[Market Focus] DS Danseok to Invest 1.1 Trillion Won in SAF... 70-Fold Growth from 240,000 to 18.34 Million Tons Expected

DS Danseok is showing strong performance. The news that the company will invest 1.09 trillion won to build a Net-Zero Complex appears to be influencing its stock price. There are expectations that the establishment of a "Ministry of Climate and Energy," which will be dedicated to addressing climate crisis issues, will soon become a reality following the inauguration of President Lee Jaemyung. There is also a growing outlook that the importance of carbon neutrality will increase.

As of 2:03 p.m. on June 9, DS Danseok was trading at 27,550 won, up 1,600 won (6.17%) from the previous trading day.

The new government is expected to shift the focus of energy policy from industry to climate. While previous energy policies were oriented toward industrial policies utilizing inexpensive energy sources such as coal and nuclear power, the new plan is to focus more on responding to the climate crisis by expanding renewable energy. Among the 15 key policy initiatives pledged by the Lee Jaemyung administration, responding to the climate crisis is included. The core of this policy is to achieve RE100 (100% use of renewable energy) through a transition to eco-friendly renewable energy.

During the presidential election, President Lee pledged to integrate the climate-related functions of the Ministry of Environment and the energy-related functions of the Ministry of Trade, Industry and Energy to establish a Ministry of Climate and Energy, which would serve as a "control tower" for responding to the climate crisis and addressing climate-related social and economic issues.

On this day, DS Danseok signed a large-scale investment agreement (MOU) worth 1.09 trillion won with North Jeolla Special Self-Governing Province for the construction of the Net-Zero Complex. The new plant to be established in Gunsan will serve as the centerpiece of DS Danseok's future strategy. It will be created as an eco-friendly industrial base with integrated production facilities, energy recovery equipment, and recycling infrastructure, all aimed at achieving carbon neutrality.

The Net-Zero Complex refers to a multi-purpose facility equipped with various eco-friendly production facilities, energy recovery equipment, and recycling infrastructure, all with the goal of carbon neutrality. By 2031, DS Danseok plans to sequentially establish production facilities for hydrogenated vegetable oil (HVO)-based biodiesel, bio-aviation fuel, and bio-naphtha on a 70,000-pyeong site within the Gunsan National Industrial Complex.

Last year, DS Danseok signed a raw material supply contract worth about 1 trillion won with global energy company Phillips 66 International Pte. Ltd. The company has also established a hydrogenated vegetable oil pretreatment unit (HVO PTU) required for the production of sustainable aviation fuel (SAF).

According to the International Air Transport Association, the global SAF market was only 240,000 tons in 2022, but is expected to grow rapidly to 18.34 million tons by 2030. However, worldwide, subsidies for the blended use of SAF are also expanding rapidly.