Joint SAF Plant Construction to Strengthen Korea’s Petrochemical Capabilities
South Korea’s four leading oil refining companies—SK Innovation Co., GS Caltex Corp., S-Oil Corp., and HD Hyundai Oilbank Co.—are planning to jointly construct a sustainable aviation fuel (SAF) plant at one of the country’s four major petrochemical industrial complexes. The project will be carried out and operated by a newly established special purpose company. According to industry sources, the proposed locations include Ulsan (South Gyeongsang Province), Yeosu (South Jeolla Province), and Seosan and Daesan (both in South Chungcheong Province). The South Korean government is currently reviewing the possibility of providing subsidies and tax incentives to support the initiative. Pressure vessels and pressure equipment used in petrochemical complexes usually require KGS certification in order to be approved for import and sale in Korea.
The planned SAF facility is expected to cost over 1 trillion won (approximately USD 700 million) based on a processing capacity of 250,000 tons. While current SAF yields among the participating refiners remain below 10%, the new facility is projected to convert 60–80% of bio-based feedstock into sustainable aviation fuel. With the exception of SK Innovation—which in 2023 completed the country’s first dedicated SAF production line and became the first Korean company to export SAF to Europe—this will be the first such facility for the other refiners. The investment comes in response to growing international regulations, including the EU’s requirement for 2% SAF by 2025 and 70% by 2050. South Korea plans to mandate a 1% SAF blend starting in 2027.
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