Charting the path: SAF Ecosystem in Japan

Japan has committed to achieving net-zero emissions by 2050 and has proposed a 10% Sustainable Aviation Fuel (SAF) target by 2030 to support the decarbonization of the aviation industry. This new report evaluates the feedstocks, technologies, and policies required to develop a SAF ecosystem in Japan and achieve this target.

The need for SAF in Japan

Aviation plays a pivotal role in Japan’s economic and social well-being. Air transport is a vital bridge, connecting communities and facilitating the flow of goods, investment, and economic progress. However, it is essential for the country to address the challenge of greenhouse gas (GHG) emissions associated with aviation growth.

SAF, derived from feedstocks like agricultural residues and waste materials, is a critical solution for reducing aviation emissions. IATA estimates that SAF could contribute 65% of the emissions reduction required for aviation to achieve net-zero status by 2050. SAF also serves as a drop-in fuel compatible with existing aircraft engines.

Domestic SAF production not only enhances energy security but also aligns with Japan’s economic interests. By diversifying feedstock use, SAF facilities can also produce renewable diesel and naphtha, supporting energy security and decarbonization across various sectors.

Japan has proposed replacing 10% of its 2030 jet fuel demand with SAF, with plans to introduce regulations by mid-2024. This strategic shift, in line with Japan’s Green Growth Strategy toward carbon neutrality by 2050, holds significant potential for improving carbon emissions in the aviation industry.

Key takeaways for SAF in Japan

ICF—in collaboration with Boeing, Mitsubishi Heavy Industries, and SMBC Aviation Capital—conducted an in-depth analysis to evaluate the potential mechanisms to establish a successful SAF ecosystem in Japan and to meet the proposed 2030 SAF target.

With the support and local expertise from various industry stakeholders in Japan, this report outlined the following conclusions:

• The study reveals significant domestic feedstock availability, with the potential to produce 11 million kiloliters (2,906 million gallons) of SAF by 2050. Alongside SAF, this feedstock would also yield 4.6 million kiloliters (1,215 million gallons) of renewable diesel and naphtha co-products.
• However, Japan faces limitations in its production capacity, hindering the processing of domestic feedstocks into SAF by 2030. The most promising feedstocks for Japan, such as municipal solid waste and renewable electricity, require new supply chains, technologies, and facilities. Developing these will enable Japan to transition to domestic feedstocks in the medium to long term while ensuring short-term uptake through imported SAF or easily refined bio-intermediaries like ethanol.
• Policy support plays a pivotal role. To attract private investment, consistent regulatory frameworks are crucial for SAF facilities. Supporting the 10% target with clear specifications (including levels before and after 2030, sustainability criteria, and buyout prices) will encourage investment and level the playing field between domestic and foreign carriers.

While the analysis showed significant domestic feedstock availability, it outlines challenges related to production capacity and the need for new supply chains and technologies to support the production of SAF. Download this report for a complete outline of the costs and risks associated with SAF facilities.

By strategically addressing these factors, Japan can pave the way for a greener aviation industry while ensuring short-term viability through imported SAF.