LG Chem begins construction of Korea's first 'green diesel' plant
The company announced Monday that construction has started on the HVO plant in Seosan, South Chungcheong Province. Once completed in 2027, the facility is expected to produce 300,000 tons of HVO annually.
HVO, sometimes called green diesel, is produced by using hydrogen to break down vegetable oils, particularly used cooking oil, into smaller molecules. The concept is similar to biodiesel but the different chemistry of the resulting fuel means it is more stable and performs better at low temperatures.
While HVO has around 10 percent lower energy density than petroleum diesel, its proponents claim it can reduce carbon emissions by up to 90 percent. It is used in various applications, including sustainable aviation fuel, car fuel and bio-naphtha — a versatile feedstock in the chemical industry.
LG Chem plans to utilize HVO not only for biofuel production but also to expand its eco-friendly plastics business, which it sees as a core driver of future growth. The company aims to convert bio-naphtha into high-performance plastics used in home appliances, automobiles, sporting goods and hygiene products.
'LG Chem is transforming its business portfolio toward low-carbon models, aiming for both sustainable growth and improved profitability,' said LG Chem CEO Shin Hak-cheol.
'We will continue to drive technological innovation and commercialization in eco-friendly fuel and bio-resources, including HVO, to strengthen our global competitiveness and respond proactively to customer demand.'
The Seosan facility is being developed through a 50:50 joint venture with Italian energy firm Eni, which currently produces 2 million tons of HVO annually at its facilities in Italy and has an extensive global supply network.
An LG Chem official said the new facility will provide the company with more affordable access to bio-based feedstocks for its chemical manufacturing operations, which until now have largely relied on imports from global suppliers.
Competition to secure sustainable raw materials is intensifying worldwide, as companies seek to meet growing customer expectations and regulatory requirements.
According to Fortune Business Insights, the global HVO market is expected to grow at a compound annual growth rate of around 8.2 percent, expanding from approximately $21.36 billion in 2025 to $36.86 billion by 2032.
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Korea Herald
15 hours ago
- Korea Herald
LG Chem begins construction of Korea's first 'green diesel' plant
LG Chem has begun construction on Korea's first hydrotreated vegetable oil production facility, furthering the company's strategy to bring the supply of eco-friendly raw materials in-house amid rising global demand for sustainable alternatives. The company announced Monday that construction has started on the HVO plant in Seosan, South Chungcheong Province. Once completed in 2027, the facility is expected to produce 300,000 tons of HVO annually. HVO, sometimes called green diesel, is produced by using hydrogen to break down vegetable oils, particularly used cooking oil, into smaller molecules. The concept is similar to biodiesel but the different chemistry of the resulting fuel means it is more stable and performs better at low temperatures. While HVO has around 10 percent lower energy density than petroleum diesel, its proponents claim it can reduce carbon emissions by up to 90 percent. It is used in various applications, including sustainable aviation fuel, car fuel and bio-naphtha — a versatile feedstock in the chemical industry. LG Chem plans to utilize HVO not only for biofuel production but also to expand its eco-friendly plastics business, which it sees as a core driver of future growth. The company aims to convert bio-naphtha into high-performance plastics used in home appliances, automobiles, sporting goods and hygiene products. 'LG Chem is transforming its business portfolio toward low-carbon models, aiming for both sustainable growth and improved profitability,' said LG Chem CEO Shin Hak-cheol. 'We will continue to drive technological innovation and commercialization in eco-friendly fuel and bio-resources, including HVO, to strengthen our global competitiveness and respond proactively to customer demand.' The Seosan facility is being developed through a 50:50 joint venture with Italian energy firm Eni, which currently produces 2 million tons of HVO annually at its facilities in Italy and has an extensive global supply network. An LG Chem official said the new facility will provide the company with more affordable access to bio-based feedstocks for its chemical manufacturing operations, which until now have largely relied on imports from global suppliers. Competition to secure sustainable raw materials is intensifying worldwide, as companies seek to meet growing customer expectations and regulatory requirements. According to Fortune Business Insights, the global HVO market is expected to grow at a compound annual growth rate of around 8.2 percent, expanding from approximately $21.36 billion in 2025 to $36.86 billion by 2032.
Korea Herald
5 days ago
- Korea Herald
Korea holds line on chips as US tariff deal offers strategic relief
Samsung, SK hynix gain tariff clarity, but uncertainty lingers ahead of Section 232 ruling South Korean chipmakers expressed cautious optimism Thursday following a tariff agreement between Seoul and Washington that ensures they will not be treated less favorably than other countries in any future US tariffs on semiconductors. Experts say the impact of potential tariffs may be limited as Korean chips, especially advanced memory and foundry products, are difficult to replace and critical to US tech firms' ambitions in artificial intelligence and high-performance computing. 'Korea has secured a commitment to receive treatment no worse than any other country on future tariffs on semiconductors (and) pharmaceuticals, effectively ensuring most-favored-nation status,' Deputy Prime Minister and Finance Minister Koo Yun-cheol said in a briefing after the deal was reached. Following a marathon round of negotiations, the two countries struck a breakthrough agreement just ahead of the Aug. 1 deadline, lowering proposed US reciprocal tariffs on Korean imports from 25 percent to 15 percent. In return, Korea committed to launching a $350 billion investment fund to support US industries, including shipbuilding. Although the US has yet to announce a specific figure for tariff rates on semiconductors, Samsung Electronics, a leading memory and contract chip supplier, said the recent agreement has "helped reduce uncertainty." 'We are closely monitoring follow-up discussions between the two governments on the details of the announced agreement and plan to develop response strategies accordingly,' Samsung Electronics Chief Financial Officer Park Soon-cheol said during the company's earnings call for the second quarter held Thursday. Attention now turns to the US Commerce Department's upcoming decision on a national security probe into chip imports, expected in two weeks, according to US Commerce Department Secretary Howard Lutnick on Sunday. The Donald Trump administration launched the investigation in April under Section 232 of the Trade Expansion Act of 1962 to assess whether US reliance on foreign-made semiconductors and related products, including smartphones and PCs, poses a threat to national security. The probe is widely expected to form the basis for potential new tariffs on chip imports. Industry experts believe the impact of potential US tariffs on chips may be limited, given the relatively low strategic benefit for Washington compared to other industries, such as automobiles and steel, which have faced tariffs of up to 15 percent and 50 percent, respectively. "Imposing tariffs on semiconductors may offer little benefit to the US, as American chipmakers like Micron Technology conduct much of their manufacturing in countries such as Singapore, Japan and Taiwan," said an industry official who requested anonymity. Kim Yang-paeng, a senior researcher at the Korea Institute for Industrial Economics and Trade, echoed these sentiments: "For automobiles and steel, for which the US has a large domestic industry, higher tariffs help American companies. But that is not the case for semiconductors, and the US would not want to challenge its tech giants when their own chipmakers are not strong enough to replace Korea's Samsung Electronics, SK hynix or Taiwan's TSMC." 'Semiconductors are not a sector where the US has many negotiating counterparts. And the more tariffs are raised, the more the US could lose its edge," Kim added. It is also notable that Korea's direct semiconductor exports to the US were $10.6 billion last year, accounting for 7.5 percent of its overall chip shipments, according to the Korea International Trade Association. The figure is significantly lower compared to exports to China with 32.8 percent, Hong Kong (18.4 percent) and Taiwan (15.2 percent). Choi Seok-young, a senior adviser at Lee & Ko and former career diplomat involved in trade negotiations, said Korea "held the line" given its strength in its semiconductors. "Korea avoided a worse outcome. With much uncertainty ahead, it is something we will need to keep watching," Choi said. Samsung Electronics and SK hynix are the world's leading providers of advanced memory chips, together accounting for more than half of the global market share. Amid the AI boom, the two Korean chipmakers are strengthening their presence as key providers of high bandwidth memory chips — a crucial component supporting AI accelerators such as graphic processing units. Their major customers include American GPU giant Nvidia, among others.
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S. Korea's finance minister to hold tariff negotiations with Bessent late Thursday, Korean time
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