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Hydrogen economy

SK E&S eyes $30 billion corporate value as top hydrogen company

The SK Group affiliate is fostering the hydrogen economy as one of its future growth engines

By Sep 01, 2021 (Gmt+09:00)

SK E&S CEO Choo Hyeong-wook unveils the company's hydrogen strategy
SK E&S CEO Choo Hyeong-wook unveils the company's hydrogen strategy

SK E&S Co., the natural gas business unit of SK Group, aims to turn into an eco-friendly company with an enterprise value of 35 trillion won ($30 billion) by 2025 with its business focus on the hydrogen economy.

Under a business strategy unveiled by Chief Executive Choo Hyeong-wook on Wednesday, the company will build a green business portfolio with its focus on four sectors – hydrogen, renewable energy, energy solutions and eco-friendly liquefied natural gas (LNG).

“With the green portfolio, we aspire to become the world’s top eco-friendly company by 2025,” Choo said during an online media briefing.

With a successful implementation of its business strategy, SK E&S will be able to raise its corporate value fivefold to 35 trillion won by 2025 from the current 7 trillion won, he said.

Specifically, the company plans to build one of the world’s largest hydrogen liquefaction factories in Incheon by 2023 and produce 30,000 tons of liquefied hydrogen and 250,000 tons of blue hydrogen annually by 2025.

SK E&S
SK E&S

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.

SK E&S said it will also establish 100 hydrogen fueling stations across the country by 2025.

HYDROGEN, A FUTURE GROWTH ENGINE

The move comes as governments and companies around the world are increasingly adopting a paradigm shift from polluting fossil fuels to clean energy amid tighter environmental regulations.

SK Group, whose energy portfolio ranges from refineries, natural gas and batteries to renewable energy, said in December that it is fostering the hydrogen business as one of its future growth engines.

Plug Power
Plug Power

As part of its hydrogen push, SK Inc., the holding firm of the group, Korea’s third-largest conglomerate, and SK E&S earlier this year invested a combined $1.5 billion to acquire a controlling stake in US hydrogen fuel cell maker Plug Power Inc.

SK E&S CEO Choo said on Wednesday it will cooperate with Plug Power to jointly advance into the rapidly growing Asian fuel cell market, including China and Vietnam.

The company said it also aims to produce 7 gigawatts (GW) of renewable energy and secure 1.2 million tons worth of carbon credits by 2025 to build a hydrogen value chain from production to sale of the clean energy source.

For its existing LNG business, SK E&S plans to import 1.3 million tons of carbon-neutral LNG from 2025, it said.

With the green business strategy, the company expects to raise its revenue and EBITDA to 13 trillion won and 2.8 trillion won each by 2025, from 6 trillion won and 700 billion won, respectively, in 2020.

Write to Jeong-Min Nam at Peux@hankyung.com

In-Soo Nam edited this article.

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