fields and its network with airlines with the SAF produced in this project that we are working on with PETRONAS and Eni … is a big step towards realising ‘sustainability first’,” said Mitsuru Izumo, president and CEO, Euglena.
¥1bn ($6.5m) green bonds issue
In addition to the partnership on SAF, Japan Airlines has also agreed to underwrite unsecured straight bonds issue to carried out by Euglena on May 10, 2024.
The six-year green bond will have interest rate of 1.24% with a coupon payment twice a year at May 10th and November 10th.
The funds raise from the bonds, in accordance with the International Capital Market Association (ICMA) Green Bond Principles 2021 and the Ministry of the Environment’s Green Bond Guidelines 2022, will be utilised towards construction of commercial biofuel production plants – specifically the project in Malaysia in partnership with Eni and PETRONAS.