SK Global Chemical to build plant to chemically recycle plastic

From left, Ulsan Mayor Song Cheol-ho and SK Global Chemical CEO Na Kyung-soo sign an agreement to build a plastic recylcying factory in Ulsan, Thursday, at Ulsan City Hall. [SK GLOBAL CHEMICAL]

SK Global Chemical will invest 600 billion won ($522.6 million) in a factory complex in Ulsan that will chemically recycle plastic waste, meaning the plastic will be completely degraded to raw material form.

The wholly-owned subsidiary of SK Innovation, Korea’s largest oil refiner, signed an agreement with Ulsan City government Thursday. The plan is to build a chemical recycling factory on 160,000 square meters of land by 2025. Once it is complete, the Ulsan factory will be able to recycle 184,000 tons of plastic waste a year.

By investment volume and size of land, this will be the largest plastic recycling project in Korea, SK Global Chemical says.

Chemical recycling splits molecule chains of plastic to produce materials like naphtha and crude oil. It is a different technology from mechanical recycling that washes plastic waste and melts it in a way that preserves its molecular structure.

According to SK Global Chemical, mechanical recycling is the more prevalent technology used by plastic recycling businesses in Korea, but chemical recycling is what produces end-products of higher value.

For the massive plastic recycling project, SK Global Chemical teamed up with overseas partners that possess core technology in the field.

In January, the Korean petrochemical firm signed an agreement with Brightmark, a San Francisco-based company that has pyrolysis technology for heating and vaporizing the plastic waste to produce naphtha, which in turn is the base material for a variety of petrochemical products.

Together, SK Global Chemical and Brightmark will build a factory inside the Ulsan complex that could turn 100,000 tons of plastic waster to naphtha per year. Completion for this specific production line is set for 2024. The naphtha will be reused by SK Global Chemical to make other products.

Last month, SK Global Chemical acquired 10 percent of Loop Industries, a Canadian company specializing in depolymerization technology that can recycle polyethylene terephthalate (PET) bottles and polyester fiber into their raw materials.

According to SK Global Chemical, Loop’s technology causes no degradation in quality or strength and can be repeated infinitely, as opposed to traditional mechanical recycling that can cause degradation in PET quality.

SK Global Chemical and Loop will also establish facilities inside the Ulsan complex that can recycle 84,000 tons of plastic waste annually from 2025. The plan is to gradually expand this figure to 2.5 million tons by 2027.

Earlier this month, SK Innovation announced that recycling plastic would be a core part of the company's business. The Ulsan plant is the first concrete plan announced after the pledge.

"The Ulsan complex is the start of our ideation to produce raw materials out of plastic waste," said Na Kyung-soo, SK Global Chemical president and CEO in a Thursday statement. "Starting from Korea, our goal is to take this plastic recycling business to Asia one day and grow into a global leader in the field."

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]