SK E&S to supply renewable electricity to BASF

South Korea’s SK E&S Co. will supply electricity generated from renewable energy to global chemical company BASF.

SK E&S announced on Tuesday that it had signed a transaction agreement for a "renewable energy direct power purchase agreement" (PPA) with BASF at SK Seorin Building in downtown Seoul on April 18.

Renewable energy PPA is regarded as the most effective means for achieving RE100 (100% renewable energy) by enabling companies to directly purchase electricity produced from renewable energy for their use.

Under this agreement, SK E&S will supply BASF with electricity generated from renewable energy for 20 years from 2025. BASF plans to replace about 16% of the required power at its Korean sites with renewable energy sources by 2025.

This is expected to result in a total reduction of greenhouse gas emissions of up to 900,000 tons by 2045.

BASF is working to replace fossil fuels with renewable energy sources such as solar and wind power to achieve NetZero (carbon neutral) by 2050.

SK E&S signed a PPA with Amorepacific in March last year, followed by a PPA with SK Specialty, a subsidiary of SK Materials, in August of the same year.

SK E&S plans to operate and develop over 3 gigawatts (GW) of renewable energy projects at home and abroad and expand it to 7 GW by 2025.

"We plan to expand cooperation with domestic and foreign investment companies that are promoting RE100 in line with the global efforts for carbon neutrality," said Lim Si-jong, the head of SK E&S.

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