South Korea’s refineries to spend USD4.5B to develop eco-friendly fuels

South Korea’s leading oil refiners have committed around USD4.5 billion to develop eco-friendly fuels through 2030, responding to tightening environmental regulations globally, according to local media.

SK Innovation, S-Oil, Hyundai Oilbank and GS Caltex signed agreements with the Ministry of Trade, Industry and Energy to help stabilise the domestic market amid energy transition uncertainty.

Second Vice Minister Choi Nam-ho stressed the importance of securing affordable, reliable fuel supplies locally through further collaboration. He said amended legislation enables bolder investments into low-carbon alternatives aligned with national climate goals.

The companies asked for government assistance with regards to issues like feedstock availability, tax incentives and sandbox regulatory approvals to progress research and production scale-up.

Choi emphasised that price stability for essential petroleum products requires shared commitment between public and private enterprises. The partnerships seek to balance South Korea’s environmental ambitions with its import dependency and consumer expectations.

By leveraging respective strengths, the ministry and domestic oil refiners aim to pioneer the development of new sustainable fuels while ensuring South Korea’s energy security. The transition measures will help mitigate South Korea’s climate impact and foster next-generation industries.