- Corporate News
SK to develop net-zero products in tie-up with Occidental
SK Trading International (SKTI), a subsidiary of South Korea’s SK Innovation Co. Ltd., said an agreement with Occidental Petroleum Corp. will allow it to develop net-zero products such as low-carbon aviation fuel.
Under the agreement, SK Trading may purchase up to 200,000 barrels of net-zero oil per year for five years to produce these net-zero products.
The so-called “net-zero oil” will be created by combining crude oil together with environmental attributes generated from sequestering atmospheric carbon dioxide (CO2) capture at a large-scale Direct Air Capture (DAC) facility which is expected to be online in late 2024. A subsidiary of Occidental’s Oxy Low Carbon Ventures business, 1PointFive, will build the DAC facility, using the Direct Air Capture technology from Carbon Engineering. and will then sequester the CO2 in Occidental’s enhanced oil recovery (EOR) reservoirs in the U.S. Permian Basin.
To produce the environmental attributes that are utilized for the net-zero oil, Occidental plans to inject approximately 100,000 tonnes of captured atmospheric CO2 volumes per year, which is equal to the expected CO2 emissions from the entire crude oil lifecycle, including extraction, transportation, storage, shipping, refining, subsequent use, and combustion.
Net-zero oil, which is compatible with existing refinery infrastructure, can help hard-to-abate industries advance their net-zero commitments by providing an affordable, scalable fuel option that does not contribute to additional atmospheric CO2, according to Occidental.
SK Trading International, along with SK Innovation, has declared its 2050 Net Zero Journey and is actively developing its action plans to become net zero and even accomplish it earlier than planned. Under its “Carbon to Green” strategy, the company is transforming its overall portfolio with an emphasis on low-carbon business, and is also pursuing measures to manage Scope 3 carbon emission intensity. The introduction of net-zero oil is well aligned with the company’s net-zero commitments and is expected to not only tackle climate change but also accelerate the company’s sustainable growth.
“We are pleased to be a part of the world’s first carbon emission reduction initiative that is underpinned by processing net-zero oil on a life-cycle analysis basis. We are also thrilled to team up with Occidental, one of the most respected energy companies in the world,” said SUH Sokwon, president and CEO of SK Trading International and president of SK Energy Refinery Business.
He added that “the sustainable business ecosystem built around net-zero oil and low carbon products will contribute to global net zero efforts in a new way.”