Late in 2024, Japan achieved a significant milestone: completing an entire synthetic fuels value chain, from renewable electricity to usable synthetic gasoline and diesel. This achievement, trumpeted by Japan’s largest refiner, ENEOS, sought to confirm the national strategy to bet on synthetic liquids – rather than electrification – as the longterm future of transport fuel.

Transport accounts for a sixth of Japan’s emissions, and over a fifth of the world’s. Pathways to decarbonize auto, shipping and aviation transport vary, but they could be roughly split into those that seek to swap petroleum molecules for cleaner-burning liquids and those that want to replace the energy source entirely to electrons via batteries, etc.

Among the main supporters of the latter electron route is China, which has built a comprehensive and near-dominant supply chain in batteries, and is on its way to controlling the electric vehicles (EV) niche. Japanese automakers, however, have been reluctant to turn fully to electrons for both social and strategic reasons. As such, Japan’s strategy for cleaner transport emphasizes drop-in alternatives to petroleum products, such as biofuels and synthetic fuels, also known as e-fuels.