Japan’s Cosmo Oil has signed an agreement with the western city of Shimonoseki to collect used cooking oil from households and businesses and convert it into sustainable aviation fuel (SAF), part of a broader push to build a domestic supply chain for low-carbon jet fuel as global demand accelerates.
Cosmo Energy Holdings, parent of Cosmo Oil, is Japan’s third-largest oil refiner, operating three refineries with combined capacity of about 363,000 barrels per day and a nationwide fuel distribution network.
Shimonoseki, located at the western tip of Japan’s main island of Honshu, has a population of roughly 250,000 and serves as a strategic transportation hub between Honshu and Kyushu, with major road, rail and maritime connections.
Under the agreement, Shimonoseki will collect used cooking oil from households and commercial operators, while industry partners will process it into SAF and sell it through Cosmo’s distribution channels.
The collection drive began on 2 February, as household implies people’s homes with plans to expand to supermarkets, community facilities and other collection points.
The project will operate across the entire supply chain from collection and transport to refining and sales, with the oil processed at facilities operated by SAF producer Saffaire Sky Energy and marketed through Cosmo Oil Marketing.
SAF can be produced from non-fossil feedstocks such as waste cooking oil, agricultural residues, municipal waste and algae, and can reduce lifecycle carbon emissions by up to 80 per cent compared with conventional jet fuel, depending on the production method. Fuel derived from used cooking oil is considered among the most commercially viable pathways because the feedstock is already widely available and compatible with existing refinery infrastructure.
“Circulating waste cooking oil as a resource and linking it to aviation fuel requires behavioural change from each citizen,” said Yuki Nishimura, chief operating officer of Saffaire Sky Energy, at the signing ceremony.
Cosmo Oil marketing executive Tadashi Okada said the initiative was designed as a practical example of regional resource recycling within Japan’s transition to a low-carbon economy, particularly in areas designated as early decarbonisation zones by the government.
Japan currently has limited domestic production of SAF, even as airlines face growing pressure from regulators, investors and customers to cut emissions. Most global supply is concentrated in Europe and North America, with several plants in Southeast Asia owned or operated by Western energy companies.
Cosmo began supplying domestically produced SAF in 2025 from a plant at its Sakai refinery near Osaka, built by engineering firm JGC Holdings, with annual output of about 30,000 kilolitres. The company sources used cooking oil from businesses nationwide rather than relying on imported feedstock, a model it says improves energy security and traceability.
Demand for SAF is rising rapidly worldwide as aviation – one of the hardest sectors to decarbonise – faces tightening emissions rules. The European Union introduced a mandate requiring fuel suppliers to blend at least 2 per cent SAF from 2025, rising gradually in the coming decades.
Japan has announced plans to introduce similar supply obligations following discussions between government and industry, with a target for airlines to replace about 10 per cent of conventional jet fuel with SAF by 2030.
Across Asia, governments are accelerating efforts to develop local production capacity to avoid dependence on imported fuel. Singapore has announced a SAF levy on airline tickets to fund adoption from 2026, while South Korea and Thailand are also exploring blending mandates and domestic production incentives.
Oil gathered in Shimonoseki will be processed into SAF and supplied to the aviation market through Cosmo’s existing commercial channels, marking a shift from waste disposal to resource recovery.
The city said they also plan public awareness campaigns to encourage residents and businesses to participate, framing the initiative as a citizen-driven contribution to climate action.
