Petrochemical and Refining Industries "Unprepared for Carbon Neutrality... Urgent Government Support Needed"

Ministry of Science and ICT-Industry Meeting on the Afternoon of the 18th

▲Refinery reference photo (Asia Economy DB)

[Asia Economy Reporter Kim Bong-su] The petrochemical and refining industries have urged the government to actively support the development of carbon-neutral technologies.

According to the Ministry of Science and ICT on the 18th, Lee Kyung-soo, head of the Science and Technology Innovation Headquarters, met with representatives of major companies in the petrochemical and refining sectors at the Korea Chamber of Commerce and Industry at 2 p.m. to listen to opinions on the 'Carbon Neutral Technology Innovation Strategy Roadmap' and discuss support measures.

At the meeting, Lotte Chemical pointed out the need for new policy research and institutional support from the government for carbon-neutral R&D with high technical difficulty and stable commercialization. They emphasized the need for quick decision-making that can connect industry, academia, and research institutes according to the technology maturity of new R&D and projects.

Hanwha Solutions also stated that large corporations should promote demonstration and commercialization based on their own technologies and value chains, while government-funded research institutes and universities should share roles such as supporting and promoting the development of carbon-neutral core technologies. They highlighted the need to establish a comprehensive carbon-neutral promotion system. Additionally, they called for government tax benefits and other support measures at the early investment stage for the introduction and commercialization of carbon-neutral facilities.

GS Caltex noted that although the refining industry is a high carbon-emitting sector, carbon reduction activities and technology development have been significantly delayed. They requested support for research that develops and verifies technologies step-by-step from the laboratory stage. Given the characteristics of the refining industry, the development of carbon capture, utilization, and storage (CCUS) technologies is essential for carbon neutrality. They also pointed out the urgent need for the government to organize and support related systems such as tax benefits and definitions and incentives for carbon-neutral products.

SK Innovation proposed policy support to accelerate eco-friendly technology development in the petrochemical industry (such as plastic recycling and expansion of bio-based materials), including recognition of carbon emission rights. They also suggested developing a resource circulation system for fossil raw material substitution (bio and waste organic resources) and supplying affordable renewable electricity that reflects the industry's electricity demand.

South Korea's petrochemical and refining industries are representative key export sectors, ranking 4th in the world in ethylene production capacity and 6th in crude oil refining capacity. However, their carbon emissions (2018) account for about 24% (62.8 million tons) of the total industrial carbon emissions (260.5 million tons). Petrochemical companies emit 46.9 million tons (about 18%), and the refining industry emits 15.9 million tons (about 6%) annually.

Meanwhile, the government emphasized at the meeting that securing innovative technologies is essential to achieve the challenging goals of carbon neutrality by 2050 and a 40% reduction in national greenhouse gas emissions (NDC) by 2030. It also introduced that this year’s carbon-neutral R&D budget has been increased by about 23% to 1.9245 trillion won. Last August, through the Carbon Neutral Technology Special Committee, 39 'carbon-neutral core technologies' were selected, including three in the petrochemical and refining sectors: electrification of petrochemical processes, bio-based raw materials and product production, and waste plastic industrial raw materialization.

The Ministry of Science and ICT plans to establish the carbon-neutral technology innovation strategy roadmap, including support measures for the petrochemical and refining sectors discussed at this meeting, by February and use it as a guideline for future government carbon-neutral R&D initiatives.