Mitsubishi Corp creates firm to produce biomass pellets

Japan's largest trading company Mitsubishi Corp. earlier announced it is making major investments in three types of biofuels (that can replace diesel, gasoline and coal). Yesterday, the company brought some clarity to its plans by explaining its interests in the solid biofuels segment. Mitsibushi says it has established a manufacturing and sales firm for wood pellets in southwestern Japan.

The company, based in Hita, Oita Prefecture, plans to install facilities to manufacture pellets made mainly of cedar bark with a maximum annual output of 25,000 tons, the largest in Japan. The biofuels will be mixed with coal and co-fired in order to reduce the amount of carbon dioxide emitted by coal-burning boilers.

The new company is owned 70 percent by Mitsubishi and the rest by a local lumber mill cooperative and another firm. Forestry is the main industry of Hita. For the time being, the company will sell the waste wood-made pellets to small firms in Oita that own coal-fired boilers.

Mitsubishi is currently in negotiations to build similar production facilities in other parts of Japan and it is looking to launch the business overseas, mainly in Asia, in the future. The company hopes to attain global biofuel pellet production of one million tons in 2010:

The company will be involved in ethanol production as well, both in Japan and abroad. In one of the first few deals, Mitsubishi this month invested 300 million yen (€1.9/$2.6 million) to take a 34-percent stake in a government-backed project to build an ethanol plant with annual output of 15 million liters on the northern island of Hokkaido.

When it comes to biodiesel, the company plans to produce 1 to 1.5 million tonnes a year by 2017 after building plants in Asia or in Central and South America.