Public-private partnership between the government, Incheon Metropolitan Government, SK and Hyundai Motor accelerates hydrogen business in Korea
- SK presented a blueprint for “SK’s Plan for Hydrogen Business” in the 3rd Hydrogen Economy Committee presided over by the Prime Minister
- By 2025, SK plans on investing 18.5 trillion won in creating a hydrogen eco-system ranging from production to distribution and consumption, creating 209,000 jobs
- The company plans to complete construction of the world’s largest hydrogen liquefaction plant by 2023 and supply 280,000 tons of eco-friendly hydrogen by 2025
- SK will cooperate with all parties including Incheon Metropolitan Government in establishing a hydrogen production cluster and Hyundai Motor in forming “Korean Hydrogen Council”
- Chairman of SK Group Chey Tae-won said, “SK will accelerate the process of building a hydrogen eco-system in Korea to contribute to achieving carbon neutrality.”
SK plans on investing about 18 trillion won for the next 5 years in building a hydrogen eco-system in Korea. On March 2, the company presented a plan to build a hydrogen eco-system in Korea at the 3rd Hydrogen Economy Committee presided over by the Prime Minister at SK Incheon Petrochemical and began the plan.
SK aims at becoming the world’s leading hydrogen company in terms of the hydrogen value chain ranging from production to distribution and consumption of hydrogen by investing in hydrogen infrastructure in Korea and building partnership with global companies.
The Committee meeting was attended by Prime Minister and Chairman of the Committee Chung Sye-kyun, Minister of Trade, Industry and Energy Sung Yoon-mo, Minister of Environment Han Jung-ae, Mayor of Incheon Park Nam-chun, Head of Seo-gu, Incheon Lee Jae-hyun and government officials. Attendees from SK Group included Chairman Chey Tae-won, President of SK Jang Dong-hyun, President of SK E&S and Chair of the SK Hydrogen Business Task Force Choo Hyung-wook, and President of Incheon Petrochemical Choi Yun-seok. From Hyundai Motor, Chairman of Hyundai Motor Group Chung Eui-sun, President of Hyundai Motor Gong Young-woon, President and CEO of Hyundai Motor Chang Jae-hoon, President of Hyundai Mobis Cho Sung-hwan and Vice President of Hyundai Motor Kim Se-hoon joined the meeting. Attendees were provided with information on SK’s strategy to create a hydrogen eco-system and took a tour of a site within SK Incheon Petrochemical where the liquefied hydrogen production base will be located.
SK’s strategy to build a hydrogen eco-system in Korea is primarily in two stages; in the first stage, the company plans on supplying 30,000 tons of liquefied hydrogen, which is the largest in the world, sourcing from by-product hydrogen** by 2023 in connection with Incheon’s “project to build a bio·by-product hydrogen production cluster**”. In the second stage, SK will produce additional 250,000 tons of carbon-free clean hydrogen at a site adjacent to Boryeong LNG Terminal by 2025 with a goal of becoming the world’s leading eco-friendly hydrogen company.
30,000 tons of liquefied hydrogen produced in the first stage is the equivalent quantity of fuel needed for 75,000 units of Nexo, the hydrogen-fueled car, to travel around the world at the same time (about 46,520km) and has the same effect of planting 12 million trees to reduce carbon dioxide, contributing significantly to improving air quality in the metropolitan areas.
The additional 250,000 tons of hydrogen that will be produced in the second stage will enable SK to produce and supply a total of 280,000 tons of environmentally friendly hydrogen every year in Korea. SK also plans to use experience and capabilities it will gain from this business to enter the Asian hydrogen markets such as China and Vietnam.
While building a hydrogen eco-system in Korea, SK expects to create jobs in construction, shipbuilding, and automobile manufacturing as well as in fuel cells and hydrogen production, which will create a total of 209,000 jobs and add 34.1 trillion won of social and economic values.
SK will invest 18.5 trillion won in establishing a value chain encompassing production, distribution and sale of hydrogen
SK E&S which is leading SK Group’s hydrogen business will invest about 500 billion won in building a hydrogen liquefaction plant to achieve the goal in the first stage of producing 30,000 tons of hydrogen. The energy company plans on purchasing 13,000 pyeongs (about 42,975㎡) of a site within SK Incheon Petrochemical Complex in Wonchang-dong, Seo-gu, Incheon and on completing construction of the plant with an annual capacity of 30,000 tons by 2023.
Once the construction of the plant is completed, SK will be able to refine by-product hydrogen provided from SK Incheon Petrochemical to high purity and process it to liquid before supplying it to the metropolitan areas.
The first stage of the plan is significant in that it is “a pillar” of Incheon’s project to build a hydrogen production cluster. Business activities in the first stage are expected to contribute greatly to Incheon’s local economy by helping the city develop new hydrogen-related projects, creating added values, creating employment opportunities and encouraging population inflow to the city. They will also serve as an important foundation for expanding hydrogen infrastructure in Incheon International Airport, Incheon Port and local Industrial complexes.
By 2025, SK E&S will invest 5.3 trillion won in building the world’s largest clean hydrogen production base that produces eco-friendly hydrogen out of LNG as well as in producing and supplying 250,000 tons of carbon-free clean hydrogen*** annually. By using carbon capture and storage, the company plans to produce 250,000 tons of clean hydrogen every year in a single production facility and currently, it is the only company that has such a plan.
SK will make massive investments in constructing hydrogen fueling stations and a fuel cell power plant
SK also plans on investing heavily in providing proper distribution channels of hydrogen when supplying liquefied hydrogen.
The company plans to operate 100 hydrogen fueling stations across the country by 2025 to supply 80,000 tons of liquefied hydrogen every year. It will also build a fuel cell power plant with a capacity of 400 MW to provide 200,000 tons of hydrogen annually through a dedicated pipeline
To this end, SK is discussing and cooperating with Seoul Metropolitan Government in boosting hydrogen economy including building liquefied hydrogen fueling stations, increasing hydrogen-fueled vehicles and establishing a center for direct experience of hydrogen.
At the meeting of the Committee, Chairman of SK Group Chey Tae-won said, “Hydrogen is not affected by weather and requires only a small site for production, which makes it the most proper green energy source for Korea.” He added, “SK will lead the efforts to build a hydrogen eco-system in Korea and commit itself to fulfilling its corporate responsibilities to achieve carbon neutrality by 2050.”
Meanwhile, SK and Hyundai Motor Group have been increasing their cooperation in the EV battery business recently. As the top management of the two groups met at the Committee meeting, there are growing expectations for partnership between the two for hydrogen business as it is facilitated as business for future growth for both groups.
The top management of the two groups had a meeting before the Committee meeting to discuss how to cooperate in building infrastructure for hydrogen fueling and establishing “Korean Hydrogen Council (K-Hydrogen Council)” in the first half of this year. The Council will be for CEOs of Korean companies to work together for hydrogen business. After the meeting, the two groups signed a business agreement with Incheon Metropolitan Government and Incheon Seo-gu Office to build foundations for hydrogen economy. SK as well as other parties to the agreement will cooperate actively to expand hydrogen economy including exploring and supporting different business models for hydrogen.
An SK official said “SK will increase private investment in large-scale hydrogen infrastructure and try to obtain world’s key hydrogen technologies to help achieve the goals of the hydrogen economy roadmap in Korea.” He continued to say, “Hydrogen is a core area of ESG and considered dream energy. SK will strengthen its business structure supported by cooperation with its partners to take the leadership in the hydrogen market.”
In the meantime, SK became the largest shareholder of Plug Power, a leading company in the U.S. hydrogen market, and formed a joint venture with it recently. The company plans on using Plug Power’s technology and business experience to build a hydrogen eco-system in Korea and for the liquefied hydrogen business in Incheon. SK and Plug Power will also come up with a specific plan for cooperation to enter the Asian hydrogen markets together. In late January, SK exercised its option to purchase additional shares of the American company and acquired about 10% of the shares by investing 1.85 trillion won (about $1.6 billion).
*By-product hydrogen: Hydrogen created additionally from processes of oil/chemical plants
**Incheon’s project to build a bio·by-product hydrogen production cluster: Incheon Metropolitan Government’s project to build a self-sufficient hydrogen city supported by by-product hydrogen of SK Incheon Petrochemical and bio-hydrogen sourcing from reclaimed land in the metropolitan areas
***Clean hydrogen: hydrogen that doesn’t generate carbon dioxide in the process of production or hydrogen using carbon capture and storage