The largest oil refiner in Japan is working to raise $3 billion in funds to develop alternative fuels, including hydrogen and synthetic fuels, as part of an energy transition initiative.
ENEOS Holdings will sell more than 460 million shares of its subsidiary, JX Advanced Metals Corp., to raise the money for its non-dirty fuel strategies, such as liquid hydrogen, organic hydrides, and ammonia for large-scale hydrogen storage and transport, H2 View reports.
The outlet also explained that JXAM, a leader in semiconductor material manufacturing, will be able to make decisions faster and increase research and development in semiconductor as well as information and communication technology materials.
"ENEOS Holdings believes that its corporate value will be further increased by accelerating its efforts to transform itself into a company that realises a carbon-neutral society through the stable supply of energy and materials via petroleum-related businesses and the supply of next-generation energy such as synthetic fuels and hydrogen," the company stated.
The initial public offering is the largest in Japan in seven years, H2 View added. IPOs allow shares of a private company to be available to the public and, according to Investopedia, are often a giant step forward for companies that can fuel growth and research and development. Individual investors also have stakes in the company, meaning they can hold them responsible for changes and make money in the process.
Transitioning from dirty fuels to alternative forms of energy is proving to be a wise investment for companies. The Institute for Energy Economics and Financial Analysis reports that the dirty fuel sector has been underperforming for decades and has a poor long-term financial outlook. It notes that divesting from dirty fuels has held up to financial scrutiny, with over 1,600 investors reaping $40 trillion in value via strategic moves away from dirty energy.
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ENEOS' investment in hydrogen is not without cons. Hydrogen generally burns cleaner than dirty fuels, but it often requires dirty fuel sources to be burned, per the Environmental Defense Fund. This makes investment in hydrogen questionable in terms of its effectiveness in lowering planet-warming pollution.
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