LG Chem Daesan Plant Plans to Establish HVO Factory by 2026
LG Chem is taking steps to internalize bio-based raw materials necessary for the production of eco-friendly certified products.
On the 14th, LG Chem announced that it is partnering with Italy's ENI SM (Sustainable Mobility) to establish a joint HVO (Hydro-treated Vegetable Oil) plant at its Daesan site in Chungnam Province.
ENI Group, Italy's largest state-owned energy company, is pursuing various sustainable strategies such as biofuels and renewable energy with the goal of carbon neutrality by 2050. ENI SM, a subsidiary of ENI Group, leads the eco-friendly fuel business centered on HVO.
After signing a Heads of Agreement (HOA) for the establishment of the HVO joint plant last February, the two companies are currently conducting technical feasibility and economic evaluations together. They aim to complete an HVO production plant with an annual capacity of approximately 300,000 tons by 2026. This will be the first HVO plant in Korea capable of integrated production from raw materials to final products.
HVO is a next-generation bio-oil produced by adding hydrogen to plant-based raw materials such as waste cooking oil. It is characterized by excellent low-temperature freezing resistance, making it suitable not only for vehicle fuel but also for aviation fuel and petrochemical raw materials. Especially, due to global renewable energy policies and mandates for eco-friendly aviation fuel and diesel use, the global market demand for HVO is expected to grow at an average annual rate of about 20%, increasing from 9.7 million tons in 2021 to 40 million tons by 2030.
This collaboration aligns the interests of LG Chem, which is focusing on expanding Bio-Circular Balanced products that apply plant-based oils to reduce carbon emissions and secure eco-friendly raw materials, and ENI SM, which aims to expand its next-generation biofuel business into Asian and global markets.
Once the joint venture is established, LG Chem will secure a supply base for raw materials used in the production of bio SAP (superabsorbent polymer), ABS (high value-added synthetic resin), PVC (polyvinyl chloride), and others through HVO internalization. LG Chem has currently expanded its ISCC Plus international certified products, a representative means of proving the sustainability of eco-friendly products using plant-based raw materials, to more than 50 items.
ENI SM will be able to enter the Asian market based on its existing HVO production hubs, raw material supply chains, and global sales networks established in Europe, while also securing additional HVO production capacity through the joint plant.
Shin Hak-cheol, Vice Chairman of LG Chem, said, "This collaboration strengthens a stable raw material supply base for expanding eco-friendly certified products. We will continue to promote the transition to eco-friendly, low-carbon raw materials and establish ourselves as a true global company demonstrating leading leadership in carbon reduction."
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