Recently, Japan's three major chemical giants—Asahi Kasei, Mitsui Chemicals, and Mitsubishi Chemical—jointly announced that they will collaborate to advance the decarbonization process of two ethylene plants in western Japan and optimize their production capacity. This initiative aims to address the shrinking domestic ethylene demand, achieve carbon neutrality goals, and enhance industrial competitiveness. Currently, the three companies have signed a basic agreement outlining specific plans for joint venture operations, capacity integration, and decarbonization strategies.

According to the agreement, the three companies plan to establish a new joint venture entity in western Japan to operate the two existing ethylene plants in the region. During the integration process, the ethylene plant operated by Asahi Kasei Mitsubishi Chemical Ethylene in Mizushima will be permanently shut down. This plant has an ethylene production capacity of 496,000 tons per year. The related operations will be fully integrated into the ethylene plant operated by Osaka Petrochemical Industries Ltd. in Takaishi by the fiscal year 2030.

It is reported that the equity ratio of the new joint venture will be reasonably determined based on the respective market shares of the three companies. Data on production capacity shows that the total capacity of the two ethylene plants involved in this integration is 951,000 tons per year. With the shutdown of the Mizushima cracker, the overall capacity after integration will be reduced to 455,000 tons per year, representing a reduction of over 50%.

Industry analysts note that this capacity optimization is a proactive adjustment by Japanese chemical companies to address industry challenges. It aims to phase out inefficient capacity, reduce operational costs, and achieve centralized and efficient utilization of resources.

Alongside the capacity integration, the three companies have simultaneously launched an ethylene decarbonization plan, with a total investment of approximately ¥21.2 billion (approximately ¥963 million RMB). This includes a maximum subsidy of ¥10.4 billion provided by the Japanese government. The subsidy comes from Japan's Ministry of Economy, Trade and Industry's "FY2025 Support Program for Energy and Manufacturing Process Transformation in Hard-to-Abate Sectors," which aims to support process transformation and green upgrades in industries such as chemicals that are difficult to decarbonize.

The core measure of the decarbonization plan is to construct facilities at the former site of Asahi Kasei's Mizushima plant to produce ethylene, propylene, and other green basic chemicals using bioethanol as feedstock. These facilities will employ Asahi Kasei's proprietary Revolefin™ technology, which utilizes ethanol dehydration to produce green chemicals. Compared to traditional petroleum-based ethylene production processes, this technology can reduce the carbon footprint by over 90%. It is expected to reduce carbon dioxide emissions by 506,000 tons annually, equivalent to the annual emissions of nearly 110,000 cars. The facilities are scheduled to commence commercial production in the fiscal year 2034.

After the shutdown of the original ethylene production equipment at the Mizushima plant, it will be promptly dismantled. In addition to constructing green chemical facilities at the site, the three companies will jointly explore other potential uses for the site in the field of carbon neutrality.

It is understood that this collaboration among the three giants is a microcosm of the accelerated reshuffling in Japan's chemical industry. In recent years, due to the continuous decline in domestic ethylene demand in Japan and the rapid expansion of petrochemical capacity in China and other Asian countries, the operating rate of Japan's ethylene crackers has remained below 80% for four consecutive years, far below the 90% breakeven point, putting sustained pressure on the industry's profitability.

Against this backdrop, Japanese chemical companies are accelerating the integration of ethylene facilities, phasing out outdated capacity, and focusing on green transformation. In addition to the collaboration among these three companies, integration efforts in Japan's chemical industry are already in full swing: Idemitsu Kosan and Mitsui Chemicals will integrate ethylene production operations in the Chiba region, including the shutdown of a 370,000-ton-per-year ethylene plant; ENEOS plans to shut down a 448,000-ton-per-year ethylene cracker in the fiscal year 2027; and Maruzen Petrochemical's Chiba ethylene plant will close in 2026, while optimizing the capacity layout of its joint venture Keiyo Ethylene plant with Sumitomo Chemical.

It is reported that these integration efforts will collectively reduce Japan's ethylene production capacity by approximately 1.75 million tons per year, reducing the number of operational ethylene crackers in Japan from 12 to 8 and lowering overall capacity by nearly 30%.

Industry experts state that the integration and decarbonization efforts in Japan's ethylene industry are both a passive adjustment in response to market supply and demand changes and an active strategy aligned with the global trend toward carbon neutrality. Leveraging government policy support and corporate technological advantages, Japan's chemical industry is gradually transitioning toward efficiency, low carbon, and green transformation. The collaboration among these three giants may serve as a reference example for decarbonization and industrial upgrading in the global chemical industry.