SK Inc. bulks up green investments to achieve net zero by 2035

SK Inc., the investment arm of South Korea’s second-largest conglomerate SK Group, is taking preemptive steps to expand its eco-friendly businesses.

At a meeting with key stakeholders and market analysts on Nov. 30, the SK Group’s investment firm announced its green business strategies focusing on clean energy, industrial transformation and net zero.  

“Our green investments aim to secure the group's future growth engine,” said Kim Moo-hwan, executive vice president at the investment firm's Green Investment Center  said on Wednesday.

“We will increase SK Group’s value through collaborations and joint investments with the affiliates. Climate change solutions will bring us new business opportunities with a great amount of potential,” Kim added.

CLEAN ENERGY, INDUSTRIAL TRANSFORMATION, NET ZERO

The company has been investing in renewables, hydrogen and ammonia as fuels, biomass and small modular reactors (SMRs), which are regarded as a next-generation energy source due to lower costs and fewer carbon emissions than existing large nuclear power plants.

In August, the investment firm and petrochemicals giant SK Innovation Co. jointly invested $250 million in TerraPower, a US SMR venture founded by Bill Gates, becoming the second-largest shareholder. 

In July, the SK Group’s investment arm and natural gas business firm SK E&S Co. injected a combined $25 million in US turquoise hydrogen firm Monolith Materials Inc. to introduce the US firm’s pyrolysis technologies, key for the production of turquoise hydrogen.

The investment arm is also focusing on industrial transformation to reduce carbon emissions, investing in sustainable food. Last month, the company injected $7.5 million in US cell-cultured food company Wildtype to strengthen its sustainable food portfolio.

In 2021, it invested $55 million in US alternative dairy maker Perfect Day Inc., as well as 29 billion won ($22.3 million) in US microbe-based proteins maker Nature’s Fynd and some unknown amount of capital in UK meat-free products maker Meatless Farm.  

The group became the first Korean conglomerate in June 2021 that declared net zero, aiming for carbon neutrality by 2035. In efforts to achieve the goal, the SK Group’s investment arm is considering betting on carbon capture, utilization and storage (CCUS) and nature-based solution (NBS) for carbon removal.

The company aims to provide one-stop solutions for CCUS, expecting costs for the carbon capture technologies to be lowered with high-efficient absorption of the chemical element.  Also, the company is planning to secure NBS carbon credits by investing in planting trees or protecting forests and oceans.

Additionally, it is considering investing in solutions for carbon-intensive manufacturing and circular materials, which are plastics, natural fibers, metals and others that are recycled after the first use phase.

SK expects its green investments will benefit from US Inflation Reduction Act (IRA),  which went effective in August, as the federal law aims to boost clean energy generation with tax credits.

Write to Jeong-Soo Hwang at hjs@hankyung.com
Jihyun Kim edited this article.