Thursday, March 28, 2024
Thursday, March 28, 2024
HomePet Industry NewsPet Travel NewsOil companies move to plastic recycling as Korean gov't pushes for green

Oil companies move to plastic recycling as Korean gov’t pushes for green

Date:

Related stories

-Advertisement-spot_img
-- Advertisment --
- Advertisement -
Plastic waste at a recycling sorting center in Jung District, central Seoul [JOONGANG SUNDAY]

Plastic waste at a recycling sorting center in Jung District, central Seoul [JOONGANG SUNDAY]

 
With environmental bans pressuring the oil and petrochemicals industry to move away from traditional fossil fuels, companies are eyeing a breakthrough in plastic recycling.
 
Korea’s major oil refiners and petrochemicals companies — including SK Innovation, GS Caltex, Lotte Chemical and LG Chem — have started coming forward since last year with multimillion or even billion-dollar plans to enter the plastic recycling business, with combined investments of roughly over 2.2 trillion won ($1.7 billion) over the next two or three years.
 
SK Innovation plans to build a 215,000-square-meter (2.31 million-square-foot) plastic recycling factory at its Ulsan refinery. The facility will have an annual processing capacity of 250,000 tons.
 
A total of 1.7 trillion won will be put into the project, which will be underway from September 2023 to 2025.
 
In late November, GS Caltex announced a 113-billion-won investment by 2024 to build a chemical recycling facility with an annual capacity of 50,000 tons and an aim to increase the production capacity to 1 million tons.
 
LG Chem also said in November that it is constructing a 310-billion-won chemical recycling plant in Dangjin, South Chungcheong, which is scheduled to be completed by 2024.
 
Lotte Chemical is investing 100 billion won to build a chemical recycling facility by 2024, with a capacity of 110,000 tons a year. Hyundai Chemical, a 60-40 joint venture between Hyundai Oilbank and Lotte Chemical, built a new petrochemical plant with a chemical recycling capacity of 30,000 tons, and is considering expanding that to 100,000 tons.
 
Local manufacturers are focusing on the chemical recycling of plastic waste.
 
Unlike mechanical recycling, which is applicable to only limited types of plastics, chemical recycling changes the chemical structure of plastic waste, and therefore can be applied to a wider variety of plastics while maintaining the product quality.
 
Yet its high cost is the biggest barrier to entering the chemical recycling business, as achieving economy of scale and securing advanced technologies are the preconditions to make the math work.
 
“Demand is certainly there, and will only grow in time, though whether the companies will be able to make ends meet with the business may be a different matter.” said an oil refining industry insider, who wished to remain anonymous.
 
For the chemical recycling business to “make economic sense,” a processing capacity of about 100,000 tons is needed, according to IHS Markit data quoted in the Financial Times’s March report.
 
Chemical recycling also has a bigger environmental impact than mechanical recycling at its current point, and the technology and infrastructure are still in their infancy in Korea.

 
“Considering the lack of the economy of scale and the energy costs, the profitability of chemical recycling is still low,” said Lee Eun-young, director at Samil PwC, an accounting and consulting firm.
 
But Lee added that “the market is expected to grow in the future, backed by the government policy and technological support.”
 
Chemical recycling is considered “crucial in realizing the circular economy” due to its versatility.
 
“About 70 percent of discarded plastic waste cannot be mechanically recycled due to contamination, mixed raw materials, colorant and other reasons,” said Wee Jung-won, analyst at Kyobo Securities.

 
“Overall, about 18.9 percent of total plastic waste is actually being recycled. That is why chemical recycling, which can make a wider variety of plastic waste recyclable, is urgently needed.”
 
The local government is also eagerly promoting chemical recycling. The target is to bump up the chemical recycling rate from 2020’s 0.1 percent to 10 percent by 2030.
 
One of the major push factors is the strengthening of regulations on plastic waste worldwide.
 
Starting January 2021, the European Union began to impose a tax of 0.8 euros ($0.8) per kilogram of non-recycled plastic packaging waste. Europe aims to recycle 50 percent of its plastic packaging by 2025, and 55 percent by 2030. Starting in 2030, European plastic makers will be required to use at least 30 percent recycled content in their products as well.
 
Plastic was Korea’s tenth-largest export item to the European region in 2020, with an annual export volume of $1.3 billion.
 
Moreover, as China prohibited the import of most plastic waste in 2017, countries that have been exporting their plastic waste to China scrambled to strengthen environmental regulations while promoting resource recycling.
 
Amid this global transition, big names in the fossil fuel industry such as Germany’s BASF and Saudi Arabia’s Sabic have been diversifying their business portfolio into chemical recycling, and Korean companies are following suit.
 
“Due to the latest crude price hikes and stronger environmental regulations, the issue of profitability, which has been the biggest obstacle to chemical recycling so far, was solved,” according to an IBK Securities report published on Oct. 31.

 

With an increasing number of companies joining the recycling business, plastic waste prices have been soaring over the past two years. The average price of compressed PET stood at 394.3 won per kilogram in May this year, up 82 percent compared to two years ago.
 
To secure a stable supply of plastic waste, the government is pushing to improve the plastic sorting process through deregulation and investments.
 
A consultation committee of recycling companies also agreed in November that companies in the plastic sorting business will invest in upgrading their technologies and facilities to improve the recycling rate.
  
The Environment Ministry plans to cut down a waste levy and increase subsidies for companies running chemical recycling businesses starting next year.
 
Moreover, the government allocated 49.2 billion won toward the research and development of advanced plastic recycling technologies by 2025, up from 7.3 billion won in 2019.
 
The global plastic recycling market is expected to reach $63.8 billion by 2027 from last year’s $42.4 billion, according to Samil PwC.

BY SHIN HA-NEE [[email protected]]

- Advertisement -
Pet News 2Day
Pet News 2Dayhttps://petnews2day.com
About the editor Hey there! I'm proud to be the editor of Pet News 2Day. With a lifetime of experience and a genuine love for animals, I bring a wealth of knowledge and passion to my role. Experience and Expertise Animals have always been a central part of my life. I'm not only the owner of a top-notch dog grooming business in, but I also have a diverse and happy family of my own. We have five adorable dogs, six charming cats, a wise old tortoise, four adorable guinea pigs, two bouncy rabbits, and even a lively flock of chickens. Needless to say, my home is a haven for animal love! Credibility What sets me apart as a credible editor is my hands-on experience and dedication. Through running my grooming business, I've developed a deep understanding of various dog breeds and their needs. I take pride in delivering exceptional grooming services and ensuring each furry client feels comfortable and cared for. Commitment to Animal Welfare But my passion extends beyond my business. Fostering dogs until they find their forever homes is something I'm truly committed to. It's an incredibly rewarding experience, knowing that I'm making a difference in their lives. Additionally, I've volunteered at animal rescue centers across the globe, helping animals in need and gaining a global perspective on animal welfare. Trusted Source I believe that my diverse experiences, from running a successful grooming business to fostering and volunteering, make me a credible editor in the field of pet journalism. I strive to provide accurate and informative content, sharing insights into pet ownership, behavior, and care. My genuine love for animals drives me to be a trusted source for pet-related information, and I'm honored to share my knowledge and passion with readers like you.
-Advertisement-

Latest Articles

-Advertisement-

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Captcha verification failed!
CAPTCHA user score failed. Please contact us!