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South Korea's SK Innovation to adopt pyrolysis oil as eco-friendly feedstock for Ulsan refinery

Highlights

Subsidiary SKGC to supply eco-friendly feedstock oil to SK Energy refinery

SK Innovation taking step by step approach towards net zero goal

South Korea's SK Innovation plans to start applying eco-friendly pyrolysis oil in refining and petrochemical production process at its Ulsan complex, in a move that will help the country's third-largest conglomerate accelerate its green business goals after its subsidiary SK Energy announced plans to supply carbon-neutral oil products.

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SK Innovation, the owner of South Korea's top refiner SK Energy, will be the first in the country to introduce pyrolysis oil as feedstock or base material for the refinery process, according to plant operations and marketing sources at the company with direct knowledge of the matter.

SK Energy operates five crude distillation units with a combined capacity of 840,000 b/d in its Ulsan complex.

SK Innovation's petrochemical subsidiary SK Geo Centric, or SKGC, will also employ pyrolysis oil produced through the thermal degradation of plastic wastes as feedstock oil for its downstream operations in Ulsan Complex, the conglomerate said in a statement Oct. 4.

Similar to crude oil and condensate, pyrolysis oil would be employed as a feedstock option for the refinery and petrochemical complex, it added.

SKGC indicated that it will gradually increase the amount of pyrolysis oil used in processes from approximately 200 mt/year or more and conduct empirical research on its effect on production facilities and products.

The pioneering application of pyrolysis oil to the Ulsan refinery and petrochemical complex is the sheer product of joint public-private endeavor to promote a circular economy for plastic resources and environmentally-friendly initiatives, said CEO of SKGC Na Kyung-soo in a statement.

"We will beef up our cooperative ties with the relevant ministries, industries, and academia so as to make a grand transformation from Carbon to Green business based on ESG management," Na said.

Step by step approach

SK Innovation's latest move to adopt pyrolysis oil as its refinery and petrochemical plant feedstock would further enhance the conglomerate and its subsidiaries' ESG profiles, while demonstrating the group's strong commitment to achieve net-zero goal step by step, marketing managers at SK Energy and SKGC said.

SK Innovation said the conglomerate will identify and implement specific action plans to achieve net-zero by 2050, and identify various options that accelerate the time of achievement.

SK Innovation aims to achieve the zero emissions target by 2050 in three phases, it said in its latest ESG report released in the first quarter. For the first two stages, the company would focus on direct reduction at business sites, which involves improvement of process efficiency, adoption of low carbon raw materials, operational optimization, as well as carbon capture, utilization and storage.

It was extremely difficult to employ the existing pyrolysis oil as a raw material for petrochemical products as impurities such as chlorine might turn it into a source of air pollutants or a cause for facility corrosion, according to SKGC.

However, "SKGC developed and applied a post-processing technology to eliminate foreign objects from pyrolysis oil, thereby converting it into eco-friendly feedstock oil," the company said.

The adoption of eco-friendly feedstock comes after SK Energy launched carbon-neutral petroleum products for the first time in South Korea in August.

Carbon neutrality has been achieved by measuring the total greenhouse gas emissions throughout production, shipping, and consumption and offsetting the amount by using Offset Credit earned through greenhouse gas removal and reduction projects, such as afforestation business, SK Energy said.

The country's top refiner has signed a contract with international financial and investment banking firm Macquarie Group Ltd. to secure high-quality Offset Credit from afforestation and prevention of deforestation projects in late July.

Both parties are cooperating for the measurement and offsetting the greenhouse gas emissions. The secured Offset Credit will be applied in SK Energy's carbon-neutral marine fuels and jet fuels available for corporate customers later this year, a refinery official told Platts earlier.