Born in Oil, Transformed by Battery... SK's 'Green Transformation'

SK Battery Launch Next Month
Starting as Korea's First Petroleum Company Utility
A Historic Chapter in Korea's Petrochemical Industry
Now Transitioning Identity to Eco-Friendly

[Asia Economy Reporter Choi Dae-yeol] "We will implement a transition strategy from carbon to green (eco-friendly)."

This was stated by Kim Jun, President of SK Innovation, at the extraordinary general meeting of shareholders held on the 16th. SK Innovation, originally Korea Petroleum Corporation (Yugong), the first oil company in Korea, shares the history of Korea's petroleum and chemical industry. Through mergers, acquisitions, and spin-offs, it still holds subsidiaries such as SK Energy and SK Incheon Petrochem (crude oil refining), as well as SK Geocentric (formerly SK Comprehensive Chemical), which recently changed its name.

The decision to separately spin off the battery and petroleum exploration and production (E&P) businesses is viewed by the industry not merely as a company-level decision but as a reflection of a paradigm shift surrounding the energy industry. Since carbon-centered businesses are unsustainable, the strategy is to accelerate eco-friendly businesses, including batteries, which are considered next-generation power sources, to secure leadership in the future energy market.

Chairman Chey Tae-won of SK Group delivered the keynote speech at the P4G Business Forum held last May.

SK Group Chairman Chey Tae-won has emphasized that "companies with technology and capital have a responsibility to play their role in addressing climate change." In line with this, SK Innovation declared a complete transformation of its corporate identity from carbon-based businesses focused on refining and chemicals to green business sectors centered on batteries and recycled plastics at its Story Day event last July.

The business leading SK Innovation’s transformation, which has been recognized as an oil refining company for 60 years, is undoubtedly the battery sector. In addition to battery manufacturing, the group plans to foster the materials business and organically link upstream and downstream businesses such as used battery recycling. The strategy is to expand the market while engaging in environmentally less harmful businesses.

Alongside batteries, the E&P business, which was spun off as a separate corporation this time, will focus on carbon capture and storage (CCS) technology, regarded as a next-generation eco-friendly technology. This is also part of the green strategy. SK has been actively engaged in petroleum development since starting exploration in the North Yemen area in 1984, but going forward, it is expected to increase the proportion of CCS business rather than oilfield development or crude oil exploration.

SK Innovation's crude oil field in Oklahoma, USA

CCS is considered an essential technology for producing hydrogen, a future energy source, through environmentally friendly processes. While hydrogen produced from renewable energy can be carbon-free at the source, in countries like Korea with weak renewable energy infrastructure, blue hydrogen?produced by removing carbon from by-product hydrogen generated in existing petrochemical and steel processes?is seen as a practical alternative. CCS technology is essential for this. Since depleted oilfields are considered as storage sites for captured carbon dioxide, the know-how and capabilities developed in petroleum exploration are expected to create synergy.

President Kim said on the day, "We will further enhance the expertise and competitiveness of each business to secure a definite advantage in the increasingly fierce global competition," adding, "Starting with the company split, we will establish independent management systems specialized for each company to strengthen competitiveness and accelerate both qualitative and quantitative growth."

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