Japanese oil wholesaler Idemitsu Kosan says it will terminate operations at one of its refineries in 2024. The firm will consider using the site as a receiving base for carbon-free materials such as hydrogen and ammonia.

Executive Vice President Nibuya Susumu made the announcement on Tuesday.

He said domestic demand for petroleum products has declined faster than expected, partly due to the accelerating global trend towards decarbonization.

He also cited structural issues such as Japan's aging population as a factor behind decreasing demand.

The refinery slated for closure is in Yamaguchi Prefecture in western Japan. It produces 1.5 million kiloliters of gasoline a year, about 10 percent of the group's output.

Idemitsu says the group will be able to maintain stable supply with output from its other refineries.

Rival oil wholesaler Eneos Holdings is planning a similar move. Eneos says it will close a refinery in Wakayama Prefecture, also in western Japan.