Japan’s largest oil refiner, Eneos Holdings, said it plans to buy Japan Renewable Energy for 200 billion yen (US$1.8 billion) from Goldman Sachs and Singapore’s sovereign wealth fund GIC. The deal will mark the first major purchase by Japan’s most powerful oil company of a renewable energy company, coinciding with Eneos’ move away from reliance on fossil fuels.
Founded in 2012, Japan Renewable develops and shapes renewable energy assets, with 419 MW of operating capacity from sun, wind and biomass, with an additional 410 MW under construction, also an Eneos spokesperson said the company had been considering several options to expand its renewable energy business but had not made a final decision yet.
Like their counterparts abroad such as Royal Dutch Shell, Japanese oil companies are seeking to shift into new areas, especially after the Tokyo government reinforced its commitments to reduce carbon emissions that lead to rising temperatures, like other countries.
The Japan Renewable website has some financial details, but with its relatively small scale, a potential acquisition would likely not represent an immediate contribution to Eneos’ annual 10 trillion yen ($90 billion) sales. However, it does indicate the company’s intention to start moving away from fossil fuels at a time when the transition to renewable energies within the energy production sector is accelerating.
Eneos controls half of the market for gasoline and other fuels in Japan, but has seen its customer base shrink for several years due to declining populations and a preference for newer energy types.