Asahi Kasei, Mitsubishi Chemical to Integrate Olefins Business, Shut Down Cracker

Mitsubishi Chemical Group, Asahi Kasei Corporation, and Mitsui Chemicals, Inc. have announced plans to establish a new joint operating entity to manage two ethylene production facilities in western Japan. As part of a comprehensive operational reform, the companies will close the Asahi Kasei Mitsubishi Chemical Ethylene steam cracker in Mizushima and integrate the Osaka Petrochemical Industries Co., Ltd. cracker in Takaishi, targeting completion by the end of fiscal year 2031 to March 2032.

The equity stake in the new joint venture will be determined based on the volume of shares purchased by each company. Prior to the merger, the combined ethylene production capacity of these facilities was 951,000 tons per year, but this will decrease to 455,000 tons per year following the closure of the Mizushima cracker.

These companies will launch a separate but related decarbonization initiative: leveraging the Ministry of Economy, Trade and Industry’s (METI) hard-to-abate industry support program. An initial facility using Asahi Kasei’s proprietary Revolefin technology, which is designed to produce ethylene, propylene, and other decarbonized basic chemicals from bio-ethanol, will be installed at the Mizushima site. Following equipment and process verification, joint commercial production of decarbonized chemicals is scheduled to begin in fiscal year 2034.

The project is estimated to cost RMB 21.2 billion (approximately USD 1.375 billion), with a maximum subsidy of RMB 10.4 billion.

To facilitate the transition, equipment modifications will be carried out at the Mizushima and Chiba sites. The Mizushima ethylene plant and related infrastructure will be promptly dismantled following the cessation of production, and the three companies will jointly explore opportunities to utilize the vacated site to further promote carbon neutrality.

According to these companies, as the industry faces increasing pressure to reduce greenhouse gas emissions and achieve carbon neutrality, collaboration between neighboring manufacturers has become essential.

To date, three cracker shutdowns have been announced in Japan due to overcapacity, by Maruzen Petrochemical, Eneos, and Idemitsu Kosan, respectively. All are located in the eastern part of the country. The Mizushima cracker shutdown will increase Japan's total ethylene closure capacity from approximately 1.3 million tons per year (MMt/y) to approximately 1.8 million tons per year.