Lotte Chemical to Invest 4.4 Trillion KRW in Hydrogen Business

Production of 600,000 tons by 2030
"We will earn 3 trillion won from hydrogen alone"
Hydrogen veteran declares market entry

In May, Shin Dong-bin, Chairman of Lotte Group, visited the Lotte Aluminum Ansan Plant. Photo by Lotte

[Asia Economy Reporters Choi Dae-yeol and Hwang Yoon-joo] Lotte Chemical, leading Lotte Group’s hydrogen business, has decided to invest 4.4 trillion KRW by 2030 to produce 600,000 tons of clean hydrogen. This amount corresponds to 30% of domestic hydrogen demand, and through this, Lotte Chemical plans to achieve 3 trillion KRW in sales and an operating profit margin of around 10% solely from the hydrogen business.

On the 13th, Lotte Chemical announced an eco-friendly hydrogen growth roadmap titled ‘Every Step for H2’ containing these details. This roadmap is a follow-up measure to Lotte Group’s announcement on the 1st of its carbon neutrality goal by 2040, and it concretizes the direction of Lotte Chemical’s eco-friendly strategy ‘Green Promise 2030’ announced earlier this year.

Lotte Group released a mid- to long-term plan related to the hydrogen business because it judged that the utilization of hydrogen in the future energy market will significantly increase. Centered on Lotte Chemical, Lotte Group’s chemical affiliates currently produce the largest amount of by-product hydrogen domestically. Having accumulated experience in hydrogen production, they decided to focus on developing businesses and related technologies that utilize hydrogen. Earlier this year, Lotte Chemical selected four major fields as eco-friendly new businesses to develop by 2030, and among them, the hydrogen business is just emerging in the market, so early entry and market preemption were considered important.

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The hydrogen business roadmap announced by the company covers everything from hydrogen production to related business utilization and technology development. Production refers to the stage of making hydrogen as an energy source, and currently, hydrogen produced as a by-product in large-scale processes such as refining and steelmaking (by-product hydrogen) is mainly used. Lotte Chemical produces about 30,000 tons annually, and at the chemical BU level within the group, about 70,000 tons are produced, making it the largest scale domestically. Hydrogen itself is non-toxic, but the production process emits carbon, so it is called gray hydrogen.

The company plans to convert this into environmentally friendly green and blue hydrogen using carbon capture technology, aiming to produce only eco-friendly hydrogen at 600,000 tons annually in 10 years. By 2025, they plan to produce 160,000 tons of blue hydrogen, and by 2030, add 440,000 tons of green hydrogen, totaling 600,000 tons of clean hydrogen production.

They also plan to expand the utilization of the hydrogen produced. Representative examples are fuel cell power plants and hydrogen refueling stations. Fuel cell power generation uses hydrogen as an energy source to generate electricity and can be applied to individual vehicles, making its uses diverse. Accordingly, they plan to build and operate a fuel cell power plant in Ulsan by 2024.

They will build 50 liquid hydrogen refueling stations by 2025 and further increase the number of complex refueling stations to 200 by 2030. This is in anticipation of increased use of hydrogen for transportation. Additionally, they announced plans to operate environmentally friendly factories with low carbon emissions by introducing fuel cell power plants or hydrogen turbine generators within business sites.

They will also actively pursue technology development related to the hydrogen business. They plan to develop high-pressure tanks for hydrogen storage themselves, increasing production to 100,000 units by 2025 and 500,000 units by 2030. These tanks, used for hydrogen passenger and commercial vehicles, will apply carbon capture and storage utilization technology to be environmentally friendly.

Hwang Jin-gu, Head of Basic Materials Business at Lotte Chemical, said, "From the perspective of proactive investment, we want to ensure timely infrastructure construction without missing the opportunity," adding, "When the green hydrogen era arrives, the produced green hydrogen will be supplied timely to each utilization sector through the already established supply chain so that consumers can enjoy eco-friendly consumption without carbon concerns."

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