Japan’s MUFG Bank to fund US-based SAF firm LanzaJet

Japanese megabank MUFG Bank plans to finance US sustainable aviation fuel (SAF) firm LanzaJet, as it expects global SAF demand to rise given the aviation sector's efforts to decarbonise.

MUFG said on 26 June that it will provide over ¥1bn ($6.3mn) to promote LanzaJet's alcohol-to-jet (AtJ) technology, scale up SAF production plants and develop a supply chain of its feedstocks. The companies on 21 June signed an agreement, through which MUFG may secure up to a 5pc stake in the US firm.

MUFG is looking to take advantage of expected rises in SAF demand and relevant financial support needs. The company has forecast global funding requirements for SAF businesses to reach ¥1 trillion by 2030.

LanzaJet in January opened its first SAF facility in the US state of Georgia, which produces 9mn USG/yr (652 b/d) through its AtJ technology using sugarcane-based ethanol. The low-carbon aviation fuel could reduce greenhouse gas emissions by 80pc relative to conventional jet fuel.

MUFG plans to create new SAF projects in Japan through the latest deal, by leveraging on LanzaJet's AtJ process. The country's SAF demand is forecast to increase to around 1.72mn kl in 2030, comprising 880,000kl for domestic flights and 840,000kl for international flights. Tokyo will mandate that SAF has to account for at least 10pc of domestic airlines' jet fuel consumption by 2030.

Japanese trading house Mitsu, one of LanzaJet's founding investors, and refiner Cosmo Oil are planning to produce SAF through the LanzaJet's AtJ technology. The companies are targeting production of 220,000kl of SAF and 20,000kl of biodiesel, which is a by-product of SAF, by the April 2027-March 2028 fiscal year.

By Motoko Hasegawa