Establishing Hydrogen Production-Distribution-Consumption Ecosystem
18.5 Trillion KRW Investment by 2025
Liquefied Hydrogen Plant Completion in 2023
Supplying Total 280,000 Tons of Eco-Friendly Hydrogen by 2025
Chairman Chey Tae-won of SK Group (right in the photo) is explaining the liquefied hydrogen plant business plan to Prime Minister Chung Sye-kyun, Chairman Chung Eui-sun of Hyundai Motor Group, and Mayor Park Nam-chun of Incheon. [Asia Economy Reporter Hwang Yoon-joo] SK will actively invest 18 trillion KRW over the next five years to establish a domestic hydrogen ecosystem. SK announced its goal to become the world’s number one hydrogen company in the value chain?from hydrogen production, distribution, to consumption?through investments in domestic hydrogen business infrastructure and partnerships with global companies.
On the 2nd, at the 3rd Hydrogen Economy Committee meeting held at SK Incheon Petrochem with the Prime Minister presiding, the plan to build a domestic hydrogen ecosystem was finalized and full-scale business execution began. The event was attended by government and local officials including Prime Minister and Hydrogen Economy Committee Chairman Chung Sye-kyun, Minister of Trade, Industry and Energy Sung Yun-mo, Minister of Environment Han Jeong-ae, Mayor of Incheon Park Nam-chun, and Seo-gu District Mayor of Incheon Lee Jae-hyun.
From the corporate side, SK Group was represented by Chairman Chey Tae-won, SK Inc. President Jang Dong-hyun, SK E&S President and Head of SK Hydrogen Business Promotion Team Chu Hyung-wook, and SK Incheon Petrochem President Choi Yoon-seok. Hyundai Motor Group attendees included Chairman Chung Eui-sun, Hyundai Motor President Gong Young-woon, Hyundai Motor President Jang Jae-hoon, Hyundai Mobis President Cho Sung-hwan, and Hyundai Motor Vice President Kim Se-hoon. The attendees listened to SK’s hydrogen ecosystem construction strategy and toured the site within SK Incheon Petrochem where a liquefied hydrogen production base will be established.
Chairman Chey Tae-won of SK Group (from the left), Prime Minister Chung Sye-kyun, and Chairman Chung Eui-sun of Hyundai Motor Group attended the hydrogen industry ecosystem establishment proclamation ceremony held at SK Incheon Petrochem on the 2nd. SK’s domestic hydrogen ecosystem creation strategy will proceed in two main phases. In the first phase, by 2023, SK plans to supply 30,000 tons of liquefied hydrogen?the world’s largest scale?based on by-product hydrogen in connection with Incheon City’s ‘Bio and By-product Hydrogen Production Cluster Project.’ In the second phase, by 2025, SK aims to produce an additional 250,000 tons of clean hydrogen free of carbon dioxide near the Boryeong LNG terminal, achieving the status of the world’s number one eco-friendly hydrogen company.
The 30,000 tons of liquefied hydrogen produced in the first phase is enough to power 75,000 hydrogen fuel cell vehicles, such as the Nexo, to simultaneously travel around the Earth once (approximately 46,520 km). This has a carbon reduction effect equivalent to planting 12 million trees and is expected to significantly contribute to improving air quality in the metropolitan area and other environmental aspects. With the additional 250,000 tons produced in the second phase, SK will produce and supply a total of 280,000 tons of eco-friendly hydrogen annually in Korea. Leveraging this business experience and capability, SK plans to actively expand hydrogen projects in Asia, including China and Vietnam.
In building the domestic hydrogen ecosystem, SK expects to create jobs not only in construction, shipbuilding, and automobile manufacturing but also in fuel cells and hydrogen production sectors, generating an employment inducement effect of 209,000 jobs and social and economic benefits worth 34.1 trillion KRW. SK Group Chairman Chey Tae-won said, "SK will contribute to realizing an eco-friendly hydrogen economy by utilizing its existing petrochemical and liquefied natural gas (LNG) business experience and infrastructure," adding, "We will do our best to ensure that Korea not only achieves carbon neutrality by 2050 but also secures world-class competitiveness in the hydrogen industry and contributes to economic growth."
Prime Minister Chung Sye-kyun visited the planned site of SK Incheon Petrochem's liquefied hydrogen project on the 2nd to check the progress of the liquefied hydrogen plant with Hyundai Motor Group Chairman Chung Eui-sun (third from the left), SK Group Chairman Chey Tae-won (right), and others. Building Value Chain from Production to Distribution and Sales
Total Investment of 18.5 Trillion KRW over 5 Years
SK E&S, SK Group’s hydrogen business subsidiary, will invest approximately 500 billion KRW to build a liquefied hydrogen production base to achieve the first phase goal of producing 30,000 tons of liquefied hydrogen. SK E&S plans to purchase about 13,000 pyeong (approximately 42,900 m²) of land within the SK Incheon Petrochem complex in Wonchang-dong, Seo-gu, Incheon, and complete a hydrogen liquefaction plant with an annual capacity of 30,000 tons by 2023. This facility will purify by-product hydrogen supplied from SK Incheon Petrochem to high purity, process it into liquid form, and supply it to the metropolitan area.
The first phase project is also significant as a key part of Incheon City’s hydrogen cluster construction project. It is expected to greatly contribute to the local economy by discovering new hydrogen-related businesses, creating high added value, inducing new employment, and attracting population. It will also serve as an important foundation for expanding hydrogen infrastructure at Incheon International Airport, Incheon Port, and industrial complexes.
Furthermore, SK E&S plans to invest about 5.3 trillion KRW by 2025 to complete the world’s largest clean hydrogen production base producing eco-friendly hydrogen from natural gas (LNG). The goal is to produce and supply 250,000 tons of clean hydrogen annually with carbon dioxide removed. The plan to produce 250,000 tons of clean hydrogen annually at a single production base using carbon capture and storage technology is currently unique to SK E&S’s clean hydrogen production plan.
Construction of Hydrogen Refueling Stations and Fuel Cell Power Plants
"Production Possible in Small Areas Without Climate Impact"
SK Strengthens Domestic and International Partnerships
Along with supplying liquefied hydrogen, SK will actively invest in establishing a distribution system for eco-friendly hydrogen. By 2025, SK plans to operate 100 hydrogen refueling stations nationwide, supplying 80,000 tons of liquefied hydrogen annually, and build fuel cell power plants with a capacity of about 400 MW to supply 200,000 tons of hydrogen annually through dedicated pipelines.
As part of this effort, SK is also discussing various cooperation measures with Seoul City to promote the hydrogen economy, including building liquefied hydrogen refueling stations, expanding hydrogen vehicle adoption, and establishing hydrogen experience centers. Chairman Chey Tae-won stated, "Hydrogen is an eco-friendly energy suitable for Korea’s environment because it is not affected by climate and requires a small land area for production," adding, "By leading the creation of Korea’s hydrogen ecosystem, SK will fulfill its corporate responsibility to achieve carbon neutrality by 2050."
Meanwhile, as SK and Hyundai Motor Group recently strengthened their partnership in the electric vehicle battery business, the meeting of key executives from both groups has raised expectations for their hydrogen business partnership, which is being accelerated as a future growth engine. Prior to the Hydrogen Economy Committee meeting, the executives held a roundtable to discuss concrete cooperation plans such as collaborating on hydrogen refueling infrastructure construction and establishing the "K-Hydrogen Council," a CEO consultative body for hydrogen business cooperation among domestic companies, to be launched in the first half of the year.
Chairman Chey said, "Through the cooperation system between the two companies?SK building the entire hydrogen value chain from production to distribution and consumption, and Hyundai Motor supplying hydrogen vehicles in a timely manner with its hydrogen vehicle manufacturing technology?the domestic hydrogen economy will grow rapidly."
Recently, SK has decided to form a joint venture with Plug Power, a leading U.S. hydrogen market company in which SK secured a majority stake. SK plans to utilize Plug Power’s technology and business experience in the liquefied hydrogen business and domestic hydrogen economy ecosystem construction, and to concretize cooperation for joint entry into the Asian hydrogen market. As of the end of January, SK exercised an additional stock purchase option, investing a total of 1.85 trillion KRW (1.6 billion USD) to hold about 10% equity in Plug Power.
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