Japan sees biodiesel boost with new fuel standards

TOKYO (Reuters) – Japan, the world’s third-largest oil consumer, will set out nationwide biodiesel standards this year in an effort to kick-start demand, but will not force refiners to sell it, government officials said on Thursday.

Lagging international moves to use more biofuel to battle soaring crude oil prices and help ease global warming, Japan hopes the law — allowing about 5 percent of fatty acid-derived fuel in diesel — will spur more sales of green fuels made from renewable sources such as soybeans and sugar.

Given gasoline-oriented Japan’s limited diesel consumption and lack of incentives, however, the take-up from consumers and refiners is likely to be tepid at first, officials conceded.

“The legislation is expected to be passed by the end of this year, and the law will become effective by the end of this fiscal year (to March 2007),” an official at the Agency for Natural Resources and Energy, a unit of the trade ministry, told Reuters.

Reuters