SK Group is poised to make a big bet on the rising hydrogen market, seeing the fuel as a next-generation eco-friendly energy source.

SK Holdings said Tuesday it established a hydrogen business promotion group, an organization dedicated to the hydrogen project, which consists of about 20 experts from related companies such as SK Innovation and SK E&S.

The holding firm said it has been reviewing the feasibility of the hydrogen project and establishing strategies since early this year. And, it plans to supply hydrogen to the market by actively utilizing the group’s infrastructure.

First of all, SK E&S, a subsidiary of SK Holdings, plans to build an annual 30,000-metric-ton liquefied hydrogen production facility from 2023 to supply liquefied hydrogen to the metropolitan area.

To that end, SK E&S will receive by-product hydrogen from SK Innovation. By-product hydrogen is hydrogen produced additionally during the production process in facilities such as petroleum and chemical factories.

SK Holdings also plans to operate an eco-friendly “blue hydrogen” mass production system through SK E&S. Blue hydrogen is hydrogen produced through liquefied natural gas conversion, often accompanied by carbon capture and storage.

SK E&S is the largest private LNG provider in Korea, directly importing over 3 million tons of LNG per year. SK Holdings plans to produce an additional 250,000 tons of blue hydrogen from 2025 by using natural gas secured by SK E&S.

The holding firm also plans to promote production of “green hydrogen” using renewable energy such as solar and wind power to complete an eco-friendly hydrogen supply system. Green hydrogen refers to hydrogen produced without carbon dioxide generation by means of water electrolysis using renewable energy generation.

Through all moves, SK Holdings aims to have a total hydrogen production capacity of 280,000 tons by 2025. It plans to use SK Energy’s gas stations and freight truck rest areas as green energy service hubs to supply the fuel for vehicles while actively developing demand for power generation such as fuel cell power plants.

An official said, “The decision to promote the hydrogen business at the group level is the starting point for SK Holdings to make a full-fledged transition to eco-friendly business.”

The nation’s largest steelmaker Posco is also preparing to enter the hydrogen business, according to industry sources.

Posco is expected to officially jump into the hydrogen business at its board meeting to be held on Dec. 11.

It reportedly plans to sell by-product hydrogen -- which is incidentally produced in the process of making steel -- to the market. It is also reported that the company plans to produce “green hydrogen.” 

By Shin Ji-hye (shinjh@heraldcorp.com)