Toyota R&D Unit, Hitachi Join Japan Study Into Making Algae Motor Fuel

Toyota Motor Corp.’s research and development unit, Hitachi Ltd. and more than 40 other Japanese companies and institutions have joined a national study into algae’s potential for producing biofuel and chemicals.

Autoparts maker Denso Corp., refiners Nippon Oil Corp. and Idemitsu Kosan Co. and soy sauce maker Kikkoman Corp. will also join the study led by Tsukuba University into producing motor fuel, cosmetics and food from the microorganisms, according to a joint statement released at Tsukuba City near Tokyo today.

Japan abandoned a $132 million algae project in the 1990s, when oil prices dropped below $10 a barrel and climate change took a back seat to promoting economic growth during the country’s “Lost Decade.” Now oil majors led by Exxon Mobil Corp. are turning to the experimental technology as pressure grows to find less-polluting alternatives to crude oil.

“A tug of war may begin among industrial nations for a new way of making algae-derived fuel in the years ahead,” Hidetoshi Shioda, a senior energy analyst at Mizuho Securities Co. in Tokyo, said before the announcement. “Japan may need strong political leadership to compete for algae-oil hegemony.”

At least 75 developers globally are studying algae, which has the potential to generate more energy per hectare than any other crop used for making fuel, according to a Bloomberg New Energy Finance report in February. The technology has attracted the U.S. Department of Energy and companies including Exxon Mobil Corp., which plans to spend as much as $600 million on research over five years.

Denso, which is more than 20 percent-owned by Toyota, has joined Keio University to research pseudochoricystis algae, organisms that live in ponds and hot springs and produce starches containing a diesel component, Denso said on its website.

The KAITEKI institute, a research unit of Mitsubishi Chemical Holdings Corp., joined the University of California, Los Angeles, to develop a way to produce ethanol using microalgae and carbon dioxide, the institute said on May 7.

To contact the reporter on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.