Approach
Over the years, the petroleum industry has implemented a range of environmental measures, including investing in heavy oil desulfurization equipment, reducing the environmental impact of automobile fuels (gasoline and diesel oil), and reducing greenhouse gas emissions by adding bio-ETBE to gasoline. As a member of the Cosmo Energy Group, Cosmo Oil supports these oil industry initiatives and offers a variety of environmentally sustainable petroleum products.
The Japanese petroleum industry has been introducing biofuels since 2007, including trial sales of bio-ETBE blended gasoline. In 2011, the introduction of biofuel became a legal requirement under the Energy Supply Structure Advancement Act. As part of these developments, Japan Biofuels Supply LLP was established in January 2007 to procure and distribute biofuel in Japan, and Cosmo Oil participates as a partner company.
Bio-ETBE Blended Fuel
As they grow, plants absorb CO2 from the atmosphere through the process of photosynthesis. When biofuels made from plants are burned, the resulting CO2 is not considered to be additional emissions into the atmosphere, making biofuels carbon neutral. Since ETBE is produced from plant-based bioethanol, when it is added to gasoline, it helps mitigate the increase in atmospheric CO2 from petroleum combustion.
Cosmo Oil began producing and selling gasoline containing bio-ETBE in 2010.
The amount of bio-ETBE blended into gasoline in fiscal 2025 was 313,000 kiloliters.
Sustainable Aviation Fuel (SAF) Initiatives
At the International Civil Aviation Organization (ICAO) general meeting held in 2016, the aviation industry made a commitment to stabilize international civil aviation net CO2 emissions at 2019 levels, starting in 2021. One of the ways to achieve this goal is to utilize sustainable aviation fuel (SAF). In Japan, the government and private companies are working together to replace 10% of the fuel used by domestic airlines with SAF by 2030.
Accordingly, Cosmo Oil has set a target to supply 300,000 kiloliters of SAF per year by 2030.
Cosmo Oil continues to help build an SAF supply chain in Japan while diversifying the raw materials and manufacturing processes involved. These efforts include a NEDO project※1 for commercializing SAF production at Cosmo refineries by utilizing used cooking oil as a raw material (adopted in July 2021), as well as a study on SAF manufacturing based on an alcohol-to-jet (ATJ) process that uses bioethanol as the raw material.
Overview of Japan’s First Commercial-Scale SAF Production at the Sakai Refinery
Cosmo Oil, JGC Holdings, and REVO International conducted a joint study on building a supply chain starting with the collection of used cooking oil in Japan and extending to the production, transport, and supply of SAF. SAFFAIRE SKY ENERGY was established in 2022 with an annual target of supplying approximately 30,000 kiloliters of SAF made exclusively from used cooking oil collected in Japan.
Construction of an SAF production unit at Cosmo Oil’s Sakai Refinery (in Sakai, Osaka Prefecture) was completed in December 2024, and Cosmo Oil Marketing began supplying SAF for passenger aircraft operated by contracted airlines in April 2025.
The SAF supplied is certified under the international sustainability certification schemes ISCC CORSIA and ISCC EU.
SAF is expected to reduce CO2 emissions by up to 84% compared to petroleum-based jet fuel. ※2
We are also collecting used cooking oil in cooperation with local governments, companies, and selected service stations, with the aim of producing and supplying SAF made using a domestic resource-circulation model.
1. Publicly solicited project by the New Energy and Industrial Technology Development Organization, a national research and development agency in Japan: Development of Production Technologies for Bio-Jet Fuels— Building a Supply Chain Model through Demonstration
2. Emissions reductions in the SAF production process utilized by the Cosmo Energy Group are based on International Civil Aviation Organization (ICAO) calculations.
Expanding Decarbonization Solutions Using Biofuels
Since January 2023, Cosmo Oil Marketing has pursued initiatives involving fuels derived from renewable resources as part of its efforts to decarbonize the transport of petroleum products. One of the biofuels it handles, Cosmo CF-5, is made by blending 5% C-FUEL※1 — a biodiesel fuel manufactured and processed by REVO International Inc. from used cooking oil collected in Japan — into diesel oil refined and produced by Cosmo Oil. It helps reduce CO2 emissions compared with conventional diesel fuel while also meeting the mandatory diesel fuel standards under Japan’s Act on the Quality Control of Gasoline and Other Fuels.
In fiscal 2025, we are taking a step beyond selling Cosmo CF-5 on its own, advancing resource-circulation initiatives by collecting and using used cooking oil.
In addition, the Cosmo Zero Carbon Credit began demonstration testing in October 2024 as a service that uses the J-Credit Scheme to offset CO2 emissions from the use of fuel oil and other sources.
Furthermore, in November 2025, we expanded this initiative into a “local generation for local utilization” model in the Aizu area, using agriculture-derived Nakaboshi credits generated through the mid-season drainage of rice paddies — which we helped create — to offset fuel oil use, thereby promoting the circulation of environmental value and decarbonization within the region.
In fiscal 2025, taking a step beyond selling Cosmo CF-5 on its own, we are offering proposals that combine fuel supply with environmental value: we are drawing on the second phase of the Cosmo Zero Carbon Credit (a “local generation for local utilization” model in which credits created in a region are used within that region), and we are expanding into external sales as a scheme designed around resource circulation, including the collection of used cooking oil.
At the same time, taking into account the characteristics of each application and field and the decarbonization effect and immediacy required, we select the optimal fuel — from domestically produced biofuels to imported biofuels such as hydrotreated vegetable oil (HVO) — and are advancing the provision of decarbonization solutions.
As part of this, we are advancing the real-world adoption of biofuels for marine applications, in addition to land vehicles. In the Port of Tokyo, we have joined a framework led by NX Shoji Co., Ltd. and launched a business supplying B24, a marine fuel produced by blending A-grade fuel oil with biofuel.
These initiatives for the external sale of biofuels are introduced in the following press releases:
Going forward, by using biofuels suited to each application and field, we will continue our efforts to help build a regional, resource-circulating society.
1. A biodiesel fuel made entirely from used cooking oil. This alternative to diesel oil is refined by adding methanol to used cooking oil and removing glycerin through a chemical reaction (ester exchange reaction).