The policy framework
In March 2021, MLIT established the Council for CO2 Reduction in the Aviation Operations Sector. By December 2022, the council produced the Basic Policy for Promoting Decarbonization in Aviation, which set the 10% SAF target for 2030.
The target applies to all jet fuel consumed by Japanese airlines on both domestic and international routes. At Japan's current consumption of approximately 14 million kilolitres per year, 10% represents roughly 1.4 million kilolitres (about 1.1 million tonnes) of SAF demand annually by 2030.
Two-track approach: airlines and refiners
Demand side: airlines
Japanese airlines (ANA, JAL, and smaller carriers) are expected to procure SAF volumes to meet the 10% target. Both ANA and JAL have signed multiple offtake agreements with SAF producers globally, including Neste (Finland), World Energy (US), and domestic projects.
Supply side: oil wholesalers
Under the Act on the Sophistication of Energy Supply Structures, oil wholesalers producing 100,000+ kilolitres of jet fuel annually must supply SAF equivalent to at least 5% of the GHG emissions from their 2019 jet fuel production. This supply-side target was approved by the Decarbonized Fuel Policy Subcommittee in September 2024.
The dual obligation creates a guaranteed floor for both supply and demand. Refiners must produce or procure SAF; airlines must buy it.
Current supply reality
| Producer | Technology | Status | Capacity |
|---|---|---|---|
| ENEOS | HEFA (co-processing) | First delivery Q1 2025 | Not disclosed |
| Idemitsu Kosan | ATJ (ethanol-based) | Pilot | Small-scale |
| IHI / Cosmo Oil | Microalgae | R&D | Pre-commercial |
| JERA / Topsoe | Power-to-Liquid | Feasibility | TBD |
Domestic production is nowhere near 1.1 Mt/year. The gap will be filled by imports, primarily HEFA SAF from Singapore (Neste), the US (World Energy, Montana Renewables), and potentially the Middle East.
Japan's 10% target creates 1.1 Mt/year of demand by 2030. Domestic supply covers a fraction. The import opportunity for global SAF producers is enormous.
How Japan compares to other APAC mandates
| Country | Target | Start | Mechanism |
|---|---|---|---|
| Japan | 10% | 2030 | Policy target + refiner obligation |
| Singapore | 1% | 2026 | Levy-based (CAAS) |
| South Korea | 1% | 2027 | Blending mandate |
| India | 1% | 2027 (proposed) | National Biofuel Board |
Japan's 10% target is by far the most ambitious in the region. Singapore and Korea start earlier but at 1%. India's mandate is still under discussion. Together, APAC mandates could create 2-3 Mt/year of SAF demand by 2030.
Implications for producers
- HEFA dominates the near term. Japan's refiners will co-process UCO and tallow at existing facilities. Import volumes will be HEFA from established producers.
- ATJ has a domestic path. Japan's ethanol import infrastructure and Idemitsu's ATJ pilot suggest alcohol-to-jet could capture meaningful share by 2028-2030.
- PtL is the long game. Japan's cheap renewable electricity from offshore wind (Round 1 auctions completed) could underpin domestic PtL, but at commercial scale this is a 2030+ story.
- Certification matters. Japan accepts ISCC and RSB certified SAF. Producers targeting the Japanese market should ensure their supply chain is certified under one of these schemes.
Implications for airlines
Japanese carriers face dual pressure: the domestic 10% target and CORSIA Phase 2 (mandatory from 2027). SAF procured for the Japanese mandate also reduces CORSIA offsetting obligations.
Airlines operating routes to/from Japan (European and US carriers) should model the impact on fuel costs. If Japanese airports require SAF uplift, the cost premium will affect all carriers using those airports, not just Japanese airlines.
What to watch
- Enforcement mechanism. The 10% target is currently a policy goal, not a legally binding mandate with penalties. Whether it becomes binding law (like ReFuelEU) will determine compliance urgency.
- Import infrastructure. SAF import terminals, blending facilities, and logistics at Narita, Haneda, and Kansai airports need investment.
- Price pass-through. How the SAF premium is allocated between airlines, airports, and passengers will shape market dynamics.
- Domestic production scale-up. ENEOS's commercial volumes and Idemitsu's ATJ scale-up are the bellwethers.
For real-time tracking of Japan's mandate alongside 19 other global SAF regulations, see our regulatory tracker.