SK Global Chemical to start plastic waste recycling business in Asia

SK Global Chemical (SKGC), a petrochemical subsidiary of SK Innovation Co., plans to build a plastic waste recycling plant in South Korea to extract raw materials for chemical production from  trash to launch the business in Asia as the group aims to turn into an eco-friendly company.

SKGC plans to invest 600 billion won ($522.6 million) in South Korea’s largest plastic waste recycling factory in Ulsan, which can process 184,000 tons of trash a year, about 60% of the country’s total plastic waste, the company said on July 8. Its construction will be completed in 2025. SKGC aims to expand the business to Asia by setting up three more plants in the region, raising total capacity to 400,000 tons per year by 2030.

The plant, dubbed as an "eco-friendly city oilfield," extracts raw materials such as naphtha, a key feedstock for petrochemicals, from plastic waste instead of crude oil. SKGC operates a petrochemical complex including a naphtha cracker in Ulsan, southeast of Seoul.

“We will expand the plastic waste recycling business beyond Korea to Asia through the idea of a city oilfield that extracts raw materials from plastic waste,” said SKGC President & CEO Na Kyung-soo. “We will complete ESG (environment, social and governance) management by growing into a global company driving a virtuous cycle of plastic waste resources."

FIRST ‘CARBON TO GREEN’ PROJECT

The investment was the first project unveiled since SK Innovation on July 1 announced a long-term goal of "carbon to green" with a plan to spend 30 trillion won in green projects by 2025.

SKGC will apply chemical recycling technologies such as thermal dissolution and depolymerization rather than mechanical recycling methods, which are not adept at recycling contaminated plastics.

It will set up a pyrolysis facility with a processing capacity of 100,000 tons a year by 2024 with Brightmark LLC, a US pyrolysis oil manufacturer. In January, SKGC and Brightmark signed a memorandum of understanding (MOU) for the commercialization of waste plastic pyrolysis and investment in the construction of a plastics renewal plant in South Korea.

SKGC is set to build a depolymerization unit that can process 84,000 tons of trash per year by 2025 with Loop Industries, a Canadian-based Nasdaq-listed company that owns patented depolymerization technology that recycles waste polyethylene terephthalate (PET) plastics and polyester fiber.

SKGC said on June 23 it decided to buy a 10% stake in Loop. Both companies intend to form a joint venture next year with exclusivity to commercialize Loop’s sustainable PET plastic and polyester fiber manufacturing technology throughout Asia.

At that time, SKGC said they plan to begin construction of a production facility, with an unspecified location, that can annually recycle 84,000 tons of waste PET in 2023, then accelerate this to process a total of 400,000 tons of waste PET per year by building four production facilities in Asia by 2030.

Write to Hyung-Kyu Kim and Kyung-Min Kang at khk@hankyung.com
Jongwoo Cheon edited this article.