Japan's Oenon may produce rice-origin ethanol

Alcoholic beverage maker Oenon Holdings Inc. may produce ethanol from Japanese rice to mix with gasoline, a challenging plan in a country where costly farm produce has kept the usage of green fuels largely at bay.
Tokyo-based Oenon said on Wednesday a five-year project to build and run an ethanol plant in Tomakomai city, located in the southern coast of the northern island of Hokkaido, is awaiting government approval.

The Ministry of Agriculture has set aside 8.5 billion yen ($69.8 million) from its annual budget to promote locally-made green fuels to supplement gasoline for auto use given hefty carbon emissions reduction targets to meet under the Kyoto protocol.

Five other groups have submitted their ethanol plans, waiting for the ministry's decision to be taken with advice from an independent committee by the end of this month as to which project or projects will receive the subsidies, a farm ministry official said.

Japan, the world's second largest gasoline consumer of some 60 million kiloliters (kl) a year, is almost totally dependent on imported fuels, and in 2006 produced only 30 kl of biomass ethanol at government-backed pilot plants.