The Petroleum Association of Japan said on Thursday that 50 gas stations in Tokyo and surrounding prefectures sold in the past fiscal year a little more than 100,000 kl of the alternative fuel.

Japan's oil industry prefers ETBE (ethyl tertiary butyl ether), which is made by compounding ethanol and isobutane, over ethanol mixed directly with gasoline because it does not require distribution network modifications.

Japan's oil industry expects sales of "green fuel" to rise towards 200,000 kilo liters in the year through March, in the second year of government-subsidised test circulation of the gasoline mixed with 7 percent imported ETBE.

Japan, which consumes some 60 million kl of gasoline a year, is almost totally dependent on imported fuel and lacks ample farm produce to make ethanol. Still, Tokyo has said it aims to replace more fossil fuels with biofuels to slow climate change. ETBE-mixed gasoline is made up 3 percent of biomass ethanol.

The number of gas stations for test sales is scheduled to rise to 100 in fiscal 2008/09, including 3 gas stations in Osaka, western Japan. "We expect the sales volume to rise this year, but it would be less than double from last year," a spokesman at the association said. The existing 50 gas stations are mostly new ones and some have double-coated tanks. But the additional 50 gas stations slated for this year include more traditional, small-sized stations, such as those with single-coated tanks, for gathering data, he said.

The test circulation this year is expected to cost 2.2 billion yen ($21 million), half of which is paid by the oil industry and the rest by tax payers' money.
The association also said 6,700 kl of ETBE from Brazil arrived at Nippon Oil Corp's <5001.T> mixing facility in Yokohama city, south of Tokyo, on Wednesday, the third ETBE shipment for the industry and the first import from the world's No. 1 ethanol exporter.

The practical operator, Japan Biofuels Supply LLP, a joint venture set up last year by Japanese oil companies, imported ETBE from Europe in two cargoes last fiscal year, totalling 15,700 kl. "Whether to maintain imports from Brazil or to resume imports from Europe is not yet decided," a Japan Biofuels Supply spokesman said. Source = reuters.