Refiners in Japan suffering because of the COVID-19 pandemic plan to sell assets and speed structural reform and overseas expansion.
This is because fuel demand is expected to fall at a faster pace due to a prolonged impact from the pandemic and an accelerating global decarbonisation trend.
Refiners Eneos Holdings and Idemitsu Kosan have been forced to downgrade their profit goals for the three years to March 2023.
Idemitsu president Shunichi Kito said: “There has been a significant environmental change since 2019, with the unprecedented coronavirus crisis, green recovery and Japan’s declaration of becoming carbon neutral.”
Speaking at a news conference, he added: “We have taken a much harder look at future scenario.” Kito pointed to a revised estimate of domestic fossil fuel demand contracting 30 percent by 2030 from 2019 levels, instead of its 2019 assumption of 20 percent.
Eneos plans to exit coal mining by selling stakes in mines in Canada and Australia, and will scale down its upstream oil assets. Idemitsu said it will also downsize its coal assets by cutting out investments in new projects.
With regards to structural reform both firms will shift away from coal and oil to renewable energy and cleaner fuels such as hydrogen, while beefing up their overseas operations in Asia.
Eneos president Katsuyuki Ota said: “Our goal is to provide clean energy through a new energy management system using renewable energy with storage battery and electric vehicles (EVs), and to supply CO2-free hydrogen and synthetic fuels using cheaper renewable power to be generated abroad.”
For more information visit www.hd.eneos.co.jp
