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Hydrogen economy

Lotte Chemical goes green with $3.8 bn investment in hydrogen business

The move comes as the high carbon emitter shifts from its mainstay petrochemicals

By Jul 13, 2021 (Gmt+09:00)

Lotte Chemical aims to transition into an eco-friendly company (Getty Images Bank)
Lotte Chemical aims to transition into an eco-friendly company (Getty Images Bank)

South Korea’s Lotte Chemical Corp. is investing 4.4 trillion won ($3.8 billion) in hydrogen projects by 2030 to foster the business as a new growth driver, moving away from its mainstay petrochemicals.

Under its hydrogen growth roadmap, Green Promise 2030, unveiled on Tuesday, Lotte Chemical said through the investment it aims to generate annual sales of 3 trillion won with an operating profit margin of over 10% in its hydrogen-related business alone by the 2030 pledge date.

The chemical unit of Lotte Group, Korea’s fifth-largest conglomerate, said that the production of hydrogen is at the center of its green growth project over the next decade.

The company said it will establish blue hydrogen facilities with an annual production capacity of 160,000 tons by 2025. It also plans to generate green hydrogen at overseas facilities and bring it to Korea for industrial use, with a target of 440,000 tons a year of green hydrogen by 2030.

Overall, Lotte aims to launch facilities with an annual hydrogen production capacity of 600,000 tons by 2030.

Currently, there are three ways to make hydrogen.

Grey hydrogen is produced when the element is stripped from fossil fuels, while blue hydrogen is produced from natural gas and produces less carbon dioxide (CO2). Green hydrogen is the cleanest variety as it uses renewable energy to produce hydrogen from water.

Lotte Chemical's long-term hydrogen project
Lotte Chemical's long-term hydrogen project

GREEN HYDROGEN ERA

“When the green hydrogen era arrives, we’re going to play a key role in creating an environment where people can use products without worrying about emissions,” said Hwang Jin-gu, chief executive of Lotte Chemical's basic materials business.

“Lotte will build the infrastructure so as not to miss out on the opportunities presented by the hydrogen economy.”

In a bid to diversify its hydrogen business, Lotte Chemical said it will build 50 liquid hydrogen charging stations by 2025 and increase the number of hydrogen fueling stations to 200 by 2030.

Hydrogen fuel cell power plants and turbine generators will also be installed at its petrochemical plants to generate 370 MW of power a year by 2030.

Lotte Chemical's carbon capture and storage facility
Lotte Chemical's carbon capture and storage facility

The company said it will manufacture 100,000 high-pressure hydrogen tanks a year by 2025 and raise such tanks for hydrogen vehicles to 500,000 units by 2030.

With the projects, Lotte Chemical said it aims to take 30% of the domestic hydrogen market by 2030, raising the company’s overall revenue to 50 trillion won with a profit margin of 15%.

Write to Jae-kwang Ahn at ahnjk@hankyung.com

In-Soo Nam edited this article.

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