Japanese steelmaker JFE Steel, speciality chemicals manufacturer Mitsubishi Gas Chemical, and diversified chemicals company Mitsubishi Chemical have linked up to develop a process to turn steelmaking by-product gases into methanol, which could then be used to manufacture propylene and other key chemicals.
The project will take place at the Mizushima Complex in Kurashiki City, a dense industrial hub housing all three companies in Japan. The objective is to deliver a working demonstration plant by 2026.
JFE Steel will supply by-product gases, such as carbon monoxide, carbon dioxide and hydrogen, from its steelmaking operations, while Mitsubishi Gas Chemical will construct a demonstration plant to produce methanol from these gases. Mitsubishi Chemical will then look towards using this methanol to produce propylene, which is a plastic feedstock used in the manufacture of packaging, textiles and automotive parts.
The project targets hard-to-abate emissions in steel and chemical production – two sectors that together account for around 20% of global CO2 emissions. The aim is to establish a replicable carbon recycling model across sectors.
The companies described the project as an example of “collaborative CO2 utilisation” that could offer a pathway to decarbonising Japan’s industrial sector by reducing reliance on fossil-based raw materials.
Methanol has increasingly drawn interest as a carbon-neutral feedstock and marine fuel. With the methanol-to-olefin process seen as a potential route to lowering greenhouse gas emissions from plastics manufacturing, the project adds momentum to Japan’s broader carbon neutrality ambitions, set out under its 2050 Net Zero target.
These include industrial decarbonisation strategies such as the Green Transformation initiative and public-private investments in carbon recycling technologies, hydrogen and ammonia. Other efforts include the development of the Fukushima Hydrogen Energy Research Field and national support for low-carbon fuels in sectors like shipping and chemicals.
