LG Chem, GS EPS to build $248 million biomass power plant

LG Chem Ltd., South Korea’s top chemicals maker, said on Tuesday it has signed a contract with GS EPS Co. to build a 320 billion won ($248 million) biomass power plant.

Under the deal, which follows their heads of agreement (HOA) signed in June, the two companies will construct the Yeosu Green Power plant near LG Chem’s chemicals complex in Yeosu, South Jeolla Province.

When it begins commercial operation in the first half of 2026, the biomass plant will produce industry-usable steam and electricity using wood chips.

The new plant is expected to reduce carbon emissions by 400,000 tons annually, the equivalent of planting 2.8 million pine trees, according to the companies.

Wood chips, or waste wood, is recognized as a sustainable biomass not just in Korea but in the European Union, they said.

“Carbon reductions through this biomass will become a key element for us to achieve 2030 carbon neutrality alongside major initiatives we’re currently promoting. LG Chem will continue its efforts to become a company that leads eco-friendly innovation,” said Noh Kug-lae, president of LG Chem’s petrochemicals business division.

The electricity generated from Yeosu Green Power will be supplied to LG Chem’s Hwachi plant at its industrial complex through a power purchase agreement.

GS EPS Chief Executive Jung Chang-soo said: “We will continue our partnership with LG Chem, which is leading Korea’s efforts to achieve net-zero carbon emissions.”

GS EPS, a unit of GS Group, a Korean energy-to-retail conglomerate, is the country’s first private power producer.

Write to Ik-Hwan Kim at lovepen@hankyung.com
In-Soo Nam edited this article.