SK Innovation implements Internal Carbon Pricing System to strengthen global Net Zero leadership

MOSCOW (MRC) -- SK Innovation announced on the company’s official homepage that it would further boost the global Net Zero leadership by introducing an Internal Carbon Pricing System, said Polymerupdate.

The core of the Internal Carbon Pricing System is to set internal carbon prices to reflect changes in future carbon prices and use them in investment deliberations. This is to evaluate the economic feasibility of investments from a comprehensive perspective, including future carbon values, in addition to the existing investment evaluation factors, and at the same time, to reduce carbon emissions more actively when promoting new businesses. This improvement plan was reported to the board of directors in mid-November and will be implemented in due course.

Under this scheme, reducing carbon emissions raises the “values” of investments. However, on the other hand, increasing emissions raise their “costs,” allowing a comprehensive analysis of the economic feasibility of investment. In other words, since reducing carbon emissions improves the economic feasibility of investment, and the increased potential carbon emissions from the expansion of new plants reduce the economic feasibility, priorities can be determined from an ESG perspective.

SK Innovation announced that it set the internal carbon prices at a reasonable level considering future carbon price scenarios predicted by various global professional organizations, which aimed to drive the net zero emissions roadmap announced last year. SK Innovation announced that it set the internal carbon price at a reasonable level considering future carbon price scenarios predicted by various global professional organizations to enhance the execution power of the net zero roadmaps announced last year. By 2030, prices will be diversified by major regions with global business sites such as the EU, the US, and Korea, which will be set at USD 40 to 95/ton in 2025 and USD 60 to 105/ton in 2027. The mid-to-long-term prices will be USD 120/ton in 2030 and USD 200/ton in 2040.

In the future, SK Innovation plans to manage the prices of global carbon credits as a key indicator that greatly affects business performance along with oil prices and exchange rates. To this end, the relevant departments of SK Innovation and its eight subsidiaries have decided to monitor market trends and continue to seek countermeasures closely.

Meanwhile, SK Innovation is reinforcing its ESG leadership by introducing an internal carbon price system, following the declaration of the All Time Net Zero vision at the company’s 60th anniversary celebrated in October this year. Through its systematic Net Zero strategy implementation, SK Innovation has achieved tangible results as of 2022 by reducing greenhouse gas emissions by more than 15% compared to 2019.

Kim Tae-jin, Chairman of ESG Committee, SK Innovation’s Board of Directors, said, “The implement of the Internal Carbon Pricing is in line with the expectations of external stakeholders. The pricing reflects future carbon prices as costs in corporate management decisions and discloses whether they are appropriately applied.” She further emphasized that “The Board will do its best to improve further the current carbon reduction and overall performance of ESG efforts.”

We remind, SK geo centric (SKGC; Seoul, South Korea) signed an HOA (head of agreement) for building advanced recycling (pyrolysis) plant within its recycling cluster in Ulsan with Plastic EnergyLtd., the UK-based advanced plastic recycling technology company, in Seoul, South Korea. The signing ceremony was attended by the top management of both companies including CEO of SKGC Na Kyung-soo and CEO of Plastic Energy Carlos Monreal.
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LyondellBasell and Audi announce a first time collaboration to help close the loop for mixed automotive plastic waste, said the company.

Audi is installing plastic seatbelt buckle covers in the Q8 e-tron made using LyondellBasell plastic that supports the sourcing of feedstocks from mixed automotive plastic waste. Plastic components from customer vehicles that can no longer be repaired are dismantled, shredded, and processed by chemical recycling into pyrolysis oil. The pyrolysis oil is then used as a raw material in LyondellBasell’s manufacturing process for the production of new plastics, replacing virgin fossil feedstocks. The recycled content is attributed to the Audi product via a mass balance approach.

“As part of the PlasticLoop project, we are working with Audi to establish an innovative closed-loop process, recycling plastic automotive parts for use in new vehicles,” said Erik Licht, LyondellBasell Advanced Polymer Solutions New Business Development Director.“ For the first time, we are using chemical recycling to recycle mixed automotive plastic waste into plastic granulate for automotive interior applications. The plastic granulate is then used in the production of the seatbelt buckle covers for the Audi Q8 e-tron."

With this process, LyondellBasell, Audi, and chemical recycler SynCycle (Next Generation Group and BDI), succeed in recycling a stream of material which today is mostly only suitable for energy recovery. This reduces the usage of fossil-based primary materials for the Audi Q8 e-tron and keeps valuable feedstocks in a circular loop. Materials produced from pyrolysis oil are of the same high quality as virgin materials and have the same properties. Chemical recycling offers an alternative to energy recovery and complements mechanical recycling.

"Audi's vision is to use secondary materials wherever it is technically possible, economically viable and ecologically beneficial." says Philipp Eder, Project Manager for Circular Economy in the Supply Chain at Audi. “The PlasticLoop project is part of Audi's circular economy strategy and a good example of cross-sector cooperation within the Audi supply chain. Findings from the project are also incorporated into the product development of future vehicle projects via the "Design for Recycling" approach.”

We remind, LyondellBasell announced it has made a decision to move forward with engineering to build an advanced recycling plant at its Wesseling, Germany. Using LyondellBasell's proprietary MoReTec technology, this commercial scale advanced recycling plant would convert pre-treated plastic waste into feedstock for new plastic production. The final investment decision is targeted for the end of 2023.
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LNG import capacity in the European Union (EU) and the United Kingdom (UK) will expand by 34%, or 6.8 B cubic feet per day (Bcf/d), by 2024 compared with 2021, said Hydrocarbonprocessing.

According to the International Group of Liquefied Natural Gas Importers (GIIGNL) and trade press data. Expansions of import, or regasification, capacity will total 5.3 Bcf/d by the end of next year and grow further by an additional 1.5 Bcf/d by the end of 2024.

LNG regasification capacity in the EU-27 and the UK remained relatively stable and expanded modestly in the last 10 years, by 2.8 Bcf/d (16%), from 17.5 Bcf/d in 2012 to 20.2 Bcf/d at the end of 2021, according to data from GIIGNL. Since Russia’s full-scale invasion of Ukraine in February 2022 and the reduction in natural gas pipeline imports from Russia that followed, European countries have reactivated development of previously dormant regasification projects and have started development of new projects.

Many of the new regasification projects in Europe can be developed relatively quickly by chartering Floating Storage and Regasification Units (FSRUs) and by building pipelines to transport regasified natural gas to connecting pipelines onshore. Other regasification projects in Europe will expand capacity at the existing onshore terminals and implement upgrades to increase existing terminals' throughput.

So far this year, approximately 1.7 Bcf/d of the new and expanded LNG regasification capacity has been added in the Netherlands, Poland, Finland, Italy, and Germany. The new EemsEnergy terminal in the Netherlands (0.8 Bcf/d capacity) consists of two FSRU vessels and received its first import cargo in September 2022. A new FSRU terminal at Wilhelmshaven Port in Germany (0.7 Bcf/d capacity) has been completed in November 2022.

As per MRC, China Petroleum & Chemical Corporation (Sinopec) and QatarEnergy have signed a long-term Liquified Natural Gas (LNG) purchase and sales agreement for the annual supply of four million tons of LNG to Sinopec. Both parties will work together on Qatar's North Field Expansion Project. The 27-year long-term LNG purchase and sale agreement is an important part of the integrated cooperation between the two sides. Sinopec Chairman Ma Yongsheng and Qatari Minister of State for Energy Affairs, President and CEO of QatarEnergy, H.E. Saad Sherida Al-Kaabi, formally signed the agreement together during an online ceremony.
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Chevron Corp received a U.S. license allowing the second-largest U.S. oil company to expand its production in Venezuela and bring the South American country's crude oil to the United States, said Reuters.

The decision grants broader rights for the last big U.S. oil company still operating in U.S.-sanctioned Venezuela. However, it restricts any cash payments to Venezuela, which could reduce the oil available to export.

License terms are designed to prevent state-run oil firm Petroleos de Venezuela, known as PDVSA, from receiving proceeds from Chevron's petroleum sales, U.S. officials said. The license lasts for six months and will be automatically renewed monthly thereafter, the U.S. Treasury said.

The U.S. authorization "brings added transparency to the Venezuelan oil sector" and allows Chevron to benefit from sales of "oil that is currently being produced" by its joint ventures with PDVSA, the California-based company said in a statement.

Following oil sanctions on Venezuela in 2019, Chevron received an exemption to trade its Venezuelan crude to recoup pending debts. But those privileges were suspended a year later. Chevron's four PDVSA joint ventures produced about 200,000 barrels per day of crude oil and exported the crude around the world prior to the sanctions.

The United States issued the license on the same day that Venezuela and opposition leaders began a political dialogue in Mexico City by agreeing to ask the United Nations to oversee a fund providing food, healthcare and infrastructure to Venezuelans.

We remind, Chevron Phillips Chemical Company LLC and QatarEnergy announced that they are proceeding with the construction of an USD8.5 B integrated polymers facility in Orange, Texas, expected to create more than 500 full-time jobs and approximately 4,500 construction jobs and generate an estimated USD50 B for the community in residual economic impacts.

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Maire Tecnimont announced that its subsidiary KT – Kinetics Technology has been awarded an EPCM (Engineering, Procurement & Construction Management) contract by Motor Oil Hellas (MOH) for a new C3 splitter unit to be implemented inside the Corinth Refinery, in Greece, said Hydrocarbonprocessing.

MOH is a leading oil refining company in Greece and a key market player in Southern Europe and the Mediterranean region.

The contract value is equal to EUR80 MM and relates to the execution of a new C3 splitter unit aimed at separating the mixture of propane and propylene coming from the existing fluid catalytic cracking unit in order to produce polymer grade propylene, one of the most important building blocks for the entire chemical industry.

The contract's scope of work includes full engineering activities and supply of all materials and equipment as well as construction supervision services, while construction activities will be carried out by subcontractors directly selected by the client, under KT-Kinetics Technology’s responsibility and management. The Corinth Refinery is among the most complex refineries of its kind in Europe and processes crude oil of various characteristics to produce a full range of high-end products.

Alessandro Bernini, Maire Tecnimont Group Chief Executive Officer, commented: “This important award represents a new significant step to strengthen the business relationship with a leading player such as MOH, thanks to our technological know-how and process expertise, which will ensure the best environmentally performing standards. We are glad to support the industrial development plans envisaged by MOH, as it is set to play an increasingly strategic role in the energy transition in the Mediterranean region”.

We remind, Maire Tecnimont’s subsidiary NextChem, through the associate company GCB Polymers, inaugurates a new re-processing and upcycling plant for polymers today in the Kezad Industrial Zone, in the UAE capital city Abu Dhabi. This new plant processes a very wide range of polymer products, from near to prime to the lower end of plant scraps, post-industrial and post-consumer waste, and also recycled polymers.

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