Japan Will Rely on Biofuel Imports

WASHINGTON - Jun 3/06 - SNS -- Most of Japan's biofuel needs are met by imports and the country sees a good potential in importing ethanol from Brazil, according to a recent report from the U.S. agricultural attache for the country.

Japan now has six feasibility studies underway looking at the potential for production, distribution and use in different locations around the country. In Hokkaido Japan is investigating prospects for converting "non-spec" wheat (not suitable for consumption) and wood waste. In the Okinawa area they are working on conversion of "monster cane" and/or molasses to ethanol.

The sugar subsidy system will be revamped in 2007, abolishing the minimum price moving sugar cane and sugar beet production into different support sectors. In recent years, production of beets has risen while cane has declined. Cane is used in ethanol production in Japan because beet is less efficient.

Sugar cane will have a commodity-specific subsidy while beets will fall under the blanket direct payment. The outlook is for 19 additional facilities to go on line in 2006 and 25 more in 2007. Japan's agriculture ministry (MAFF) believes Japan could only reasonably supply 360,000 kl per year. Meanwhile Ministry of Energy (MOE) officials expect Japan could meet only 10% of the 500,000 kl target with domestic ethanol production.

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