SK Holdings, the holding company of SK Group, set up a new group dedicated to the hydrogen business to enter the industry. Its goal is to obtain the hydrogen production capacity of 280,000 tons and establish the full hydrogen value chain ranging from production to distribution and supply.
SK Holdings announced on Tuesday that it formed a new hydrogen business group, which consists of 20 experts from SK Group’s energy-related subsidiaries, such as SK Innovation and SK E&S. The business group will be in charge of managing the subsidiaries’ capabilities to implement strategies for hydrogen business, which is garnering attention as a next-generation environment-friendly energy source.
“The decision was made after examining the feasibility of entering the hydrogen market and strategies since the beginning of this year,” said a member of SK Holdings. “We plan to strengthen the domestic hydrogen market ecosystem and accelerate our efforts for sustainable management with a focus on the environment, society, and governance as Chairman Chey Tae-won has stressed.”
SK Holdings also announced plans to mass-produce hydrogen and build a supply system by utilizing the infrastructure of its subsidiaries, such as SK E&S and SK Incheon Petrochem. They are intended to concentrate SK Group’s energy business capabilities to create an environment-friendly hydrogen ecosystem.
First, SK E&S will construct liquid hydrogen production facilities with an annual capacity of 30,000 tons from 2023. Byproduct hydrogen supplied by SK Innovation will be liquified at a liquefaction plant and later supplied to Seoul and the nearby region. Byproduct hydrogen refers to hydrogen produced from industrial facilities, such as petroleum and chemicals. It has been mainly wasted so far instead of recycling ㄷ to difficulties with production and distribution.
SK E&S will begin to build a mass-production system of blue hydrogen – hydrogen produced by carbon capture and storage – from 2025 with a plan to produce 250,000 tons of blue hydrogen using liquefied natural gas (LNG). As the biggest private LNG company in South Korea, SK E&S directly imports over three million tons of LNG annually. “We will also produce green hydrogen, which is produced using renewal energy, such as solar and wind power, in the long-run,” a member of SK Holdings said.
SK Group believes that the global hydrogen ecosystem is at a very early stage. The penetration of hydrogen trucks is slow due to the lack of hydrogen transportation and charging infrastructure while the existing hydrogen businesses find it difficult to increase production facilities and investment due to the lack of demand.
“SK Group has the experience of leading the creation of ecosystems in the existing energy industry, such as oil and natural gas,” said a member of SK Holdings. “SK Energy’s gas stations and rest areas for cargo trucks will be utilized as service hubs to expand our business into not only hydrogen for cars but also for power generation.”
The South Korean company will actively invest in and form partnerships with companies that have core technologies to obtain business competitiveness and enter the Asian market, including China and Vietnam. SK Holdings expects that its hydrogen business will create a net asset value of 30 trillion won across SK Group by 2025.
Dong-Il Seo firstname.lastname@example.org