LG Chem-Neste signed a strategic partnership agreement
“Production of eco-friendly resins from 100% bio contents”
■ Business synergy expected by using Neste bio-materials in LG Chem's high value-added products
- Producing eco-friendly resins from bio-materials
■ Focus on sustainability strategies: resource virtuous cycle activities and reduction of greenhouse gas emissions
- Reduction in carbon emission by 50% compared to existing products
■ Kug Lae Noh, President of Petrochemicals Company
“LG Chem will achieve its sustainability strategy ‘2050 Carbon Neutral Growth’ by expanding its resource virtuous cycle activities based on bio-materials and eco-friendly materials”
LG Chem announced that it will start producing eco-friendly synthetic resins from bio-materials.
On the 5th, LG Chem announced that it has signed a strategic partnership (MOU) with Finland's Neste, one of the world's largest diesel company, to expand its bio-based, eco-friendly businesses and markets.
Neste is a leading company in the biodiesel field with its own proprietary process technology. 80% of this global company’s operating profit is generated from biofuels and eco-friendly products.
Through this agreement, both companies will be seeking opportunities to commercialize various products based on bio-materials and strengthen their competitiveness in the market, also sharing market intelligence on Asian, European and global markets, and actively cooperating in the product development for new uses.
Although the specifics on the quantity and duration of the cooperation cannot be disclosed due to the agreement, it is safe to say that LG Chem secured a stable delivery of bio-materials for the production of eco-friendly synthetic resins for the coming years.
Neste's bio-based raw materials are produced from vegetable oils such as renewable waste cooking oil and palm oil. Compared to fossil fuels eco-friendly materials have substantially higher GHG reduction effects.
LG Chem plans to produce bio-based PO (Polyolefin), SAP (Super Absorbent Polymer), ABS (High-Value-Added Synthetic Resin), PC (Polycarbonate), and PVC (Polyvinyl Chloride). Its aim is to fully produce products by the second half of next year.
Neste will not only expand its biofuel business by diversifying its business portfolio into the petrochemical sector, but it will also incorporate renewable biobased materials into various high-value added products based on LG Chem’s technology and vertically-integrated business structure.
The timing couldn't have been any better for both parties, as LG Chem announced its sustainability strategy, allowing it to focus on carbon neutrality and resource virtuous cycle activities and as Neste shifted its interest to expanding its business portfolio into the petrochemical line.
With the signing of the MOU, Kug Lae Noh, President of Petrochemicals Company of LG Chem said, “LG Chem’s technology, that of a leading company in Korea’s petrochemical industry, and Neste’s sustainability, that of a world's largest biodiesel company, have come together to build a partnership that will strengthen global competitiveness for both parties.”
And “LG Chem will continue to expand its virtuous cycle business based on bio- and eco-friendly materials to achieve its ‘2050 Carbon-Neutral Growth’ initiative.”
■ Strengthening the ‘Carbon Neutral Strategy’ by aggressively reducing GHG
This partnership will enable LG Chem to start its sustainability strategy in earnest by substantially reducing carbon emission and greenhouse gas.
In July, LG Chem declared “2050 carbon neutral growth” for the first time in the domestic chemical industry to respond to climate change. LG Chem is the first petrochemical company in its sector to self-developed PCR (Post-Consumer Recycled) ABS and new biodegradable materials, while leading by example on Resource Virtuous Cycle Activities and Circular Economy. This partnership allowed LG Chem to apply biobased materials to various flagship product lines.
Based on the same amount of input, biomaterials are up to 50% more effective in reducing greenhouse gases when compared to existing fossil fuel products. Gradually, LG Chem plans to increase the proportion of bio-materials in its production in the future.
LG Chem is also planning to acquire ISCC (International Sustainability and Carbon Certification) for eco-friendly resins produced from biomaterials. The ISCC is an international certification organization consisting of 250 eco-friendly raw material manufacturers, trading companies, NGOs, and research facilities. The certification is issued to the end product based on the amount of carbon emission reduction generated from purchased biofuels and input amount.
LG Chem aims to receive its ISCC bio certification by the first half of next year. Carbon emission will reduce, and related markets will be actively targeted using eco-friendly synthetic resins with the same physical properties as existing ones.