SK becomes first Korean oil producer from plastic waste

SK Group has become South Korea's first company to extract oil from plastic waste and use the eco-friendly oil as a feedstock of oil refining and petrochemical processes, according to SK Geo Centric Co.

SK Geo Centric has begun to supply pyrolysis oil, or oil produced through the thermal decomposition of used plastics, to SK Innovation Co.'s refineries and petrochemical plants from Sept. 28 in its Ulsan complex, South Korea.  The pyrolysis oil will then transform into petrochemical products, it said in a statement on Friday.

SK Innovation owns 100% of SK Geo Centric, which recently underwent a corporate name change from SK Global Chemical Co., to reidentify itself as a plastic upcycling company.

Previously, pyrolysis oil had not been used as a feedstock of refiners and petrochemical facilities because they contain impurities such as chlorine, which cause corrosion of facilities. To solve the problem, SK Geo has developed a post-processing technology to remove the impurities, in cooperation with a research institute and a thermal decomposition-specialized company in the country.

Earlier this year, SK Geo announced a plan to to build a thermal decomposition plant for plastic recycling in the city of Ulsan, together with Brightmark LLC, a US waste recycling company. The plant, once completed for commercial operation in 2024, will be able to handle 200,000 tons of plastic waste a year.

SK Geo plans to invest 5 trillion won ($4.2 billion) to expand its plastic recycling capacity to 900,000 tons a year by 2025. It will then further increase the capacity to 2.5 million per year by 2027, with a goal of becoming a leading urban oil field company in the world.

SK Geo is a leading petrochemical company in South Korea, which relies on crude oil imports for almost all of its needs. 

Its parent company SK Innovation last month put on hold indefinitely its plan to sell up to a 49% stake in SK Geo Centric Co. to private equity firms because of a wide price gap.

Write to Kyung-min Kang at kkm1026@hankyung.com
Yeonhee Kim edited this article.