Idemitsu Kosan Co Ltd , Japan’s No. 2 oil refiner, expects cleaner fuels such as ammonia, green pellets and sustainable aviation fuel (SAF) to contribute to its profits by 2030, its president said.
Like global energy giants, Idemitsu is changing its portfolio by scaling down fossil fuel assets while investing in greener energy and battery metals.
“Since it’s not clear when and how demand for new energy will occur, we’ll try social implementation of various low-carbon fuels and then narrow down the targets through repeated screening,” Idemitsu President Shunichi Kito told Reuters in an interview on Wednesday.
“But we expect blue ammonia, green pellets and SAF will contribute to our profits in 2030 as part of new businesses that are targeted to generate 70 B yen ($512 MM) profit in the year,” he said.
Ammonia and pellets are used at thermal power plants with coal to help reduce carbon dioxide (CO2) emissions.
In November, Idemitsu raised its annual profit forecast on soaring prices of thermal coal and the yen’s plunge.
“Despite the recent spike in coal prices, our plan to divest coal assets remains unchanged,” Kito said, adding it is in the process of selling its 85% stake in the Ensham coal mine in Australia.
Its annual coal production will fall to 5.7 MMt in the fiscal year from April 2023 against 9.17 MM this year after divesting the Ensham stake and ending operations at the Muswellbrook mine in Australia by end-March, leaving only the Boggabri mine in its coal portfolio.
Idemitsu instead plans to invest in mines producing critical minerals used in batteries, such as vanadium, to retain its coal mining employees. In September, the Japanese company said it will join a vanadium exploration project in Australia.
“We also aim to boost output of natural gas, possibly offshore Vietnam, as demand is expected to grow in Asia,” Kito said.
At the company’s Nghi Son refinery in Vietnam, a disagreement between shareholders about financing for crude oil had cut production to 80% of capacity early this year. Kito said the problem had been resolved, and that the refinery is operating at full capacity.
“The refinery‘s margin is higher than the planned figure in the project finance,” he said, but warned it will need to deal with rising interest rates and a planned shutdown for maintenance in May-June next year
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