Closing the Wakayama refinery and turning the site to next-generation fuel (2022)

The author’s view

The closure of the Wakayama refinery is one facet of how oil refiners have faced an unavoidable contraction in demand: by tidying up their sites one after another. Stopping Wakayama, after Muroran, Chita and Negishi, can be seen as a choice to avoid a single painful act of large-scale restructuring and instead drop the least profitable facilities in stages. In turning the site toward next-generation aviation fuel there is a consistency of its own — not withdrawing from refining, but remaking it from inside the fuel business.

The problems this decision left behind in the region, on the other hand, cannot be measured on a company’s books. In a town where one plant of one company accounted for 90% of manufacturing shipments, closure meant the simultaneous loss of jobs and of tax revenue. That the study group on the site’s future drew local discontent suggests that the concentration of refining capacity may be repeated in company towns across the country. How a transformation of the business structure is to be reconciled with the survival of the communities that host it is a question posed not to Wakayama alone but to the whole of Japan’s heavy and chemical industry in the age of decarbonization.