IGEV plant at the Hoai Tan Industrial Cluster, Hoai Nhon Nam Ward, Gia Lai Province

Supporting Gia Lai's green energy transition

Idemitsu Kosan, one of Japan's leading energy and resource groups with a history spanning more than 110 years and a diversified global business portfolio.

In Vietnam, the Group began its research and business operations in 1989, initially focusing on the energy sector before gradually expanding across many business areas. Today, the Idemitsu Kosan Group operates eight member companies in Vietnam, spanning six major business sectors: refinery, oil & gas exploration & production, lubricants, engineering service, service station, and green energy.

Idemitsu remains firmly committed to becoming a trusted energy partner, lighting up lives and walking hand-in-hand with the sustainable development of Vietnam.

As part of this strategy, Gia Lai has been selected as a key province to advance the Group's green energy transition. A major milestone is the development of the Idemitsu Green Energy Vietnam (IGEV) plant at Hoai Tan Industrial Cluster, Hoai Nhon Nam Ward, Gia Lai Province.

With an annual production capacity of 120,000 tons, the plant officially commenced commercial operations in October 2025, producing high-quality black pellets under the Idemitsu Green Energy Pellets (IGEP™) product line. It is the first renewable energy project self-operated by the Idemitsu Kosan Group and the first commercial black pellet facility in Vietnam.

According to Mr. Morioka, Director of IGEV, black pellets are a biomass-based energy resource made from materials such as wood that undergo thermal processing. While black pellets emit CO₂ during combustion, the wood used as raw material absorbs CO₂ through photosynthesis during the growth process, resulting in a net "carbon-neutral" status.

Built on this foundation, Idemitsu Green Energy Pellets (IGEP™) by IGEV have been designed to meet the decarbonization needs of customers currently using coal, helping reduce CO₂ emissions compared with conventional coal while contributing to the carbon-neutral goal. The product features a co-firing ratio with coal of up to 30%.

A key advantage of IGEP™ is its physical properties, which closely resemble those of coal, enabling customers to transition to cleaner fuel with minimal modifications to their existing infrastructure. Currently, IGEP™ is exported directly to the Japanese market, which maintains exceptionally stringent standards for clean energy.

Having overcome numerous challenges on the way to commercial operations, the IGEV plant has maintained stable performance and is steadily demonstrating the viability of an industrial-scale biomass energy model. Beyond marking a major milestone in Idemitsu's development strategy, the project also opens a new pathway for the green energy transition in Gia Lai and the Central Highlands–South Central Coast region of Vietnam.

Idemitsu 's development orientation in Gia Lai extends far beyond commercial manufacturing. The company is committed to building a long-term, sustainable green energy ecosystem by developing local talent and creating stable employment for hundreds of local workers, from plant operators to raw material processing specialists.

Through the IGEV project, Idemitsu is accompanying Gia Lai in advancing the green energy sector, developing local talent and the local economy, contributing to the realization of Net Zero ambitions, and strengthening the province's position in attracting green investment.

Looking ahead, Gia Lai will continue to be a key strategic location in Idemitsu’s long-term green and sustainable development strategy. The company will continue partnering with local forest growers to develop a sustainable raw material supply chain that complies with international standards such as FSC and JIA, while ensuring stable purchasing commitments. At the same time, it will further strengthen the development and conservation of sustainable forest-based raw material areas. Through these efforts, Idemitsu aims not only to enhance the value of commercial forestry but also to create sustainable development for local communities and promote a high-value-added forestry value chain.

Wood chipping at the IGEV plant

Turning sustainability into action

One of Idemitsu’s most important sustainability goals is to contribute to carbon neutrality by developing and promoting renewable energy solutions. In Vietnam, this commitment is being realized through green, emission-reduction initiatives with a strong emphasis on the circular economy.

Beyond the landmark IGEV project in Gia Lai, Idemitsu has also implemented several emission reduction initiatives in other sectors. In Thanh Hoa Province, for example, Idemitsu Kosan has partnered with Sagri (Japan) and Lam Son Sugar Joint Stock Corporation (Lasuco) to implement project aimed at generating carbon credits from 500-ha- sugarcane fields (pilot phase). The project utilizes advanced satellite data analysis technology to monitor soil conditions and crop growth, optimizing the type, volume, and timing of fertilizer applications, thereby reducing chemical fertilizer usage. This initiative not only lowers nitrous oxide emissions from nitrogen-based fertilizers but also enhances soil carbon sequestration, contributing significantly to greenhouse gas reduction goals.

At the same time, in Gia Lai, through IGEV, Idemitsu places strong emphasis on developing a sustainable raw material supply chain through close coordination with local communities and authorities. IGEV is committed to sustainable purchasing practices while supporting farmers in developing forests that meet strict international certification standards, including FSC and JIA. This strategic partnership enhances the entire forestry value chain, secures stable incomes for local communities, protects natural ecosystems, and significantly increases carbon sequestration.

Alongside its green growth strategy, ESG (Environmental, Social, and Governance) serves as the foundation of the Group's governance framework across many business operations. In Vietnam, that direction is being carried out through Idemitsu Vietnam Co., Ltd. — a subsidiary established in 2023, playing a central role, specializing in organizing and supporting the Group's activities in Vietnam.

Accordingly, ESG is not viewed as a localized initiative or a set of compliance targets. Instead, it is a comprehensive, group-wide commitment and governance framework led by the Group globally. This overarching sustainability strategy is implemented consistently across all operations in Vietnam, ensuring alignment with the Group's global ESG approach and rigorous governance structure.

Guided by this global governance framework, Idemitsu Vietnam proactively implements concrete initiatives across all aspects of its operations, with people at the heart of its sustainable development strategy.

The 2026 "Green Nghi Son" Campaign. (Photo courtesy of Nghi Son Refinery and Petrochemical LLC)

In terms of employee welfare and comprehensive care, Idemitsu Vietnam is committed to implementing comprehensive policies that provide the best possible working environment for all employees, in compliance with the laws of Vietnam as well as the specific policies of the Group and each member company.

Idemitsu also actively fulfills its Corporate Social Responsibility (CSR), viewing it as an integral part of its long-term commitment to supporting local communities wherever it operates. Alongside the IGEV green energy project in Gia Lai and the agricultural carbon emission reduction project in Thanh Hoa, the company continues to implement the 2026 "Green Nghi Son" Campaign, building on the 2025 coastal clean-up initiative and contributing to the long-term protection of the marine ecosystem in the Nghi Son Economic Zone.

Looking ahead, Idemitsu will continue to expand its investment in clean energy, develop sustainable raw material areas, and promote circular economy models. Through these efforts, the company aims to make p

ractical contributions to the green growth goals and Net Zero roadmap of Gia Lai in particular and Vietnam as a whole. This reflects Idemitsu's long-term commitment to walking hand-in-hand with Vietnam toward a green economy and sustainable development