Two-track Business Strategy
SK innovation will invest 1 trillion won in three green businesses by 2026. In particular, half of the investment will be spent on hydrogen and ammonia projects. The company will pursue a two-track business strategy of increasing the proportion of green businesses while maintaining the existing petrochemical business.
According to industry sources on July 19, SK innovation will invest 1.79 trillion won in three green businesses including hydrogen and ammonia, bioenergy, and carbon capture and storage (CCS) by 2026. The company will invest 149 billion won in 2023, 350 billion won in 2024, 220 billion won in 2025, and 360 billion won in 2026.
Among the three areas, SK innovation will put the most efforts into the hydrogen and ammonia business. The company will invest 545 billion, half of its investment, over four years to secure future energy supply technologies such as hydrogen and ammonia energy. In addition, the company will invest 33 billion won in domestic waste gasification technology to produce bioenergy and 10 billion won in securing CCS-related technologies and business development.
The reason why SK Innovation is steadily increasing its investment in green businesses is to implement the all-time net-zero policy announced in 2022. SK Group Chairman Chey Tae-won announced the vision of all-time net-zero at SK Innovation’s 60th anniversary celebration held at the Korea Chamber of Commerce and Industry in Seoul in mid-October 2022, saying, “We will offset all carbon emissions since our foundation by 2062.”
In June of the same year, SK Innovation invested US$30 million (about 37.9 billion won) in Amogy, a U.S. company that developed ammonia-based fuel cell system technology, followed by an additional US$50 million (about 63.2 billion won) in March of this year. SK innovation believes that Amogy, which has technology to generate power without carbon emissions by injecting ammonia as a fuel for fuel cells, matches well with the carbon-to-green strategy that SK innovation is pursuing.
In July 2022, SK innovation invested US$20 million (about 25.3 billion won) in Fulcrum BioEnergy, a U.S. company that produces synthetic crude oil by gasifying waste. In July last year, Fulcrum BioEnergy completed the world’s first 40,000-ton synthetic crude oil production plant based on municipal waste in Nevada of the United States. SK innovation is also reportedly considering entering the Asian market for the waste gasification business with Fulcrum BioEnergy.
In May, SK Innovation, along with SKIET, made an equity investment in Airrain, a gas membrane specialist. Airrain is a company that produces gas membranes and provides design, production, and technical services for membrane modules and systems utilizing them. SK innovation plans to combine its current LiBS manufacturing technology with Airrain’s gas membrane technology to develop the membrane capture market. Unlike the existing wet and dry methods, carbon capture using membranes does not use chemicals or water other than membranes, so it begets no waste or wastewater.