SK Energy's Cho Kyung-mok "Considering Entry into Clean Energy Power Generation Business"

3 Years Since the Launch of the CIC System

[Asia Economy Reporter Choi Seoyoon] Cho Kyungmok, President of SK Energy, stated, "Flexible response to rapidly changing management environment scenarios and efforts toward low-carbon and eco-friendly growth are the solutions for a sustainable company."

In an interview with SK Innovation's news channel SKinno News, President Cho revealed SK Energy's management blueprint for this year, saying, "The company that understands carbon issues best can present the best solutions." He also emphasized that SK Energy, a pioneer and living witness of the domestic energy industry, must transform into a leading company producing and supplying future eco-friendly energy.

SK Energy reorganized into a CIC (Company in Company) system in 2021. It has two CICs: R&S (Refinery & Synergy), centered on petroleum refining business, and P&M (Platform & Marketing), focused on petroleum product distribution business.

President Cho said, "R&S is actively preparing to produce eco-friendly products based on recycling and renewables for the green transition of the refining industry and is reviewing entry into clean energy power generation business." He added, "P&M is focusing on becoming an eco-friendly platform business based on network assets and marketing capabilities."

Cho Kyungmok, President of SK Energy [Photo by SK Energy]

Regarding this year's achievements of the R&S CIC, he pointed out that planning and executing carbon reduction strategies, including process efficiency improvement and eco-friendly fuel transition, are bringing the company closer to the goal of achieving carbon neutrality (net zero) by 2050. For the P&M CIC, he mentioned that they have stably operated a hydrogen fuel cell demonstration project at gas stations, establishing a business foundation, and secured core technological capabilities to transform into an 'eco-friendly mobility platform' through collaborations with companies in various fields such as electric vehicle charging and car washing.

As the Russia-Ukraine war that broke out last year prolongs and predictions for the global energy market this year diverge, President Cho forecasted, "The global energy supply-demand imbalance, which has become more prominent after the war, is greatly impacting the world economy and security, and it will continue to unfold in various forms during the ongoing energy transition."

He continued, "In a situation of increased volatility where risks and opportunities coexist, we intend to strengthen our performance structure and make more sophisticated efforts in crisis response," citing the "steadfast implementation of the financial story" as the best way to cope with uncertain environments.

Regarding the Carbon Reduction Certification Center, established within SK Group in 2021 and transferred to the Korea Chamber of Commerce and Industry last year, he said, "We established carbon reduction performance measurement standards for products and services necessary for SK Group's net-zero initiatives, resulting in the registration of 17 methodologies and the issuance of 730,000 tons of voluntary carbon credits." He added, "We look forward to creating greater value by utilizing the data accumulated here in cooperation with the Korea Chamber of Commerce and Industry."

One area SK Energy is closely examining this year is the "change in the energy & mobility paradigm." President Cho said, "When we started business in Ulsan in 1962, the management environment was probably more uncertain than now," and added, "If we overcome it together, we can achieve even more hopeful results for the future this year."