LG Chem, Eni eye JV to build biofuel plant in Korea

South Korea’s LG Chem Ltd. and Italy's energy giant Eni Sustainable Mobility (SM) have tentatively agreed to build a hydrotreated vegetable oil (HVO) production plant in South Korea, LG said on Thursday.

If completed, the joint venture plant will become the first HVO facility with its entire supply chain from feedstock to finished products based in Korea, according to LG.

The planned location is at LG Chem’s production complex within the Daesan Petrochemical Complex, South Chungcheong Province.

The facility is set to feed LG Chem’s plant with eco-friendly raw materials to produce bio-circular balanced products, contributing to carbon emission reduction.

For Eni, partnering with LG Chem will help it expand into Asia’s next-generation biofuel market, while expanding its HVO production capacity globally, LG said in a statement.

HVO is a next-generation biofuel made by hydrocracking or hydrogenating vegetable oil such as waste edible oil.

As it does not freeze even at low temperatures it is suitable for automobiles but can also be used as an aviation fuel and a petrochemical raw material.

Eni SM, under Italy’s largest state-run energy group Eni, produces HVO-based energy feedstock, an alternative to naphtha for petrochemical feedstock.

In February this year, the two companies signed a heads of agreement to build a joint HVO plant before entering into formal discussions. They are currently examining the technical and economic feasibilities of the proposed project.

The HVO plant will likely produce about 300,000 tons of biofuel.

Under their tentative agreement, Eni SM will supply LG Chem with feedstock to produce bio super absorbent polymer (SAP), high value-added synthetic resin and polyvinyl chloride through internalization of HVO.

“With this cooperation, we will be able to strengthen our stable raw material supply base to expand eco-friendly certified products,” LG Chem Vice Chairman and Chief Executive Shin Hak-cheol said in the statement.

LG Chem has been manufacturing eco-friendly plastic products using bio naphtha since 2020.

It said global demand for HVO is expected to grow at an average rate of 20% a year from 9.7 million tons in 2021 to 40 million tons in 2030 in line with global renewable energy policies and mandatory use of eco-friendly jet fuel and diesel.

Write to Jae-Fu Kim at hu@hankyung.com
 

Yeonhee Kim edited this article.