Cosmo Oil and three Japanese companies have begun a new initiative to use used cooking oil-derived naphtha produced alongside sustainable aviation fuel (SAF) as a feedstock for chemical manufacturing at the Sakai Refinery in Osaka, Japan. The initiative links SAF production with downstream chemicals and polyethylene manufacturing through an ISCC PLUS-certified mass-balance supply chain.
The participating companies are Cosmo Oil, Maruzen Petrochemical, UBE-MARUZEN POLYETHYLENE and SAFFAIRE SKY ENERGY. Under the arrangement, SAFFAIRE SKY ENERGY will produce the used cooking oil-derived naphtha, while Cosmo Oil will supply it to downstream chemical operations using the mass-balance approach. Maruzen Petrochemical will manufacture basic chemicals, with UBE-MARUZEN subsequently producing polyethylene for plastic applications.
From SAF Production to Chemical Feedstock
The naphtha is generated as a co-product of SAF production at the SAFFAIRE SKY ENERGY facility located within Cosmo Oil’s Sakai Refinery. The SAF production unit was completed in December 2024 and began production in fiscal 2025. Cosmo Oil describes it as Japan’s first large-scale facility of its type.
SAFFAIRE SKY ENERGY’s facility uses domestically sourced used cooking oil as its feedstock. The project was developed following a 2021 subsidy from Japan’s New Energy and Industrial Technology Development Organization (NEDO) for establishing a domestic used-cooking-oil-to-bio-jet-fuel supply-chain model.
The facility has an annual SAF production target of approximately 30,000 kilolitres. Its wider business scope also includes the production and sale of bionaphtha and biodiesel derived from domestic used cooking oil.
ISCC Certification Supports Mass-Balance Supply
The naphtha being introduced into the chemical supply chain has obtained certification under the International Sustainability and Carbon Certification (ISCC) framework. The four-company initiative will use the ISCC PLUS mass-balance approach to allocate the environmental attributes of sustainable raw materials through chemical production processes.
Under mass balance, sustainable and fossil-based feedstocks can be processed within an integrated manufacturing system, with the quantity of sustainable material allocated to products according to defined accounting rules. This allows existing chemical manufacturing infrastructure to incorporate certified sustainable feedstock without requiring every stage of production to be physically segregated.
Cosmo Oil, Maruzen Petrochemical and UBE-MARUZEN have each obtained ISCC PLUS certification, according to Cosmo. SAFFAIRE SKY ENERGY’s SAF production base had previously obtained ISCC CORSIA and ISCC EU certifications covering its certified SAF and bionaphtha supply chain.
Linking SAF and the Chemicals Industry
Naphtha is a major feedstock for producing basic chemicals, which are subsequently used across sectors including plastics, packaging and textiles. By directing the SAF process co-product into chemical manufacturing, the companies are seeking to extend the use of domestic biomass-derived resources beyond aviation fuel.
Cosmo said the initiative is intended to reduce the carbon footprint associated with raw materials in chemical production. The participating companies also plan to expand supply volumes and develop additional applications for products incorporating the used cooking oil-derived feedstock.
The development builds on Japan’s broader effort to establish a domestic SAF supply chain based on used cooking oil. Cosmo Oil, JGC Holdings and REVO International established SAFFAIRE SKY ENERGY in 2022, with the objective of producing and supplying domestically made SAF.
Cosmo’s domestic SAF supply chain began supplying Japanese airlines from fiscal 2025, with Japan Airlines and All Nippon Airways among the intended recipients.
Bioenergy Business Analysis
The initiative illustrates how used cooking oil can support value creation across more than one downstream market. Rather than treating the SAF process solely as an aviation-fuel pathway, the companies are incorporating its bionaphtha co-product into an existing chemicals value chain, potentially broadening the industrial applications of the same sustainable feedstock.
For the bioenergy and chemicals sectors, the key issue is the ability to establish credible traceability and certification while integrating sustainable raw materials into existing infrastructure. The use of ISCC PLUS mass balance provides the framework for this initiative, while future expansion will depend on feedstock availability, certified supply volumes and the development of additional end-product applications.
