[Upcoming Hydrogen Economy] Lotte Chemical Dreaming of a "Hydrogen Empire"... "Building Supply Chains in Asia and Europe"

Hydrogen Business Sales from 60 Billion KRW in 2021 to 5 Trillion KRW in 2030
Over 20 MOUs Signed for Hydrogen and Ammonia Production and Distribution
Supply to Domestic, Asia, and Europe... Aiming to Secure Global Distribution Network

In May last year, Lotte Chemical announced its goal to achieve 5 trillion KRW in hydrogen business sales by 2030. This is 83 times larger than the 60 billion KRW recorded in 2021. Since the announcement of this blueprint, Lotte Chemical has signed business agreements or invested in more than 20 domestic and international companies related to hydrogen and ammonia over the past year. The company is working to establish a hydrogen economy ecosystem from overseas production to distribution. The goal is to secure a global distribution network by promoting supply not only domestically but also across Asia and Europe.

Lotte Chemical is collaborating with two U.S. companies, including CF Industries, the world's largest ammonia producer, in local production and distribution sectors. It has also formed a global clean ammonia consortium with companies from Germany and Japan to jointly research production and export projects. Among Japan's top five trading companies, three (Mitsubishi, Itochu, Sumitomo) have signed agreements for global hydrogen and ammonia transportation and terminal operations. Additionally, Lotte Chemical is pursuing various projects in cooperation with domestic and international companies such as Air Liquide, Aramco, Korea Electric Power Corporation, POSCO, and Samsung Engineering.

Last year, two joint ventures related to hydrogen were established. Lotte SK Enerute (Lotte Chemical, SK Gas, Air Liquide Korea) and Lotte Air Liquide Enerhigh (Lotte Chemical, Air Liquide Korea) are building a hydrogen fuel cell power plant in Ulsan and the country's largest first commercial high-pressure hydrogen shipping center in Daesan, Seosan City, Chungnam Province, respectively.

The total investment amounts to 6 trillion KRW. Through this, the company plans to produce and distribute a total of 1.2 million tons of clean hydrogen by 2030 to generate profits. Of the 1.2 million tons, 600,000 tons will be supplied for power generation, 450,000 tons for fuel cells and hydrogen gas turbines, and 150,000 tons for transportation. Additionally, by 2030, the company plans to operate 200 hydrogen charging stations and projects with a power generation capacity of 440 MW. In March last year, Lotte Chemical reorganized its structure by establishing the Hydrogen Energy Business Division and the Battery Materials Business Division to lead new hydrogen businesses. To discover new technologies related to clean ammonia, a task force for ammonia hydrogen development consisting of eight researchers from Lotte Fine Chemical was also formed.

Kim Gyo-hyun, Vice Chairman of Lotte Chemical [Photo by Lotte Chemical]

Hwang Jin-gu, head of Lotte Chemical's Hydrogen Energy Business Division, said at last year's growth strategy announcement, "To activate the hydrogen business, we are actively developing core technologies such as water electrolysis, hydrogen conversion from ammonia, and CCUS (Carbon Capture, Utilization, and Storage), which remain gaps in technology." He added, "Lotte is the largest supplier responsible for over 70% of domestic ammonia supply and has the optimal infrastructure to supply and transport hydrogen and ammonia in the early stages of the hydrogen economy."

Since hydrogen in its gaseous state occupies a large volume, it must be liquefied below minus 235 degrees Celsius to store and transport large quantities. Ammonia can solve this problem. By combining hydrogen with nitrogen to form ammonia, storage and transportation become easier. Ammonia, which has long been used as fertilizer, has well-established transportation infrastructure both domestically and internationally.

The ammonia business is led by Lotte Fine Chemical, in which Lotte Chemical holds a 43.5% stake as the largest shareholder. Lotte Fine Chemical, which possesses the largest ammonia storage facilities in the country, recorded ammonia business sales of 988.6 billion KRW last year on a separate basis, accounting for 40.2% of its total sales.

Dry winding hydrogen tank commercialized for the first time in Korea by Lotte Chemical. In September last year, Lotte Chemical completed the establishment of a pilot process facility for the commercialization of hydrogen storage tanks, one of the core components of hydrogen fuel cell electric vehicles (FCEVs).
[Photo by Lotte Chemical]

Methods to re-extract hydrogen from ammonia include thermal decomposition by applying heat and photolysis by exposing it to light. Lotte Chemical and Lotte Fine Chemical have been developing ammonia thermal decomposition technology under a national project received at the end of 2021 and are also pursuing the development and demonstration of a plant that produces 2 tons of hydrogen per day. The two companies have developed the world's first ammonia photolysis technology. Although there were no related standards under the Hydrogen Act to obtain manufacturing permits and inspections, they received a demonstration exemption from the Industrial Convergence Sandbox Review Committee in March this year and plan to establish a facility in Nam-gu, Ulsan, that produces 200 kg of hydrogen per day.

They have also achieved results in technology development for hydrogen storage and utilization. Last year, a pilot facility for commercializing hydrogen tanks, one of the core components of hydrogen electric vehicles, was established at Lotte Aluminum's Incheon plant. This applied Lotte Chemical's independently developed hydrogen tank manufacturing technology, which began in 2017, for the first time in Korea. The facility can mass-produce up to 15,000 medium-sized 50-liter hydrogen tanks annually. The Lotte Chemical hydrogen tank team recently received the R&D award from Chairman Shin Dong-bin at the 'Lotte Awards.'