Due to Corporate Restructuring and Global Environmental Shifts,
SK Geocentric and GS Caltex Slow Down Their Plans
LG Chem Maintains Completion Target for This Year... "Investment Is Essential"
The waste plastic recycling business, once touted as a future growth engine for the domestic refining and petrochemical industry, is stagnating. Although companies have successively announced their entry into related fields, buoyed by the wave of eco-friendly management, the downturn in the petrochemical sector and the launch of the ‘Trump 2.0’ administration in the U.S. have reduced investment incentives in green businesses, leading to a slowdown.
According to the industry on the 3rd, plans by refining and chemical companies to build ‘waste plastic recycling plants’ are either postponing previously announced groundbreaking dates or remaining in the review stage, showing little progress. SK Geocentric completed site selection in the Ulsan area aiming for completion this year, but actual construction has been repeatedly delayed since its announcement in 2022. SK Geocentric planned to pursue three projects?▲high-purity polypropylene (PP) extraction, ▲PET depolymerization (a technology that breaks down PET polymers using catalysts), and ▲pyrolysis oil production?with respective global partners. However, due to the sluggish market and the resulting need for efficient management, the decision-making process has been postponed for now.
GS Caltex, which aimed to operate a waste plastic pyrolysis oil production plant last year, stated, "The demonstration project is ongoing, and the plant construction is under review." Since 2021, GS Caltex has been conducting a demonstration project injecting waste plastic pyrolysis oil into the petroleum refining process at its Yeosu plant. The plan was to build a plant based on the demonstration project to produce pyrolysis oil directly, but they are still considering the appropriate timing and have not yet invested in plant construction.
Lotte Chemical also revised its original goal set in 2020 to build a chemically based recycled PET plant at its Ulsan Plant 2. The target completion date, initially set for 2024, has been pushed back three years to 2027. A Lotte Chemical official said, "We are adjusting the pace, not canceling the eco-friendly policy," but added, "There is no change in the decision to postpone plant investment."
These companies pushed forward with building waste plastic recycling plants around 2021, riding the wave of ‘Environmental, Social, and Governance (ESG) management’ sweeping the industry. This was a proactive response to the global standard shift favoring ESG-compliant companies and eco-friendly products. However, this new investment direction has become a burden on the industry shaken by low-cost competition from China. Moreover, with the inauguration of President Donald Trump, the U.S. has reduced emphasis on green policies, leading to voices suggesting that such investments might be premature.
However, LG Chem plans to complete a waste plastic pyrolysis oil plant and a biodegradable bioplastic plant within this year, demonstrating strong commitment to eco-friendly businesses. Shin Hak-cheol, Vice Chairman of LG Chem, mentioned in his New Year's address, "Let’s analyze all costs from zero base," while also stating that the company will focus intensive investment on sustainable businesses.
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