In the Eco-Friendly Era, How Refining Companies Survive... Challenges in Chemicals, Hydrogen, and Batteries

How They Survive in the Decarbonization Trend
S-Oil's 'Shahin Project'
Producing 100% Recycled Materials

Hyundai Oilbank and GS Caltex Also
Focus on Securing Eco-Friendly Production

SK Innovation Concentrates on Battery Materials and Used Battery Recycling

Oil refining companies are facing new challenges due to structural changes in their 'core business' in the era of carbon neutrality. Amid the rise of eco-friendly energy and changes in transportation methods, oil refining companies are seeking new sources of growth in the decarbonization trend.

On the 18th, the four major oil refining companies?SK Innovation, GS Caltex, Hyundai Oilbank, and S-OIL?are expanding their business areas beyond refining to include eco-friendly petrochemical materials, batteries, and hydrogen energy. In particular, they are prominently applying the technology and know-how accumulated in the existing refining business to petrochemicals, aiming to produce chemical materials such as eco-friendly plastics.

S-OIL finalized a petrochemical project worth KRW 9.258 trillion (approximately USD 7 billion) the day before, called the ‘Shaheen (Arabic for ‘hawk’) Project.’ Through this project, S-OIL will have the world’s largest refining and petrochemical steam cracker facility by 2026. It will produce up to 3.2 million tons annually of high value-added petrochemical products used as raw materials for synthetic resins, including plastic materials such as polyethylene (PE) and polypropylene (PP). Both PP and PE are materials that can be 100% recycled through separate collection. S-OIL is currently promoting decarbonization under the slogan ‘Oil to Chemicals,’ aiming to increase the share of petrochemicals in total sales from about 17% last year to 25% by 2030.

Hyundai Oilbank is transitioning to a platform for eco-friendly energy and materials businesses in preparation for the climate crisis and the carbon neutrality era. In the short term, it is minimizing pollutants generated from refining and petrochemical businesses and securing the eco-friendliness of its products by utilizing recycled waste materials as raw materials. Hyundai Chemical, a joint venture established by Hyundai Oilbank and Lotte Chemical, completed Korea’s first petrochemical facility (HPC) last month that can use low-cost raw materials such as heavy oil fractions and by-product gases. This facility can produce 850,000 tons of ethylene and 500,000 tons of propylene annually. In the mid to long term, the company has identified ▲blue hydrogen ▲white bio ▲eco-friendly chemical and materials businesses as its ‘three major eco-friendly future businesses.’ Through this, it aims to reduce the refining business sales ratio, which accounted for 85% as of last year, to 45% by 2030 and increase the profit ratio of eco-friendly businesses to 70%.

GS Caltex also invested KRW 2.7 trillion, the largest amount since its founding, on the 11th to build an olefin production facility (MFC). Located near the Yeosu plant in Jeollanam-do, this facility has the capacity to produce 750,000 tons of ethylene, 500,000 tons of polyethylene, 410,000 tons of propylene, 240,000 tons of mixed C4 fractions, and 410,000 tons of pyrolysis gasoline annually.

SK Innovation, focusing on the battery business, is building a battery ecosystem that includes battery materials and recycling of used batteries in addition to finished battery cells. SK Innovation is actively promoting the used battery recycling business, planning commercial operation by 2025. The company has firmly committed to investing KRW 20 trillion in the battery and materials sectors. In addition, it is currently preparing land development for establishing a low-carbon petrochemical product manufacturing plant in the Ulsan and Mipo National Industrial Complexes.

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