Rengo and Sumitomo Forestry Establish Joint Venture, Launch Bioethanol Business ~Sustainable Aviation Fuel (SAF) from Construction Waste~

Sumitomo Forestry Co., Ltd. (President: Toshiro Mitsuyoshi, Headquarters: Chiyoda-ku, Tokyo; hereinafter, Sumitomo Forestry) and Rengo Co., Ltd. (President: Yosuke Kawamoto, Headquarters: Osaka City, Osaka Prefecture; hereinafter, Rengo) established "RS Wood Refinery Co., Ltd." (President: Tamotsu Maeda, Headquarters: Fuji City, Shizuoka Prefecture; hereinafter, RS Wood Refinery) through a joint investment on April 1st. RS Wood Refinery will manufacture bioethanol, a raw material for Sustainable Aviation Fuel (SAF), using construction waste generated during the construction, renovation, and demolition of houses by the Sumitomo Forestry Group. ■ Business Overview RS Wood Refinery was established based on the basic agreement* concluded in April 2025. It will procure raw materials such as construction waste and manufacture and sell bioethanol. The goal is commercial production of 20,000 kL annually by 2028. In addition to bioethanol, development is also underway to commercialize biorefinery products, such as raw materials for residential paints, by utilizing lignin components generated during the manufacturing process. Raw materials will include construction waste generated at Sumitomo Forestry Group's housing construction, renovation, and demolition sites. Sumitomo Forestry will be responsible for the stable procurement of raw materials and the joint development and sales of biorefinery products. Bioethanol will be manufactured using technology cultivated by the Rengo Group in the biomass chemical field, at a newly constructed plant on the premises of the group's paper mill. The manufactured bioethanol is planned to be sold to petroleum wholesalers and, after conversion to SAF, used as aviation fuel. ■ Background In the aviation sector, international movements toward decarbonization are progressing, and demand for SAF is expected to expand as a highly effective means of reducing CO2 emissions. Currently, there is a global shortage of SAF supply, making the development and stable supply of domestically produced SAF an urgent task. While SAF manufacturing technologies using waste cooking oil, corn, and sugarcane as raw materials are currently established, there are challenges such as raw material supply constraints and competition with food. Bioethanol utilizing wood resources that do not compete with food is expected as a means to achieve both diversification of raw materials and reduction of CO2 emissions. Both companies focused on the biorefinery business utilizing wood resources and, following a basic agreement last year, established a joint venture. They aim to build a business model that makes full use of wood resources and accelerate the transition from fossil fuels to biofuels. The Sumitomo Forestry Group globally develops businesses centered on "wood," from forest management to the manufacturing and distribution of wood building materials, contracting for detached houses and medium-to-large scale wooden buildings, real estate development, and wood biomass power generation. In its long-term vision "Mission TREEING 2030" until 2030, the company aims to contribute to decarbonization not only within the company but also for society as a whole by increasing CO2 absorption in forests, fixing carbon long-term through the spread of wooden architecture, and circulating Sumitomo Forestry's value chain, the "Wood Cycle." Through the biorefinery business, the company will maximize the potential of wood biomass resources, reduce CO2 emissions, increase carbon fixation, and accelerate and promote the "Wood Cycle." ■ Overview of the Joint Venture Company Company Name: RS Wood Refinery Co., Ltd. Headquarters: 10 Kamiyokowari, Fuji City, Shizuoka Prefecture (within Daiko Paper Co., Ltd. premises) Representative: Tamotsu Maeda (Representative Director and President) Establishment: April 1, 2026 Capital: 5 million yen Shareholders: Rengo Co., Ltd. 66% Sumitomo Forestry Co., Ltd. 34% Business Overview: Procurement of wood chips, manufacturing of bioethanol ■ Overview of Rengo Co., Ltd. (https://www.rengo.co.jp/index.html) Company Name: Rengo Co., Ltd. Headquarters: 2-2-7 Nakanoshima, Kita-ku, Osaka City Representative: Yosuke Kawamoto (Representative Director, President & COO) Establishment: May 1920 Capital: 31,066 million yen (as of March 31, 2025) Number of Employees: 25,011 (as of March 31, 2025, consolidated) Business Overview: Manufacturing and sales of paper, corrugated board, paper containers, flexible packaging, heavy packaging, etc. * Refer to the release on April 23, 2025, "Basic Agreement Concluded with Rengo for Wood-Derived Bioethanol Production ~Utilizing Construction Waste for Sustainable Aviation Fuel (SAF)~"