Korea's petrochemical and refining industries are accelerating investments in advanced waste plastic recycling technologies to counter raw material supply instability caused by geopolitical risks in the Middle East. Beyond merely responding to environmental regulations, the companies are pursuing a structural shift through a "resource security" strategy aimed at replacing basic raw materials that have been heavily dependent on imports.
According to the industry on Monday, major Korean companies including LG Chem (051910.KS), SK Chemicals (285130.KS) and GS Caltex have been ramping up investments in plastic recycling technology since the Middle East crisis. As disruptions in Middle Eastern crude oil supply triggered a chain reaction affecting the supply chain of key raw materials for plastics and vinyl products, companies have moved to develop self-reliant solutions. In particular, they are staking their future on securing capabilities to directly convert waste plastics into pyrolysis oil or petroleum products, moving away from the conventional approach of simply diversifying supply sources.
LG Chem is focusing on "supercritical pyrolysis," a technology for producing pyrolysis oil that can replace crude oil. Supercritical pyrolysis uses steam generated at temperatures and pressures exceeding the critical point of water to decompose mixed waste plastics. The technology is highly efficient, extracting more than 8 tons of pyrolysis oil from every 10 tons of waste plastic input. In 2024, LG Chem invested 310 billion won ($230 million) to complete Korea's first pyrolysis oil plant at the Seokmun National Industrial Complex in Dangjin, South Chungcheong Province, and the facility is currently in trial operation. The company plans to further expand related investments in line with supply chain stabilization trends while maximizing the share of recycled raw materials by jointly using pyrolysis oil and hydrotreated vegetable oil (HVO).
SK Chemicals is concentrating on "depolymerization" technology, which breaks down waste plastics at the molecular level and returns them to their original raw material state. Conventional physical recycling methods, which involve crushing, washing and remelting, have limitations in that quality is easily affected by usage history or impurities. In contrast, depolymerization technology can achieve physical properties and quality comparable to new plastics regardless of the condition of the waste. To this end, SK Chemicals is establishing a "Recycle Feedstock Innovation Center (FIC)" through a joint venture with Kelinle, a Chinese recycling specialist based in Shaanxi Province. Starting with pilot production of 16,000 tons in the second half of this year, the facility will scale up to 32,000 tons annually and supply raw materials to SK Chemicals' Shantou plant, which produces chemically recycled plastics. The Shantou plant produces a combined 100,000 tons of recycled raw materials (r-BHET) and recycled PET (r-PET).
GS Caltex is concentrating on a process that creates "circular petroleum products" by directly feeding recycled oil from waste plastics into its actual refining operations. The company believes that linking recycled oil with existing facilities can reduce dependence on crude oil while enabling broader diversification of the raw material structure across the refining and chemical industries.
The global plastic recycling market is also growing rapidly in line with environmental concerns and the trend toward strengthening resource security. According to market research firm MarketsandMarkets, the global plastic recycling market grew at an annual average of 8.1 percent from $58 billion in 2019 to $69.4 billion in 2023 and is projected to reach $120 billion by 2030. The Korea Institute of Science and Technology Information (KISTI) forecasts that the domestic market will also expand from 1.67 trillion won in 2019 to 2.85 trillion won by 2027.
"Recycling is not a matter to be judged solely by immediate economic viability but is an option from the perspective of resource security that can ease the recurring raw material supply instability in a country with no natural resources," an industry official said. "There is a need to redesign Korea's recycling system, which has been built around physical recycling, to broaden the range of recyclable raw materials and their applications."
