LG Chem to set up next-generation bio-oil plant in Korea

South Korea’s LG Chem Ltd. plans to build a next-generation bio-oil plant in the country with a local biodiesel company as the petrochemical maker seeks to secure a stable supply of raw materials for eco-friendly products.

LG Chem said on Sept. 2 it signed a heads of agreement (HOA) with Dansuk Industrial Co. to form a joint venture producing hydrotreated vegetable oil (HVO). They plan to build the country’s first HVO plant in LG Chem’s petrochemical complex in Daesan, about 100 km southwest of Seoul, with an aim to complete its construction in 2024.

HVO, a biofuel made by the hydrocracking or hydrogenation of vegetable oil, is often used for transportation fuel and petrochemical raw materials since it does not freeze at low temperatures. HVO is more advanced than biodiesel. Demand for HVO is expected to increase fivefold to 30 million tons in 2025 from 6 million tons last year due to tougher environmental regulations around the globe.

The JV will allow LG Chem to obtain a stable supply source of raw materials to produce super absorbent polymer (SAP), acrylonitrile butadiene styrene (ABS) and polyvinyl chloride (PVC). The company aims to expand its eco-friendly bioproduct portfolio to more than 30 products within this year. Dansuk plans to make inroads into the HVO business with the JV.

“Through this cooperation, we are able to strengthen the foundation for a stable supply of raw materials for the expansion of eco-friendly products,” said LG Chem’s petrochemical unit head Noh Kug Lae. “We will continue to shift our business portfolio to eco-friendly products and actively target related markets.”

Write to Jung-hwan Hwang at jung@hankyung.com
Jongwoo Cheon edited this article.