Decarbonization Efforts in Japan and Abroad— Nisshin OilliO, JFE Engineering, and Kawasaki Heavy Industries Are Advancing on a Journey toward Becoming “Hydrogen Ready”
The Nisshin OilliO Group (“Nisshin OilliO”), JFE Engineering Corporation (“JFE Engineering”), and Kawasaki Heavy Industries, Ltd. (“Kawasaki”) have built a partnership over the past ten years that has now entered a new stage. In April 2025, a hydrogen co-firing compatible cogeneration system (CGS) began operations at Nisshin OilliO’s Yokohama Isogo Complex. The system is currently operating efficiently using city gas while being prepared for a “hydrogen ready” state—in which the system can immediately switch to hydrogen co-firing once a hydrogen infrastructure is in place. This challenging project ranges from diverse initiatives in Japan and overseas to a space-efficient, multi-unit, two-story layout that is rare for eight MW-class systems, as well as the transformation of a manual control culture. In this article, we explore how the three companies took on the project from their different perspectives.
Efforts to achieve Nisshin OilliO’s vision of “hydrogen ready”
Our objective is to co-create new food functions, leveraging The Natural Power of Plants and the strengths obtained from mastering oils & fats. We shall strive to generate diverse values and deliver Energy for Living to everyone.” Under this slogan, Nisshin OilliO combines plant-based raw materials with its oil and fat technologies to create products that offer new value and promote health.
The process of extracting oil from raw materials and refining it into edible oils requires a large amount of heat energy. In an industry where heat consumption is just as high as electricity consumption, decarbonization is particularly challenging. How can carbon neutrality be achieved in such an environment?
We spoke with Mr. Takashi Miura, Senior Engineer, Environmental Solutions of Nisshin OilliO.
“As our manufacturing processes require a significant amount of heat, advancing decarbonization depends on our ability to generate and utilize heat efficiently. To reach a fundamental solution for decarbonization, fuel conversion is essential.”
Nisshin OilliO’s decarbonization strategy is built on three key pillars: the steady accumulation of annual energy savings of 1%, the introduction of cogeneration systems, and an increased share of non-fossil energy sources. We are advancing our initiatives in alignment with these pillars.
With carbon neutrality by 2050 as our ultimate goal, we have set a 50% reduction in greenhouse gas emissions by 2030 as an interim milestone.
Among these strategies, the steady accumulation of 1% annual energy savings is the most important. However, for a company like ours that consumes large amounts of heat, the utilization of cogeneration systems (CGS) is also critical.
Accordingly, in addition to installing new CGS at two plants of Intercontinental Specialty Fats Sdn. Bhd. (“ISF”), we have introduced hydrogen co-firing CGS at the Yokohama Isogo Plant and are advancing preparations toward becoming hydrogen-ready.
In its approach to utilizing cogeneration systems (CGS), Nisshin OilliO has developed different strategies tailored to the specific conditions of each regional environment.
At the Nagoya Plant and ISF, cogeneration systems (CGS) were introduced from the perspectives of stability and efficiency in energy supply.
Furthermore, at the Yokohama Isogo Complex hydrogen, co-firing CGS was adopted, taking into account not only the establishment of a sustainable energy supply system for the future but also the potential for further development through the use of next-generation fuels.
Nisshin OilliO is promoting the utilization of cogeneration systems (CGS) by capitalizing on their four key strengths—stability, efficiency, sustainability, and scalability—and deploying systems optimized for regional conditions.
With a group-wide commitment, Nisshin OilliO is promoting local production and consumption of energy through the introduction of CGS, while also taking on the challenge of next-generation energy in pursuit of achieving carbon neutrality by 2050.
Selecting an optimal CGS model for efficiency and stability at ISF
ISF, a Group company of Nisshin OilliO based in Malaysia operates two plants―the Port Klang Plant and the Dengkil Plant―located approximately 50 km west and south of Kuala Lumpur, respectively. In Malaysia, where the CO2 emission factor for electricity is higher than in Japan, emissions can increase significantly even with modest electricity use.
To address this issue, ISF introduced a natural gas-fueled CGS with a lower emission factor and that can efficiently supply both electricity and steam. ISF Assistant Manager Mr. Tanaka noted a constraint: “In these areas, reverse power flow (selling excess electricity back to the grid) is not permitted.” Therefore, taking future expansion into account, ISF installed an eight MW-class unit at Port Klang and a five MW-class unit at Dengkil. At both plants, ISF intentionally selected sizes that were slightly smaller than their projected electricity needs to avoid surplus generation. The systems use the latest technology to achieve high efficiency while ensuring sufficient supply capacity in addition to backup power, thereby stabilizing power supply.
Seeking company-wide optimization in Japan
Meanwhile, the Yokohama Isogo Complex requires an extremely large amount of heat energy for processing oil such as oil extraction. Since reverse power flow is allowed here, Engineer Miura explains that “it is crucial to select the output range of the CGS unit based on heat demand and use that heat as efficiently as possible.”
Manager Ryo Ota of the Power Producer and Supplier Division at JFE Engineering provides a recollection.
“Nisshin OilliO had been working on energy-saving measures at each of its plants for a long time, so the challenge was finding ways to achieve even greater results. That led to a more fundamental question: could we optimize the entire energy supply system across the company?”
Discussions began in 2015, and resulted in the development of “JFE-METS” (Multisite Energy Total Service). We intentionally installed large CGS units at the Yokohama Isogo Complex and the Nagoya Plant, where heat demand is high, and any electricity that remains after being consumed at the plants is supplied to other sites. This approach was based on a reversal of conventional thinking, enabling company-wide optimization by connecting the group through an energy network. Nisshin OilliO was the first company to adopt this scheme, which JFE Engineering later turned into the JFE-METS service.
Why Kawasaki’s CGS was selected
At the core of JFE-METS lies Kawasaki’s CGS, called “PUC80D.” In December 2018, an eight MW unit first began operation at the Nagoya Plant.
“After comparing models from many companies, we found that Kawasaki’s CGS offered the highest efficiency, including for heat. Also, the lineup of output ranges matched Nisshin OilliO’s demand level.”
In April 2020, the system was also installed at the Yokohama Isogo Plant. It performed beyond expectations and operated stably with no issues at the Nagoya Plant, thus establishing strong trust in Kawasaki .
The staff at the plants were surprised by the fast startup time. Mr. Shinya Yamamoto, Chief of the Extraction Section at the Yokohama Isogo Complex, explains.
“The previous CGS took over 30 minutes to start generating power, so we were always left waiting. Kawasaki ’s CGS starts generating power within a few minutes to just over ten minutes. It is also very easy to handle from an operational standpoint.”
A two-story layout rarely seen in Japan and overseas, designed for expandability and sustainability
The technical challenges went beyond specifications. At the Yokohama Isogo Complex, a unique two-story layout was used to secure space for next-generation upgrades of future equipment in a small area.
Energy Solution & Marine Engineering Company Director Mr. Nobuyuki Oka spoke about this challenge.
“We installed two units side by side with a gas turbine each on the first floor and a heat recovery steam generator on the second floor, mounted on independent three-dimensional frames. This layout is extremely rare, even globally. Unit 4, which was installed in 2025, was has been designed entirely with a future transition to hydrogen co-firing in mind, from layout and piping to equipment selection.”
Incorporating space for future changes from the outset enables Nisshin OilliO to achieve the focus areas of “expandability” to adapt to next-generation technology and decarbonization (hydrogen) as well as “sustainability” through securing space for future upgrades.
The practical solution of the “hydrogen ready” concept—three companies’ determination
The Isogo Unit 4 is fundamentally different from conventional units because it is designed for hydrogen co-firing. Although it currently uses city gas, the system is pre-configured for future hydrogen use. This is the “hydrogen ready” concept.
However, recalls Manager Ota, achieving this was not easy.
“When we began investigating hydrogen co-firing specifications, we struggled to determine how much to invest in something that would not be used immediately. We had no clear benchmarks to base our decisions on.”
The breakthrough came from clarifying the concept, led by Engineer Mimura.
“We incorporated anything that would require major future modifications into the specifications. Equipment that can simply be added later will be installed when needed. In other words, we presented specifications that avoid double investment while enabling a seamless transition to hydrogen co-firing in the future.”
“Once we were presented with that approach, we were able to determine the specifications much more smoothly.
The current system is already capable of 30% hydrogen co-firing, ensuring the foundation for future expansion.
Director Oka explains the advantages and merits of the "PUC80D," which is key to achieving “hydrogen ready.”
With 30% hydrogen co-firing, the PUC80D achieves optimal burner distribution through its DLE combustor*1 according to the hydrogen co-firing ratio, enabling co-firing without changing the combustor. This allows for an additional 16% in energy savings and CO2 emission reduction compared to natural gas firing. Furthermore, when increasing the hydrogen co-firing ratio in the future, we can switch to the Micromix (MMX) combustor*2 currently under development for the PUC80D instead of switching to a diffusion combustor. This is expected to provide less NOx emissions and lower running costs than a diffusion combustor.”
Overcoming post COVID-19 cost increases and the barrier of a long-standing manual control culture
However, as the three companies moved to introduce the PUC80D, they faced two major challenges.
The first was rising costs. Following the COVID-19 pandemic, construction material prices surged, significantly exceeding the initial estimate. Mr. Hideki Motooka,*3 who was in charge of sales at Kawasaki, looks back on that time.
(Currently on secondment to CHP Promotion Department, Advanced Cogeneration and Energy Utilization Center JAPAN as of March 2026)
“Having worked with JFE Engineering on CGS at Nisshin OilliO’s Nagoya Plant and Isogo Unit 3, we developed a shared understanding of equipment costs. However, for Isogo Unit 4, material and construction costs rose significantly due to the COVID-19 pandemic. To keep costs down, we proposed a joint venture approach where Kawasaki handled equipment manufacturing and commissioning, while IBIDEN Engineering Co., Ltd., handled the installation.”
This approach is uncommon in private CGS projects, and it demonstrated Kawasaki’s determination to move the project forward.
The second challenge was the shift to full automation, which required rethinking the control approach. At the Yokohama Isogo Plant, semi-automated control with precise manual adjustments has long been the norm, supported by the expertise of experienced operators. Therefore, changing the approach meant challenging the pride of on-site workers.
“At first, it took courage to change the established mindset,” recalls Chief Yamamoto. However, as the new approach proved itself, the mindset of on-site workers gradually shifted toward fully automated, load-following operations. This transformation was underpinned by a decade-long partnership.
“In the planning phase of Unit 3, we carefully examined and streamlined the necessary controls. This gave Nisshin OilliO confidence that proceeding with automation would not pose any issues. For Unit 4, Nisshin OilliO asked us to proceed based on that approach, which allowed us to further refine the control system and make it even easier to use.”
“Thanks to the technologies of JFE Engineering and Kawasaki, we can now control the system much more simply. The key point in this project was operating and controlling two units simultaneously.” This highlights how the collaboration between the three companies helped update the knowledge of on-site workers.”
Starting the implementation of a hydrogen society from Isogo
Currently, Unit 4 at the Yokohama Isogo Complex operates at high efficiency using city gas (Step 1). The next step is hydrogen co-firing (Step 2). Once a hydrogen infrastructure is in place, a transition to 30% co-firing is targeted for 2027 and onward. Beyond that, 100% hydrogen firing (Step 3) is within reach through the adoption of a diffusion-type DLE combustor and the updated control system. Looking further ahead, installing Kawasaki’s under-development MMX combustor in the PUC80D would open up the possibility of both zero CO2 emissions and reduced operating costs.
For the full-scale use of hydrogen, an entire supply chain of production, transportation, storage, and use must be established. However, the development of infrastructure will not move forward unless the needs of users are communicated to society.
“Unless we convey to society that there is a significant demand for hydrogen in Isogo, infrastructure like hydrogen pipelines will not be developed here. We want to present Isogo as a model case, demonstrating that this approach can be reliably implemented.”
“Once a hydrogen supply system is in place, customers can immediately move toward decarbonization. That is why we believe that it is crucial for customers to prepare for the transition in advance by conforming to hydrogen-ready specifications. Our role is to continue providing the most suitable technologies for that transition.”
The trust cultivated over the past decade has enabled the three companies to overcome rising costs and a shift away from a manual control culture. Our partnership continues to strengthen as we move toward the day when the first hydrogen flame is lit in Isogo.
Mr. Takashi Miura, Senior Engineer, Environmental Solutions , The Nisshin OilliO Group, Ltd.
Mr. Jun Sasaki Deputy General Manager Nagoya Plant, Production Division, The Nisshin OilliO Group, Ltd.
Mr. Shinya Yamamoto, Supervisor Crushing Group, Yokohama Isogo Plant, The Nisshin OilliO Group, Ltd.
Mr. Ryota Tanaka, Assistant Manager, Intercontinental Specialty Fats Sdn. Bhd.
Mr. Ryo Ota, Manager of the Planning Group, ESP Business Promotion Department, Power Producer and Supplier Division, JFE Engineering Corporation
Mr. Nobuyuki Oka, Director of the Project Section, Prime Power Gas Turbine Power Generation Department, Industrial Gas Turbine Management Department, Energy Solution Business Division, Energy Solution & Marine Engineering Company, Kawasaki Heavy Industries, Ltd.
Mr. Hideki Motooka, Prime Power Sales Department, Energy Solution & Marine Company, Kawasaki Heavy Industries, Ltd. (Currently on secondment to CHP Promotion Department, Advanced Cogeneration and Energy Utilization Center JAPAN as of March 2026)
*1. DLE Combustor: Green Gas Turbines | Gas Turbines | Kawasaki Heavy Industries, Ltd.
*2. A system that injects fuel through small holes (less than one mm in diameter) to create numerous micro-flames. This eliminates localized high-temperature areas, keeping NOx emissions consistently low.
*3. Currently serving as the Manager of CHP Promotion Department, Advanced Cogeneration and Energy Utilization Center JAPAN (as of March 2026)
