SK Invests in Leading US Hydrogen Energy Company... Full-Scale Entry into Global Hydrogen Market

Hydrogen chargers and hydrogen fuel cell forklifts installed in the logistics warehouse of Plug Power's client company.

[Asia Economy Reporter Hwang Yoon-joo] SK has chosen a global hydrogen company as its first investment destination this year, embarking on the full-scale hydrogen business, which is a core area of ESG (Environmental, Social, and Governance) investment and recognized as the next-generation "dream energy."

SK Inc. and SK E&S announced on the 7th that they have secured a 9.9% stake in the U.S. company Plug Power, a global leader in the hydrogen business with industry-leading core technology, becoming the largest shareholder. This investment was made through a joint investment of approximately KRW 1.6 trillion (USD 1.5 billion), with SK Inc. and SK E&S each contributing KRW 800 billion.

Founded in 1997, Plug Power possesses numerous core technologies within the hydrogen business value chain, including vehicle fuel cells (PEMFC), electrolyzers (technology that produces hydrogen by supplying electricity to water), liquefied hydrogen plants, and hydrogen refueling station construction technology. Plug Power has recorded a high sales growth rate of about 50% annually, and as of the end of last year, its market capitalization reached approximately KRW 16 trillion.

Additionally, Plug Power has capabilities in hydrogen-based mobility businesses such as forklifts and trucks that use hydrogen as fuel. It exclusively supplies hydrogen forklifts to global retail companies like Amazon and Walmart, effectively monopolizing the entire U.S. hydrogen forklift supply market. Recently, it has entered the medium- and large-sized truck market by utilizing the hydrogen refueling station network established across the U.S., and is diversifying the use of hydrogen fuel cells into drones, aircraft, and power generation. Furthermore, it is actively expanding its business into the European market, which is proactive in building a hydrogen ecosystem, anticipating high growth in the future.

In the second half of this year, Plug Power will complete and begin full-scale production at the world's largest fuel cell production plant with an annual capacity of 1.5 gigawatts (1.5GW) in New York State, USA. Through this, it is expected to drastically reduce the production cost of its core products, fuel cells and electrolyzers, securing cost competitiveness and solidifying its position as a global leader.

With this investment securing the largest shareholder status in Plug Power, SK plans to accelerate securing leadership in the Asian hydrogen market through synergies between the two companies. Domestically, SK aims to expedite the creation of a hydrogen ecosystem by utilizing Plug Power's technology, while leveraging SK Group's networks in China and Vietnam to seize new business development opportunities. To this end, SK plans to concretize its business model by jointly entering the Asian hydrogen market through the establishment of a joint venture with Plug Power.

Last year, SK established a dedicated hydrogen business organization called the "Hydrogen Business Promotion Team," composed of about 20 experts from related companies such as SK E&S, SK Construction, and SK Innovation, and immediately began executing business strategies. SK has announced plans to focus on nurturing the hydrogen business as a next-generation core energy business by integrating and operating the entire value chain from hydrogen production to distribution and supply, aiming to achieve a total hydrogen production capacity of 280,000 tons by 2025, starting with 30,000 tons in 2023 domestically.

An SK official stated, "We plan to continuously expand our influence in the global hydrogen market by combining SK Group's business capabilities with various external partnerships," adding, "By taking the lead in creating an eco-friendly hydrogen ecosystem, we will establish ourselves as a leading company in ESG management."