Japan Signs Multiyear Contract to Buy Bioethanol From Brazil

By Megumi Yamanaka

Oct. 8 (Bloomberg) -- Nippon Oil Corp. and nine other Japanese refiners have sealed a multiyear contract to import bio- ethanol from Brazil as part of efforts to cut emissions of greenhouse gases and reduce dependence on costly oil.

Japan Biofuels Supply LLP, a venture by the refiners, will purchase about 200,000 kiloliters of bioethanol a year from the South American country, the world's largest producer of the alternative fuel, the company said in a statement today.

The Japanese government said yesterday it is considering revising an existing law to require oil, power and gas companies to meet numerical targets for using alternative energy. Japanese refiners have already agreed to raise the amount of bioethanol they blend with gasoline from about 7,000 kiloliters in the year started April to 360,000 kiloliters in fiscal 2010, according to the Petroleum Association of Japan.

The import deal, first agreed by former Japanese trade minister Akira Amari in a meeting with his counterpart Miguel Jorge in July, will help Japan meet a target to cut emissions by as much as 80 percent by 2050.

It will also help reduce reliance on crude oil, which is trading at almost three times its value five years ago and touched an all-time high of $147.27 a barrel on July 11. Oil in New York declined 0.5 percent to trade at $89.59 in after-hours trading in Tokyo at 10:44 a.m.

To contact the reporters on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net.