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ESG management

SK to create $27 bn in addt'l net asset value via hydrogen business

By Dec 02, 2020 (Gmt+09:00)

SK to create  bn in addt'l net asset value via hydrogen business


SK Holdings Co., the holding company of South Korean conglomerate SK Group, aims to be at the forefront of the country's hydrogen ecosystem as part of its shift toward environmental, social, and governance (ESG) management.

On Dec. 1, SK Holdings announced that it recently created a task force committed to fostering hydrogen business as the group’s future growth driver. The holding company has been reviewing the validity of a hydrogen business while formulating a strategy since the beginning of the year. 

“The existing market is being destroyed. We need to set ESG as the new model for corporate management and create a new future growth story,” SK Chairman Chey Tae-won told affiliates during a CEO seminar in October.

True to his word, SK Holdings and its affiliates are actively fostering the growth of the hydrogen ecosystem in Korea.

SK Chairman Chey Tae-won
SK Chairman Chey Tae-won



SK Holdings is set to create a plant that can annually produce 30,000 tons of liquid hydrogen and distribute it to metropolitan areas from 2023. SK Innovation will supply the byproduct hydrogens.

Also, SK Holdings plans to produce 250,000 tons of blue hydrogen from 2025 by utilizing the natural gas supply secured by SK E&S Co., which directly imports three million tons of liquified natural gas (LNG) annually.

In the long term, SK Holdings aims to establish an eco-friendly hydrogen supply system without any carbon dioxide emissions through green hydrogen production that uses renewable energy.

SK TO FOSTER SOUND HYDROGEN ECOSYSTEM 

In Korea, the hydrogen industry is still in its early stages and locked in a vicious cycle wherein existing hydrogen businesses hesitate from investing in facilities due to limited demand alongside an insufficient shipping and recharging infrastructure.

Meanwhile, SK Holdings is well versed in fostering ecosystems as it has set up integrated value chains in energy sectors such as oil and LNG. As a seasoned player, the Korean company is determined to instill a virtuous cycle in the domestic hydrogen ecosystem.


SK's first station for both LPG and hydrogen built in Incheon in Nov. 2019 as part of a pilot program
SK's first station for both LPG and hydrogen built in Incheon in Nov. 2019 as part of a pilot program


SK Holdings plans to develop 280,000 tons of production capacity by 2025 and use SK Energy’s gas stations and delivery truck stops, among other sites, as hubs for green energy services. Also, it will help increase demand for power such as hydrogen fuel cell power plants.

In addition to production facilities, the Korean energy giant intends to secure core technologies to target the global hydrogen market as it plans to tap into other Asian markets including China and Vietnam.

SK Holdings will invest in overseas companies with original technology related to hydrogen while also entering global partnerships to gain a competitive edge in the hydrogen business.

The company anticipates it can create additional net asset value of around 30 trillion won ($27.2 billion) by 2025.

The group's commitment to renewable energy reflects SK Chairman Chey Tae-won’s determination to make ESG the mainstay of corporate management. Recently, SK Holdings was the first Korean company to announce its commitment to RE100, reflecting its ESG management drive.

“We hope to become a group that takes the lead in ESG management not only at home but also globally,” said an SK Holdings official.

Write to Man-su Choe at bepop@hankyung.com

Danbee Lee edited this article.

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