LG eyes clean tech supremacy with $1.5 bn spending on green projects

South Korea’s fourth-largest conglomerate LG is setting its sights on clean energy technology as it steps up efforts to transform into an eco-friendly business group.

To finance its clean tech push, LG Corp., the holding firm of the group, said on Wednesday it will invest 2 trillion won ($1.54 billion) over the next five years in green projects related to biomaterials, recycling of used batteries and plastics, and carbon-neutral technologies.

The investment will accelerate the group’s business model change from petrochemicals to sustainable and more eco-friendly businesses in line with the global adoption of environmental, social and governance (ESG) standards.

LG’s aggressive green push comes as Group Chairman Koo Kwang-mo marks his fourth anniversary at the helm of the conglomerate. He took office as chairman and chief executive of LG Corp. in June 2018.

“We must set the businesses where we can lead as our future growth drivers,” Lee said during a visit to LG Science Park, the group’s research center, in Magok, western Seoul.

Clean technology refers to a process, product or service that reduces negative environmental impacts through significant energy efficiency improvements, the sustainable use of resources or environmental protection activities.

Clean technology includes a broad range of technology related to recycling, renewable energy, green transportation and green chemistry.

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LG said its pursuit of clean tech also comes in response to growing demand from its clients that companies abide by rules to cut carbon emissions throughout the supply chain, particularly in Europe where environmental regulations are tougher.

Some of LG Group’s green projects include building a bioplastic plant in the US.

LG Chem Ltd., Korea’s largest chemicals maker, said last September that it is jointly building a corn-based bioplastic plant by 2025 in the US with Archer Daniels Midland Co. (ADM), a global grain processing company.

LG Chem said it will also add facilities to its Korean plant in Daesan, south of Seoul, to produce biofuel and fossil-based biodegradable polymers.

Last December, LG Chem and its affiliate LG Energy Solution Ltd. jointly acquired a 2.6% stake in Li-Cycle, a Toronto-based recycling startup, for 60 billion won.

Separately, the two LG companies signed a deal to receive a total of 20,000 tons of nickel from Li-Cycle, the largest lithium-ion battery recycling firm in North America, over 10 years from 2023.

The amount is enough to manufacture 300,000 batteries with 80 kWh for high-performance electric cars.

LG Energy Solution, Korea’s top battery maker, has said its long-term goal is to set up a value chain in the EV battery business from mining raw materials to the production and disposal of batteries.

More recently, LG Chem and Korea Energy Materials Co. (KEMCO), Korea Zinc’s affiliate that produces nickel sulfate, agreed to launch a joint venture to make precursors, a critical battery material.

Write to Shin-Young Park at nyusos@hankyung.com
In-Soo Nam edited this article.