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June 21, 2010 02:00 AM

SK Chemicals pushes green technology R&&D

Steve Toloken
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    South Korean conglomerate SK Chemicals believes the key to surviving as a plastics manufacturer long term is to become much more efficient with existing fossil-fuel feedstocks and develop non-fossil alternatives like making plastics from carbon dioxide.

    The Seoul-based company, for example, plans to bring on stream an 88 million-pound-per-year olefins facility later this year, using a new, lower-temperature cracking process it claims boosts olefin production by 25 percent, while cutting raw material use and carbon-dioxide emissions by 20 percent, compared with conventional steam crackers.

    And the firm said it is making progress on what it calls “breakthrough” technology making polymers from carbon dioxide.

    A rapidly changing business climate — from rising energy costs and much cheaper resin coming out of the Middle East — gives companies little room for error, said Sang Hoon Park, who heads SK's China operations.

    “Over the past years, the industry has been struggling with an incredible shift in short-term dynamics,” Park said in an address at Flexpo 2010, held June 9-11 in Beijing. “To win this competition, it is important to quickly detect changes in the global environment. The weapon needed to overcome this hurdle is technological innovation.”

    While Park said SK sees opportunities with its new cracking process, dubbed “advanced catalytic olefins,” he said the firm also sees potentially far-reaching developments from its research on making plastics partly from carbon dioxide.

    SK successfully started a pilot plant in October, which it claims is the world's first continuous-process manufacturing of a carbon-dioxide-based polymer.

    For long-term sustainability, the petrochemical industry must lessen its dependence on fossil-fuel feedstocks, said Park, who also is president of SK's technology innovation center in Seoul.

    “We are more or less required to use fossil fuels for the next decade or so,” he said. “[But] capturing carbon dioxide is a key. We must improve our technology to use captured CO2 to make commercially viable products like polymers.”

    The company's Greenpol resin is made with 44 percent carbon dioxide, by weight, with the key to manufacturing being a proprietary catalyst the company has developed, Park said.

    SK sees the polymer, which currently is in customer trials, as a possible “eco-friendly” insulator, a replacement for soft PVC or for non-toxic barrier resins in food packaging, Park said.

    He said the firm projects initial commercial production in the range of 44 million to 110 million pounds, but Park said decisions on commercializing will be made after another one or two years of market development work.

    Still, he said it's the first time the technology has become “very feasible” economically, because of SK's combination of catalysts and manufacturing process.

    SK is one of Korea's largest companies, with interests in energy, chemicals, telecommunications and trade, and is Asia's fourth-largest energy company. The company has PET resin manufacturing plants in South Korea, China, Poland and Indonesia.

    SK is moving forward with “green” developments in part because, like other Asian petrochemical makers speaking at the Beijing edition of the Flexpo conference, it is worried about how it will compete against a flood of cheap plastic from Middle Eastern producers in the medium term, Park said.

    “The Middle East will still have cost production advantages,” he said. “Even including logistics costs, petrochemical production from the Middle East will be cost competitive compared to Europe and Asia. … The [Middle East's] cost competitiveness cannot be overestimated.”

    Rising costs of oil and fossil-fuel extraction in the long term make it crucial to explore other technologies for plastics, he said.

    Fossil fuels like oil, gas and coal will remain critical to meeting energy needs for at least 20 years, still accounting for almost 80 percent of energy produced in 2030.

    But rising energy demands worldwide will put more pressure on the environment, he said. The growing world population and rising living standards will push energy demand up 45 percent between 2006 and 2030, with 87 percent of the new demand coming from developing economies like India and China, he said.

    Park also said SK plans to start commercial production of its new Nexlene polyethylene technology in 2012, with a 660 million-pound-per-year facility. The low-molecular-weight polymer will have a variety of applications in food-contact areas, he said.

    South Korea is becoming an important source of innovation in plastics material technology, said Balaji Singh, president of Houston-based consulting firm Chemical Market Resources Inc. — an organizer of Flexpo.

    Singh said CMR moved Flexpo to Beijing this year, after being in South Korea last year and likely heading for Shanghai next year, in part because he sees innovation in the raw materials industry developing rapidly in Asia.

    In general, he predicted that developing Asian countries will have a stronger need to innovate because they need to achieve both rapid economic growth and more environmentally sustainable production.

    Copyright 2010 Crain Communications Inc. All Rights Reserved.

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