Toyota Tsusho Corporation ("Toyota Tsusho") and Toho Gas Co., Ltd. ("Toho Gas") announced today that a joint project between the two companies has been selected by the Ministry of Economy, Trade and Industry ("METI") under its FY2025 supplementary budget for its Global South Future-Oriented Co-Creation Project Subsidy Program (Large-Scale Demonstration Projects for Non-ASEAN Countries). Following the project's selection, the companies will begin preparations for a demonstration of biogas production from sugarcane residues, aiming to launch the project in July 2028.

As the largest producer of sugarcane in the world, Brazil is considered to have enormous potential for biogas production. Biogas generated from organic resources (biomass) can use existing city gas infrastructure, so it is expected to become an energy source that not only minimizes additional social costs but contributes to carbon neutrality as well. Within this context, Toyota Tsusho, Toho Gas and Sebigas Cótica Bioenergia Ltda have entered a joint development agreement to conduct a demonstration of biogas production from sugarcane residues in the country. They have been moving forward with studies toward construction and operation of a demonstration plant.

Through this demonstration project, a unique biogas production process using unused sugarcane residues as feedstock will be developed with the aim of increasing biogas production from a single sugar mill (a plant for producing sugar and ethanol from sugarcane). This will be the first time for Toyota Tsusho and Toho Gas to conduct technical verifications with a view to increasing production by utilizing unused residues.
The demonstration plant will be constructed within the premises of a sugar mill operated by the Brazilian partner and will be used to study the potential for large-scale biogas production covering the full production process from feedstock collection to pretreatment and fermentation. With the plant producing 5,000 m3 of biogas per day, the companies will also identify operating conditions and collect various data required for large-scale production.
Toyota Tsusho and Toho Gas will collaborate with Mizuho Bank, Ltd. and Cótica Energia e Participações Ltda. to establish a special purpose company (SPC) in Brazil, with the demonstration project planned to launch in July 2028 and run through to around January 2030.
The companies will use this subsidy program to accelerate their demonstration project and more quickly gather knowledge required for large-scale production. They will also drive efforts with a focus on mobility fuel demand within Brazil, aiming for commercialization of the business with an eye to exporting to Japan in the future as well.

Toyota Tsusho is promoting its Gondwana Economic Zone Strategy, which is built around the growth markets of Africa, India, and South America. Through this demonstration project, it will work to establish a biogas production and supply model in Brazil while envisaging extension of the model in the future to Gondwana Economic Zone countries, which boast significant biomass resources. In doing so, it will contribute to both decarbonization and economic growth.

Toho Gas has established its own goal of achieving carbon neutrality across its entire supply chain by 2050. It is driving carbon reduction measures in the near term and working toward a carbon-neutral energy supply through various means, including biogas. By providing a range of solutions that leverage the technologies and knowledge it has acquired to date, it will work as one with local communities and customers to realize a carbon-neutral society.

Reference 1: Subsidy Program Overview
This subsidy program provides partial support for the cost of large-scale demonstrations conducted by Japanese companies for the purpose of revitalizing markets in Global South countries and strengthening economic ties with Japan.
METI website: https://r7h-gs-hojo-web-lsna.jp/saitaku.html (in Japanese)

Reference 2: Conceptual Image of the Demonstration Plant

Reference 3: Relationship between Brazilian Partner Companies
Sebigas Cótica Bioenergia Ltda. and Cótica Energia e Participações Ltda. are companies within the same corporate group.