[Featured Stock] Hanchang Finds Goldmine in Waste Plastic Amid High Oil Prices... Replacing Crude Oil with Pyrolysis Oil

[Asia Economy Reporter Hyungsoo Park] Hanchang is soaring. Expectations for growth in the pyrolysis petrochemical business appear to be influencing the stock price.

As of 10:58 AM on the 8th, Hanchang is trading at 1,450 KRW, up 22.98% from the previous trading day.

Hanchang is promoting the pyrolysis petrochemical business. This business involves manufacturing, installing, and operating plants that pyrolyze polymer waste such as waste plastics, waste synthetic resins, and marine waste, converting them into liquid fuel oil. The refined oil, which has a quality close to 95% of diesel, is used as an energy source for medium- and low-speed generators and heavy equipment in various industrial sites.

The waste treatment industry is difficult for competitors to enter and is an oligopolistic industry where new companies rarely emerge. Existing waste treatment methods such as incineration or landfill focus mainly on disposal. Among chemical treatment methods, pyrolysis treatment is an eco-friendly and economical method because it can convert waste into high value-added oil or chemical raw materials.

One important factor affecting the production of pyrolysis oil from low-temperature pyrolysis of waste plastics is the restart rate. Waste plastics are loaded into a large batch-type pyrolysis reactor and heated at 300 to 500°C for about 17 to 18 hours to produce oil. The reactor, which is heated for a long time, does not cool easily, and due to chlorine compounds inside the reactor, water cooling is also difficult. Reducing the cooling time to enable quick restart is a key competitive factor in the productivity of pyrolysis oil.

The ratio of pyrolysis oil produced by low-temperature pyrolysis relative to the amount of waste plastic input into the reactor is also an important competitive factor. When about 10 tons of organic waste are input, approximately 50% of pyrolysis oil is extracted. This yield can be further increased through catalytic product separation processes and product recycling processes. It is an important competitive factor in terms of the scale and capacity of the treatment facility.

The organic waste used as raw material contains various impurities besides PP, PE, and PS, and during low-temperature pyrolysis, a sufficient oil refining process and product separation process must be conducted to suppress wax formation and produce high-quality refined oil considering the carbon number distribution of the pyrolysis oil.

Due to the impact of COVID-19, plastic usage surged. According to the Ministry of Environment, plastic waste, which was discharged at an average of 741 tons per day from January to July 2019, increased by 855 tons during the same period last year, with plastic waste increasing by 15.4% after COVID-19.

The annual generation of waste plastics, the main raw material for the pyrolysis petrochemical business, is estimated at 360 million tons. Only about 13% of waste plastics are recycled, while the rest are simply incinerated (27%) or landfilled (40%). From an environmental perspective, these are the worst disposal methods, and from a circular economy viewpoint, the pyrolysis petrochemical industry, a chemical recycling technology, is essential.

Hanchang Green Holdings, a subsidiary, also possesses the world's first barge-based pyrolysis treatment application technology for marine waste. The raw materials such as waste fishing gear and buoys mainly consist of 3P, which is the same material as land-based waste synthetic resin, and pyrolysis technology was applied based on this. Hanchang Green Holdings applied the 5th generation evolved technology of low-temperature pyrolysis for waste synthetic resin to marine waste such as waste fishing gear, synthetic resin types, waste wood, and miscellaneous wood, and processed waste through compression and crushing processes using sorting conveyors on barges.

They plan to establish a demonstration plant for pyrolysis petrochemical processing with a daily capacity of 8 tons in Jindo-gun, Jeollanam-do, and promote the pyrolysis petrochemical industry through this. In Korea, pyrolysis oil is currently used only as heating or industrial fuel, but with amendments to resource circulation laws such as the 'Waste Management Act Enforcement Rules,' pyrolysis oil is expected to replace crude oil. Systems are being established to allow recycling as raw materials for petrochemical processes such as naphtha and diesel, and future growth potential is expected to be very high.

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