LG Chem, the leading South Korean petrochemical company, announced on Thursday that it entered into a strategic partnership with Neste, Finland’s bio-diesel enterprise, to produce eco-friendly resins. The company aims to expand its renewable and bio-based energy business through a Memorandum of Understanding (MOU) with the Finnish firm.
Neste, a leading biodiesel business company, yields 80 percent of its operating income from eco-friendly products and biofuels.
LG Chem stated that the partnership focuses more on bio-based eco-friendly businesses after its battery spinoff scheme approval. Neste would serve as a suitable associate known for its successful shift from oil refining to the largest renewable diesel producer.
The two companies would explore new opportunities to sell several bio-material products and boost their market viability. Both companies would also share market leads on European, Asian, and other international markets and cooperate in product developments.
A Win-Win Strategy
According to LG, the partnership qualifies as a win-win strategy since Neste also spreads its business into the petrochemical industry.
Noh Kug-lae, LG Chem head, stated that Neste’s sustainability and LG Chem’s technology would increase global competitiveness for both companies.
The company also expects to obtain a steady supply of bio-materials for producing eco-friendly synthetic resins from Neste. LG Chem intends to create bio-material-based PC (polycarbonate), PO (polyolefin), ABS (acrylonitrile butadiene styrene copolymer), PVC (polyvinyl chloride), and SAP (high absorbent resin) next year. It plans to begin production by the second half of 2021.
Neste’s bio-materials come from vegetable oils such as leftover cooking and palm oil, which decrease greenhouse emissions compared to fossil fuels.
LG Chem set a carbon-neutral goal concerning its carbon emissions, cutting 40 million tons by 2050. The company vowed to maintain and reduce its emissions at a level of 10 million tons. Additionally, the collaboration between the two companies would help reduce carbon and greenhouse gas emissions.
LG aims to secure a certification from the International Sustainability and Carbon Certification (ISCC) in June 2021.
