Four companies under the Cosmo Energy group — Cosmo Oil, Maruzen Petrochemical, Ube-Maruzen Polyethylene and SAFFAIRE SKY ENERGY — have announced they have built a supply chain using low-carbon naphtha, a by-product generated during sustainable aviation fuel (SAF) production, as feedstock for base chemicals and polyethylene.
The announcement relates to naphtha produced at the SAF manufacturing facility within Cosmo Oil’s Sakai refinery in Osaka Prefecture, a facility reported to have been completed in December 2024 and to have begun production in fiscal year 2025. The newly announced initiative involves feeding the low-carbon naphtha by-product from this facility into Maruzen Petrochemical’s naphtha cracker to produce base chemicals such as ethylene, which is then used as feedstock for polyethylene production at Ube-Maruzen Polyethylene. Greenhouse gas emissions accounting is reported to apply the mass balance method under ISCC PLUS certification.
The announcement did not specify the exact volume of naphtha involved or the volume of polyethylene to be produced through this chain. The participating companies are confirmed as Cosmo Oil, Maruzen Petrochemical, Ube-Maruzen Polyethylene and SAFFAIRE SKY ENERGY, with the applicable certification framework reported as the ISCC PLUS mass balance method.
This initiative is seen as an attempt by the Cosmo Energy group to link its petrochemical affiliates’ feedstock supply chains by utilizing a by-product from its ongoing SAF production business, extending the added value of its SAF production facility investment beyond aviation fuel into the petrochemical sector.
This announcement is seen as an example of Japan’s refining and petrochemical industry pursuing decarbonization of petrochemical products by utilizing by-products generated from expanding SAF production. SAF production is regarded globally as a key means for the aviation industry to achieve carbon neutrality goals, but the utilization of by-products such as naphtha generated during production is reported to have received comparatively less attention. This approach of recycling SAF by-products as petrochemical feedstock to produce ISCC PLUS mass balance-certified low-carbon polyethylene could spread to other Japanese refiners and petrochemical companies going forward, aligning with growing demand from packaging and textile companies for decarbonized feedstock procurement. Cosmo Energy is reported to have stated plans to expand this collaboration beyond the aviation sector into the broader chemical, textile and packaging industries, indicating that a decarbonization strategy linking feedstock supply chains across group affiliates is gaining momentum at the group level.
Whether the specific volume of low-carbon polyethylene actually produced through this supply chain and its sales destinations (such as the packaging and textile industries) will be disclosed in detail is the first point to confirm. It is also worth watching how Cosmo Energy’s stated plans to expand into the chemical, textile and packaging industries will take concrete form, and whether other Japanese refiners will announce similar supply chains utilizing SAF by-products.