[Oil Ending] Even Discarded Plastic Cups Are Targets for Extraction... Companies Focusing on 'Urban Oil Fields'

Chemical companies producing fuel from renewable plant resources
and extracting oil again from waste plastics

Petroleum and chemical companies no longer rely solely on oil. They are pursuing new businesses that extract fuels and various industrial raw materials from non-fossil sources such as animal and vegetable waste cooking oil and waste plastics. Representative examples include 'white bio,' which produces chemical products or biofuels from renewable plant resources, and 'chemical recycling' technology that converts waste plastics back into petroleum.

Companies such as LG Chem, HD Hyundai Oilbank, and DS Dansuk are preparing HVO (Hydrogenated Vegetable Oil) projects domestically. HVO is a 'second-generation biodiesel.' First-generation biodiesel contains oxygen molecules, which cause moisture and stability issues, limiting the blending ratio with fossil fuels to about 5%. HVO is produced by removing oxygen from this biodiesel and then hydrogenating it through a catalytic reaction. It possesses various physical properties required for fuel and does not freeze even at low temperatures of minus 50 degrees Celsius. It can be used not only for vehicles but also as aviation fuel and petrochemical raw materials. Eco-friendly biofuels are emerging as essential means to respond to increasingly stringent international environmental regulations, especially in industries like aviation and shipping where direct replacement with electricity or hydrogen is difficult. The global market demand is expected to grow from 9.7 million tons in 2021 to 40 million tons by 2030, representing a high annual growth rate of about 20%.

LG Chem is partnering with Italy's ENI Group's ENI SM to build an HVO joint factory at the Daesan plant in Chungnam. The plan is to complete the factory by 2026 and produce about 300,000 tons of HVO annually. HD Hyundai Oilbank is promoting the construction of biodiesel and HVO-related facilities. This year, it is building a biodiesel manufacturing plant with an annual capacity of 130,000 tons on a 10,000㎡ site at the Daesan plant, and in 2024, it plans to convert some facilities within the Daesan plant to expand production capacity to 500,000 tons annually for HVO. DS Industry is constructing an HVO raw material refining plant with an annual capacity of 300,000 tons in Pyeongtaek, Gyeonggi Province, aiming for pilot production in August next year.

Waste plastic recycling technology is enabling the concept of 'urban oil fields.' Waste plastic recycling methods are divided into mechanical (physical) recycling and chemical recycling. The industry is focusing on chemical recycling rather than mechanical recycling, which simply crushes and washes waste plastics for reuse. Chemical recycling chemically decomposes plastics and converts them into products like pyrolysis oil that can be reused as fuel or raw materials. The quality is maintained, and there is no limit to the number of recycling cycles.

SK Geocentric is building the world's first comprehensive plastic recycling complex, 'Ulsan ARC,' with plans to recycle about 250,000 tons of waste plastics annually starting in 2025. Lotte Chemical is establishing chemical plastic recycling facilities with an annual capacity of 110,000 tons at its Ulsan Plant 2 by next year. It aims to increase sales of recycled plastic products to over 1 million tons by 2030. LG Chem has decided to build a waste plastic pyrolysis oil production facility in the Seokmun National Industrial Complex in Dangjin, Chungnam. Once the plant is completed next year, it will produce more than 20,000 tons of waste plastic pyrolysis oil annually.