HD Hyundai Oilbank secures bio-based material supply network

South Korea's HD Hyundai Oilbank announced on Tuesday it signed contracts with Indonesia's Korindo Group and Korea's LX International for the purchase of 40,000 tons each, totaling 80,000 tons of palm fatty acid distillate (PFAD).

PFAD is a byproduct produced during the palm oil production process, known for its high acidity, and is used as a raw material primarily in a select few biodiesel plants worldwide. Biodiesel is a bio-based fuel produced using vegetable oils extracted from crops like soybeans.

In addition to the bio-based material supply agreement with Korindo Group, HD Hyundai Oilbank plans to collaborate on carbon reduction efforts through the utilization of biomass, such as wood pallets and forest restoration.

HD Hyundai Oilbank is gearing up for the commercial operation of a biodiesel plant with a capacity of 130,000 tons per year, scheduled for the next month. This contract secures a stable supply network for bio-based raw materials.

Beyond PFAD, HD Hyundai Oilbank also intends to reuse and recycle used cooking oil as a raw material for its biodiesel plant. Last year, it signed an agreement with Lotte Wellfood to get a supply of waste cooking oil for its production process.

Write to Mi-Sun Kang at misunny@hankyung.com