SK Ecoplant, the construction and energy arm of SK Group, signed a memorandum of understanding with Posco International on Wednesday with an aim to foray into the European market with recycled plastic technology.

On Tuesday, the companies secured their partnership at SK Ecoplant’s headquarters in central Seoul.

Under the agreement, the two companies will cooperate on providing raw materials for recycled plastic, including the Recycled Polyester chip (RPET), to the Europe market. Made from post-consumer bottles, the RPET chips are utilized for sustainable plastic packaging and fabric.

SK Ecoplant also promised an exclusive supply of RPET chips to Posco International for European customers. The RPET chips are currently produced and supplied to Europe by its subsidiary DY Polymer, boasting the only Korean PET recycling technology approved by the European Food Safety Authority.

Since 2021, the European Union has imposed a heavy plastic levy on non-recycled plastic waste, even planning to incorporate more recycled plastic in beverage bottles. Following the global wave toward zero emissions, the two companies seek to lead the industry as suppliers of recycled plastics.

“SK Ecoplant will further expand the recycled PET production and diversify the usage of recycled plastic, even looking forward to the East Asia market” said Kwon Ji-hoon, the senior executive vice president at SK Ecoplant. “This agreement with Posco International can strengthen our presence as the leader of the global recycled plastic market.”