Japanese partners weigh shuttering one of two jointly held ethylene plants

Idemitsu Kosan Co. Ltd. and Mitsui Chemicals Inc. are studying options for consolidating 50-50 joint venture Chiba Chemicals Manufacturing LLP’s (CCM) dual-site ethylene production operations located at the parent companies’ separate manufacturing complexes in Ichihara, Chiba, Japan.

Still in preliminary development and contingent upon a formal feasibility study, the proposed consolidation currently would occur during fiscal-year 2027 and involve closing a 370,000-tonne/year (tpy) ethylene unit housed at Idemitsu Kosan’s integrated 190,000-b/d integrated refining and petrochemicals complex, the partners said in late March.

The companies said they would continue to jointly operate the 550,000-tpy ethylene production unit at Mitsui Chemicals’ Ichihara manufacturing site under the existing CCM partnership, a new joint venture (JV), or some other yet-to-be-identified arrangement.

The partners’ decision to evaluate the proposed rationalization program comes amid increased pressure from startup of larger and newer petrochemical complexes—mainly in China—that is forcing Japanese ethylene complexes to run at lower rates, as well as Japan’s diminishing domestic demand for ethylene, the companies said.

Powerful calls for operators to step up efforts to build next-generation industrial complexes aimed at reducing carbon dioxide (CO₂) emissions and promoting circular resources in line with the global push to achieve carbon-neutral societies also have factored into the proposed rationalization plan, the Japanese partners said.

The companies said any future strategy by the partnership would include works to increase sustainability, expand low-carbon offerings, and grow opportunities for supporting circular use of resources in line with the net-zero 2050 target.

“For a feedstock in the consolidated ethylene facility, we will consider shifting away from conventional fossil-derived naphtha to bio-naphtha generated as a byproduct of our sustainable aviation fuel (SAF) business, as well as naphtha derived from chemical recycling of used plastic at a facility scheduled to begin operation in [fiscal-year] 2025,” said Shunichi Kito, Idemitsu Kosan’s president and chief executive officer (CEO).

“In conjunction with these efforts, we aim to build a new green-chemicals supply chain that also encompasses bio-ethylene produced from bio-ethanol—which is used as a feedstock for SAF—and synthetic chemicals made from e-methanol,” Kito said.

The proposed CCM consolidation also would go “beyond simply bolstering competitiveness via the optimization of production at [Mitsui Chemicals’] Chiba ethylene complex,” said Osamu Hashimoto, the company’s president and chief executive officer. 

“Further regional cooperation and the expansion of partnerships with other companies will make it a crucial step toward industrial complex transformation based on the twin-pronged approach of enhanced competitiveness and a shift to green chemicals,” Hashimoto said.

According to Hashimoto, Mitsui Chemicals would use the opportunity to expand “development of a competitive and sustainable green chemicals business by creating added value via the shift to green chemicals and unremitting efforts to increase capital efficiency.”

While the partners confirmed a final decision on and definitive timing of the CCM consolidation project would occur following completion of the feasibility study, the companies did not reveal a more specific timeframe for when that would occur.

Plastics recycling plant

Idemitsu Kosan took final investment decision (FID) in April 2023 to build the proposed plant for recycling oil-based chemicals—which will process 20,000 tpy of used plastics—on a site adjacent to the operator’s Chiba complex, the company said.

To be operated by Chemical Recycle Japan Co. Ltd.—a JV of Idemitsu Kosan and Kankyo Energy Co. Ltd.—the plant will use its own novel technology to process the used plastics into a feedstock oil that Idemitsu can subsequently process in its existing Chiba refining and chemical units as a replacement for conventional crude feedstock to produce renewable chemicals as raw materials for plastics manufacturers.

On track for commissioning in 2025, Idemitsu Kosan said the plastics recycling plant comes as part of its net-zero 2050 journey to help reduce CO₂ emissions from more than 4 million tpy of Japan’s difficult-to-recycle used plastics that are incinerated via thermal recycling.

Following startup of the Chiba plant, Idemitsu Kosan said it plans to install similar plants at the company’s other Japanese refineries, as well as develop a larger-scale business targeting similar recycling of hard-to-recycle plastics nationwide.