South Korean chemical giant LG Chem said Thursday it is teaming up with Eni Sustainable Mobility, the Italian renewable fuel specialist, to build a hydro-treated vegetable oil (HVO) plant by 2026.

They plan to finalize the investment decision by 2024 following a thorough feasibility analysis covering technical and economic aspects.

The biorefinery is expected to have a production facility with an annual output of nearly 300,000 metric tons. This facility is slated to be located at LG Chem's Daesan chemical complex in South Chungcheong Province, leveraging LG Chem’s existing infrastructure and utilities.

This project represents Korea's introduction to an integrated biorefinery model, encompassing the entire production chain from feedstock to finished product.

HVO, a renewable biofuel, is obtained by hydrogenating materials such as used cooking oil. Unlike some biofuels that solidify in cold environments, HVO remains fluid, making it suitable for tangible applications such as transportation, aviation, and as a precursor for everyday products.

The planned biorefinery aims to address the growing demand for such sustainable fuels and low-carbon plastics, transforming raw materials of biological origin into biofuel. It is designed to process approximately 400,000 tons of biofeedstock annually, specifically using Eni SM's Ecofining process, co-developed with American petroleum company Honeywell UOP.

According to industry estimates, the demand for HVO is expected to quadruple by 2030 from 9.7 million tons in 2021. This venture aligns with LG Chem’s sustainable goals, as it intends to use HVO as a base material for producing eco-friendly versions of common materials, such as the polymers commonly found in everyday hygiene products, versatile plastics, and widely-used synthetic polymers, or PVC.

Eni SM's stake in the venture will facilitate its entry into the Asian market, leveraging its pre-existing HVO production foundation, supply chains, and vast sales network in Europe. Through this joint venture, the Italian renewable fuel firm is poised to broaden its HVO production capacity even further.