Oil Refining Companies Shifting Focus to Eco-friendly Businesses

Daesan Plant of Hyundai Oilbank

 

South Korean oil refining companies are expanding their business portfolios to cover more eco-friendly products with China, the European Union and the United States aiming to achieve carbon neutrality.

Last year, the companies went through one of the worst years in the wake of COVID-19. SK Innovation, S-Oil and Hyundai Oilbank posted an operating loss of 4,249.8 billion won last year and the operating loss of GS Caltex for the first three quarters of 2020 amounts to 868 billion won. The four companies’ 2020 operating loss estimate is approximately five trillion won.

Even so, SK Global Chemical, a subsidiary of SK Innovation, is aggressively expanding its waste plastic recycling business by signing a memorandum of understanding with Brightmark in January. The U.S. company is capable of producing pyrolysis oil and the South Korean company is capable of replacing naphtha with pyrolysis oil in producing plastic product raw materials. Their combination is expected to facilitate waste plastic recycling.

GS Caltex, which is capable of supplying propylene as a raw material, polypropylene as an intermediate product and composite resins as end products, is increasing its eco-friendly composite resin production. The current production volume is 25,000 tons a year, more than 10 percent of its overall production. Last month, GS Caltex formed a partnership with Amore Pacific to expand its recycling business to cosmetic container recycling.

Hyundai Oilbank’s subsidiary Hyundai Chemical is planning to start commercial EVA production in the second half of this year with its olefin production facilities so that the ethylene vinyl acetate can be supplied for use in solar panels. At the same time, the company is working on the world’s first commercial technique for producing calcium carbonate and methanol from carbon dioxide released during crude oil refining facility operation.

S-Oil is planning to increase the ratio of its petrochemical business from 15 percent to 25 percent and enter new markets such as hydrogen, fuel cell and recycling. It is planning to increase startup investment to that end, too. (BUSINESS KOREA)