Japan will launch a next-generation passenger aircraft by around 2035, in another attempt to establish a domestic industry following the failure of a Mitsubishi Heavy Industries Ltd.-led project to develop the country's first passenger jet, sources said Wednesday.

The Ministry of Economy, Trade and Industry and several companies in the private sector will work together on the project, sharing an investment of about 5 trillion yen ($33 billion) over the next 10 years, the sources said.

The new aircraft could be fueled by hydrogen, among other options, but not traditional jet oil, as the growing push for decarbonized transport options drives innovation. Global airlines have started using sustainable aviation fuel, or SAF, which is made from waste food oil and plants in recent years.

The aircraft industry is expected to be a growth driver for Japan, with a homegrown aircraft benefitting a slew of domestic component suppliers, according to ministry officials.

Mitsubishi Heavy pulled the plug on the previous project to roll out Japan's first homegrown passenger jet, called SpaceJet, last year, citing a lack of know-how and mounting costs.

The development of the SpaceJet, formerly known as the Mitsubishi Regional Jet, began in 2008 with the help of 50 billion in financial aid from the industry ministry, with its first delivery initially slated for 2013.

But the delivery schedule was postponed six times before coronavirus pandemic disruptions dealt the final blow to the project.

Industry experts say that the company's strategy to stick to in-house development rather than collaborating with outside talent was partly responsible for the failure, which eventually cost around 1 trillion yen.

Mitsubishi Heavy made military aircraft, including the Zero fighter, during World War II.

==Kyodo

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