Japan to waive fuel taxes for biofuels; 132 Mgy consumption target for 2010 proves daunting

In Japan, fuel excise taxes are expected to be waived on biofuels as of April 2008 in a new scheme to reduce Japanese dependence on oil.

For blended fuels, taxes would be reduced in proportion to the amount of biofuels blended.

Japan has set a goal of 132 million gallons of biodiesel by 2010, with a domestic production goal of 800 Mgy by 2030. To reach this goal, the government has formed a council of government units, universities and companies including Nippon Oil and Toyota to develop for reducing the cost of ethanol production.

The Japanese government has set a goal of replacing 0.6 percent of gasoline fuel with biofuels by 2010. The E3 ethanol mandate recently led to the introduction of two pumps in Osaka as Japan finally begins to rollout its biofuels mandate.

In August, Mitsubishi announced plans for 500 million gallons in ethanol production capacity by 2017 as Japan ramps up on its biofuels conversion. Also, the Ministry of Economy, Trade and Industry announced a goal of producing ethanol from silver grass at a cost of 40 yen per liter. Current Japanese technologies produce ethanol from celluosic biomass at a cost of 2,000 yen per liter.

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