Japan’s largest oil refiner, Eneos Holdings, has unveiled a new three-year business plan that significantly boosts investments in low-carbon energy, particularly liquefied natural gas (LNG) and sustainable aviation fuel, while taking a step back from earlier ambitions in H₂ and ammonia. The move reflects the company’s recalibrated response to a global energy transition that is proving more complex and slower than previously anticipated.

Under the new plan, which runs through March 2028, Eneos will invest a total of 1.56 trillion yen (approximately $10.7 billion). Of that, 740 billion yen will be strategically allocated to advance low-carbon and decarbonization initiatives. This includes:

• $2.12 B toward low-carbon energy such as LNG
• $1.71 B in decarbonized technologies like renewables and carbon capture
• $1.23 B for oil and chemical operations.

Additionally, 820 billion yen will support the company’s core refinery operations, and up to 1 trillion yen in management reserves may be deployed for further strategic investments, primarily in LNG.

LNG and sustainable fuel in the spotlight. Eneos plans to expand its LNG portfolio, anticipating a steady rise in global demand through at least 2040. "We plan to reinforce and expand our LNG operations as demand is expected to grow through around 2040," said CEO Tomohide Miyata at a press conference.

While Eneos already holds stakes in LNG ventures across Asia, Miyata noted that U.S. projects, such as the Alaska LNG initiative, could be explored—provided they demonstrate favorable economic conditions. The company is also investing in sustainable aviation fuel as part of its long-term low-carbon energy goals.

Caution on H₂ and energy transition delays. Marking a major shift, Eneos has dropped its previous goal of supplying 4 million metric tons of H₂ by fiscal 2040. Miyata explained the company’s decision by pointing to a slower-than-expected global shift toward carbon neutrality.

“The trend toward a carbon-neutral society is slowing, and the full-scale bifurcation of the energy transition, previously expected around 2030, may be delayed,” he said. Eneos is opting for a measured pace in advancing H₂ and ammonia ventures, reflecting rising costs, geopolitical uncertainties, and increasing concerns over energy security.

Despite the forward-looking investments, Eneos is navigating financial headwinds. The company reported a 22% drop in net profit for the fiscal year ending March 31 and is projecting an additional 18% decline in the current fiscal year. In response, it aims to raise its refinery utilization rate—excluding scheduled maintenance—from 78% in fiscal 2024 to 90% by fiscal 2027.

Eneos Holdings’ latest business strategy underscores a pragmatic evolution in its energy outlook. While reaffirming commitment to the energy transition, the company is redirecting its resources toward mature and scalable low-carbon technologies like LNG and stepping back from H₂ in the face of current market and policy uncertainties. This recalibrated path aims to balance the long-term goals of decarbonization with the short-term imperative of ensuring energy affordability and security.

Source: Reuters

For the original story, visit: https://www.reuters.com/sustainability/climate-energy/japans-eneos-ramp-up-investment-lng-saf-while-slowing-hydrogen-2025-05-12/