Importing 200,000 Barrels per Year of 'Net Zero Crude Oil' for 5 Years Starting 2025
Refining Net Zero Crude Oil to Sell Eco-Friendly Aviation Fuel and Other Products
[Asia Economy Reporter Moon Chaeseok] SK Trading International (SKTI), a subsidiary of SK Innovation, is introducing the world's first 'Net Zero Oil (NZO)'.
On the 23rd, SK Innovation announced that its subsidiary SKTI signed the world's first contract to import 200,000 barrels of net zero oil annually for five years starting in 2025 from Occidental Petroleum. Based on aviation fuel, 200,000 barrels is enough for about 9,000 round-trip flights between Seoul and Jeju Island.
The production principle of net zero oil is to directly capture an amount of carbon dioxide from the air equal to the CO2 emitted throughout the crude oil lifecycle?from extraction, refining, to combustion?and inject it into oil wells for permanent storage. Unlike existing carbon-neutral oil, NZO achieves carbon neutrality within the oil business's own supply chain without the need to purchase carbon credits from external markets.
Occidental is the first company in the world to develop and commercialize net zero oil technology using Direct Air Capture (DAC). Through a large-scale DAC facility in the Permian Basin, Texas, USA, it plans to capture about 1 million tons of carbon dioxide annually starting in the second half of 2024 to produce net zero oil.
DAC is a technology that directly captures trace amounts of carbon dioxide present in the air, which is more advanced than the existing Carbon Capture and Storage (CCS) methods that extract CO2 from power plants or industrial facilities. This is because it can process carbon dioxide without spatial constraints.
SKTI plans to refine the net zero oil imported through this contract to produce eco-friendly aviation fuel and other products. Starting in 2025, it aims to reduce about 100,000 tons of carbon emissions annually based on Scope 3. This is equivalent to planting about 4 million trees over an area 25 times the size of Yeouido (20 million pyeong).
Scope 3 refers to indirect emissions excluding direct emissions (Scope 1) and related indirect emissions such as purchased electricity and gas (Scope 2) that occur throughout the entire production and consumption process of a product. SKTI is actively pursuing Scope 3 emission reductions as part of the 'Carbon to Green' strategy being implemented together with SK Energy.
Richard Jackson, CEO of Occidental, said, "We are honored to present a new solution for decarbonization strategies in the oil industry through our partnership with SKTI using Occidental's carbon direct capture-enhanced oil recovery (DAC-EOR) method. Net zero oil is one of the meaningful attempts in the energy transition process and will serve as a very important bridge toward a net zero economy."
Seokwon Seo, President of SKTI and CEO of SK Energy R&S CIC (Company in Company), said, "We are pleased to be the first in the world to introduce net zero oil produced by Occidental, one of the global energy industry's leaders. We expect to contribute to responding to climate change in a new way by building a business ecosystem for net zero oil and net zero products amid the massive environmental changes of the energy transition."
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