LG Chem announced on September 14 that it has partnered with Italy's ENI Sustainable Mobility (SM) to establish a hydro-treated vegetable oil (HVO) joint venture at its Daesan plant in Chungnam, South Korea.
ENI Group, Italy's largest state-owned energy company, is promoting various sustainable strategies, including biofuels and renewable energy, with the goal of becoming carbon neutral by 2050. ENI SM is a subsidiary of ENI Group that leads the HVO-focused green fuel business.
In February, the two companies signed a Heads of Agreement (HOA) to establish an HVO joint venture and are currently working together on technical feasibility and economic assessments.
The plan is to complete the HVO production plant with an annual capacity of approximately 300,000 tons by 2026. This is the first time that an HVO plant capable of integrated production from raw materials to final products will be built in Korea.
HVO is a next-generation bio-oil produced by adding hydrogen to vegetable raw materials such as waste cooking oil. It is characterized by excellent properties that do not freeze even at low temperatures and can be used not only for vehicles but also as aviation fuel and petrochemical raw materials.
The global market demand for HVO is expected to grow from 9.7 million tons in 2021 to 40 million tons in 2030, with an average annual growth rate of 20 percent, in line with global renewable energy policies and mandatory use of eco-friendly jet fuel and diesel.
Once the joint venture is established, LG Chem will internalize HVO to supply raw materials used in the production of bio Super Absorbent Polymer (SAP), Acrylonitrile Butadiene Styrene (ABS), and Polyvinyl chloride (PVC).
LG Chem has expanded its ISCC Plus internationally certified products, a leading means of demonstrating the sustainability of eco-friendly products made from plant-based raw materials, to more than 50.
ENI SM will be able to enter the Asian market based on its established HVO production base, raw material supply chain, and global sales network in Europe, and will gain additional HVO production capacity through the establishment of the joint venture.
"We will continue to drive the transition to eco-friendly, low-carbon raw materials and position ourselves as a truly global company with leadership in carbon reduction," said Shin Shin-chul, Vice Chairman of LG Chem.
