Toyota is advancing an alternative route to transport decarbonisation by investing in sustainable bioethanol, signalling a long-term strategy to reduce emissions from internal combustion engines without abandoning them entirely.
In partnership with other Japanese manufacturers, the company has launched a pilot facility in Fukushima Prefecture to produce second-generation bioethanol from non-edible biomass.
The plant is designed to generate around 60 kilolitres of ethanol annually, and uses agricultural residues such as rice straw and forestry by-products.
This approach enables the use of otherwise marginal land and waste streams.
Toyota's new fermentation technology is central to the initiative. It utilises engineered yeast strains to convert fibrous plant material into ethanol more efficiently.
The result is a higher fuel yield with lower energy input and reduced emissions across the production process.
The selection of Fukushima as the site for the facility carries both symbolic and practical weight. It reflects a broader national effort to revitalise regions affected by the 2011 nuclear disaster, integrating clean energy projects into long-term recovery and industrial strategy.
This localisation of biofuel production also supports Japan’s energy security ambitions by reducing reliance on imported ethanol from Brazil and the United States.
Globally, the project coincides with evolving transport policy. In Europe, while the 2035 ban on internal combustion vehicles is progressing, an exemption allows new combustion models to be sold if they run exclusively on carbon-neutral fuels.
This recognises that over 250 million combustion vehicles will remain on European roads for years to come, and that low-carbon fuels could play a critical role in reducing their environmental impact.
Japan, by contrast, is pursuing a more incremental approach, aiming to introduce E10 fuel by 2028 and scale up to E20 blends by the early 2030s. The long-term target is to make 20% ethanol blends widely available by 2040.
The output of Toyota's pilot facility is modest and significant investment would be needed to scale production to commercial levels.
Toyota develops biomass-based bioethanol to support low-carbon fleet transition
