Sumitomo Heavy Industries leads NEDO-backed carbon recycling project in Yamagata to build regional CO2 circular economy
Sumitomo Heavy Industries Ltd has been selected to lead a new research initiative in Japan aimed at developing a regional carbon recycling system in the Sakata/Shonai area of Yamagata Prefecture, marking a further step in the country’s efforts to scale industrial carbon utilisation and build a decentralised CO2 supply chain.
The project has been chosen under the New Energy and Industrial Technology Development Organisation’s (NEDO) programme to promote the implementation of carbon recycling technology through inter-industry collaboration. It will be conducted alongside Yamagata Prefecture, Sakata City, Maeta Concrete Industry Ltd and Toho Acetylene Co Ltd, with additional participation from Summit Sakata Power Corporation and The Yamagata Bank.
The initiative will focus on developing a small to medium-scale, decentralised carbon recycling model that connects CO2 emitters with end-users through coordinated regional infrastructure. The Sakata/Shonai region has been identified as particularly suitable due to its concentration of biomass power generation, port logistics, agriculture and manufacturing activity, making it a strong candidate for integrated carbon utilisation systems.
A central objective of the research is to establish a roadmap for a “green CO2 cycle” that uses carbon dioxide derived from biomass power generation. The project will assess CO2 demand across local industries, evaluate capture and supply mechanisms, and examine the economic and operational feasibility of building a functioning regional carbon supply chain.
Sumitomo Heavy Industries will oversee the study as the representative organisation, focusing on technology assessment and business viability. The company will draw on its existing experience in biomass power plant construction and carbon capture and utilisation technologies as part of the development process.
Other participants will play key roles across the proposed carbon value chain. Summit Sakata Power Corporation will be responsible for capturing CO2 from biomass-derived sources, while Maeta Concrete Industry will explore CO2 fixation in concrete products. Toho Acetylene will support the distribution of liquefied CO2, and local government bodies including Yamagata Prefecture and Sakata City will facilitate regional coordination and potential integration into public infrastructure projects. The Yamagata Bank will also support regional collaboration and industrial engagement.
The research reflects growing momentum in Japan towards carbon capture and utilisation (CCU) systems that treat CO2 not solely as an emission to be reduced, but as a resource to be circulated within industrial ecosystems. By linking biomass-based CO2 sources with construction materials and industrial applications, the project aims to demonstrate how regional economies can build self-contained carbon cycles.
Sumitomo Heavy Industries said it will leverage its existing expertise in renewable energy and carbon management technologies to advance both technical and commercial aspects of the project. The company highlighted that the research will examine not only engineering solutions but also institutional frameworks and business models needed for large-scale deployment.
The Sakata/Shonai carbon recycling initiative is expected to play a key role in shaping Japan’s broader strategy for carbon neutrality, particularly through the development of regionally integrated CO2 utilisation systems that can be replicated across other industrial clusters.
