SK Lubricants- Ministry of Trade, Industry and Energy- SMEs, MOU on Recycling Waste Lubricant Oil into Raw Materials

[Asia Economy Reporter Jeong Dong-hoon] SK Lubricants is set to fully launch a business that produces low-carbon base oils, the raw material for lubricants, by recycling waste lubricants. In particular, the company plans to create a resource circulation ecosystem by collaborating with small and medium-sized enterprises (SMEs) involved in the collection and refining of waste lubricants.

On the morning of the 6th, SK Lubricants and the Ministry of Trade, Industry and Energy held a multilateral memorandum of understanding (MOU) signing ceremony related to the "Waste Lubricant Regeneration and Raw Material New Business" at the Grace Hall of L Tower in Seocho-gu, Seoul. Attendees included Kim Won-ki, Vice President of SK Lubricants; Choi Nam-ho, Director General of Industrial Policy at the Ministry of Trade, Industry and Energy; and Kim Taek-hoon, President of Clean Korea.

The companies participating in this MOU agreed to collect waste lubricants, which were previously used as low-cost fuel oil in thermal power plants and boilers, and manufacture base oil raw materials through primary and secondary refining. These materials will then be produced into low-carbon base oil products and supplied to the market. The upcycled base oil, regenerated by adding design and usability value to waste lubricants, can significantly reduce carbon emissions and air pollutant discharge compared to simple incineration.

Specifically, waste lubricant collection and refining companies such as Clean Korea, Deok-eun Interline, Daelim, and Sebang Refinery will collect waste lubricants and complete primary and secondary refining. SK Lubricants will then receive these materials to produce and sell low-carbon base oils. During this process, the Ministry of Trade, Industry and Energy will support the market launch of lubricant products using waste lubricants through a regulatory sandbox. The regulatory sandbox is a system that exempts or defers existing regulations for a certain period when introducing new products and services in new business or technology fields.

SK Lubricants aims to reduce greenhouse gases generated from incineration through this waste lubricant upcycling and to establish a resource circulation ecosystem by collaborating with SMEs involved in waste lubricant collection and refining.

According to the Klein Report, as of 2020, 487,000 kiloliters of waste lubricants are generated annually in South Korea, of which 350,000 kiloliters are used as heating or power plant fuel oil. Since burning waste lubricants as fuel oil causes air pollution, regenerating them into high-quality base oils is expected to have a carbon emission reduction effect.

Kim Won-ki, Vice President of SK Lubricants, said, "SK Lubricants will actively promote the 'lubricant upcycling' business as part of the company's financial story to build a circular economy. Through close cooperation with the Ministry of Trade, Industry and Energy and technical support for waste lubricant refining for SMEs, we will do our best to establish this MOU as a representative domestic circular economy model based on public-private cooperation."