SK to Establish Hydrogen Production Capacity of 280,000 Tons by 2025

Full-Scale Entry into the Hydrogen Market

Accumulated Energy Business Capabilities

Consolidation for Creating a Hydrogen Ecosystem

Choi Tae-won's Acceleration of ESG Management

[Asia Economy Reporter Park So-yeon] SK Group's entry into the hydrogen business is due to the stagnation of its core petroleum industry. Once regarded as a golden egg-laying business, the petroleum industry has recently been on a downward trend amid the eco-friendly movement. In contrast, the hydrogen business is rapidly growing as the next-generation eco-friendly energy source. SK plans to strengthen the domestic hydrogen market ecosystem through its future hydrogen business and accelerate environmental, social, and governance (ESG) management emphasized by Chairman Choi Tae-won.

SK Inc. will first actively utilize the infrastructure owned by the group to supply competitive hydrogen. Starting in 2023, SK E&S, a subsidiary, will build liquefied hydrogen production facilities with an annual capacity of 30,000 tons to supply liquefied hydrogen to the metropolitan area. For this, it plans to receive by-product hydrogen from SK Innovation. In particular, SK Incheon Petrochem, under SK Innovation, is located near the metropolitan area, the largest demand center, which SK Inc. explains is an optimal location to efficiently solve cost issues related to long-distance hydrogen transportation.

Through SK E&S, a mass production system for blue hydrogen (hydrogen with captured and stored carbon dioxide) will also be operated. SK E&S, which directly imports more than 3 million tons of liquefied natural gas (LNG) annually, will utilize the large volume of natural gas secured to additionally produce 250,000 tons of blue hydrogen starting in 2025. In the long term, it plans to promote green hydrogen production projects using renewable energy such as solar and wind power, aiming to complete an eco-friendly hydrogen supply system that emits no carbon dioxide.

Along with this, the hydrogen value chain?from production to distribution and supply?will be operated in an integrated manner.

Although Hyundai Motor Group is actively working to build a hydrogen ecosystem, the domestic and global hydrogen markets are still in the early stages. SK Inc. explains that the domestic hydrogen market faces difficulties in expanding hydrogen vehicle adoption due to a lack of transportation and charging infrastructure, and existing hydrogen businesses are caught in a vicious cycle where they cannot actively invest in production facilities due to insufficient demand.

SK Inc. plans to quickly establish a virtuous cycle structure for the domestic hydrogen ecosystem by leveraging its experience in leading energy ecosystem creation through value chain integration in existing energy businesses such as petroleum and LNG. To this end, it will secure a total production capacity of 280,000 tons by 2025 and utilize SK Energy’s gas stations and truck rest areas as green energy service hubs to supply hydrogen for vehicles, while actively developing demand for power generation such as fuel cell power plants.

It will also simultaneously target the global hydrogen market by securing core technologies. Through investments in overseas companies possessing fundamental hydrogen technologies and forming global partnerships, SK plans to early secure competitiveness in the global hydrogen business and actively enter Asian markets such as China and Vietnam based on this foundation.

An SK Inc. official said, "The group-level decision to promote the hydrogen business marks the starting point of SK Inc.’s investment portfolio fully transitioning to eco-friendly sectors. We will consolidate the accumulated energy business capabilities to create an eco-friendly hydrogen ecosystem and establish ourselves as a leading ESG management company not only domestically but also in the global market."

This content was produced with the assistance of AI translation services.