A large-scale demonstration project to convert carbon dioxide (CO₂) into industrial feedstock such as jet fuel and marine fuel will begin this year. The government plans to complete the technology demonstration within five years through cooperation with private companies including LG Chem and POSCO Holdings (005490.KS), aiming to secure both carbon reduction and energy security.
The Ministry of Science and ICT (MSIT) held a launch briefing for the "Carbon Capture and Utilization (CCU) Mega Project" at the Korea Institute of Energy Research in Daejeon on Tuesday, announcing the technology demonstration plan. The core of the project is to capture CO₂ emitted from industrial sites with high greenhouse gas emissions and convert it into high-value-added products such as jet fuel and methanol. The project runs from this year through 2030, with a total of 238 billion won in state funding.
CCU is a technology that recycles CO₂ emitted at industrial sites into chemical products or fuels. It is drawing attention as a next-generation carbon neutrality technology in that it goes beyond simply reducing carbon emissions to recreating CO₂ as a useful resource.
In particular, the government plans to spread CCU technology centered on the power generation and steel industries. LG Chem will serve as the lead institution in the power generation sector, while POSCO Holdings will lead in the steel sector. The two companies will respectively use CO₂ generated from thermal power plants and steelmaking processes to demonstrate technologies for producing sustainable aviation fuel (e-SAF), synthetic gas, and eco-friendly marine fuel by 2030.
In particular, MSIT demonstrated direct air capture (DAC), a next-generation carbon capture technology, and technology to convert captured CO₂ into synthetic crude, reviewing its research and development achievements to date.
DAC is a technology that directly captures CO₂, which exists thinly in the air at about 0.04% (400 ppm). It is a highly difficult technology in that it recovers a very small amount of CO₂ molecules, only 400 out of every 1 million air molecules. The government views next-generation CCU technologies such as DAC as essential to achieving the 2035 Nationally Determined Contribution (NDC), which calls for reducing greenhouse gases by about 400 million to 450 million tons.
MSIT also demonstrated synthetic crude technology that combines captured CO₂ with hydrogen to produce crude oil. If the technology succeeds in scaling up, annual crude oil production of 900,000 tons is expected to be possible by 2040. The government envisions that commercializing such technology to convert CO₂ into high-value-added fuel and feedstock domestically could reduce dependence on crude oil imports. According to the technology diffusion scenario, the expected fuel and feedstock substitution rates by 2050 are 10% for jet fuel and 48% for synthetic gas.
To this end, MSIT has operated the "CCU Initiative," an industry-academia-research consortium centered on companies, gathering field opinions and building a foundation for fostering the industry, including establishing a CCU technology and product certification system and a system to verify specialized companies.
Recently, as the need for energy security has been emphasized following the conflict in the Middle East, a supplementary budget was allocated to the CCU Mega Project. As a result, the related budget was increased by 22.4 billion won, from 20 billion won in the main budget to 42.4 billion won. "To revitalize the CCU industry, we will expand investment in technology development and demonstration based on public-private cooperation, listen to the opinions of the industry, and actively support related technologies in taking root," MSIT said.
