HD Hyundai Oilbank's biodiesel plant in Daesan, South Chungcheong Province / Courtesy of HD Hyundai Oilbank

HD Hyundai Oilbank has started production at its biodiesel plant with an annual capacity of 130,000 tons, as part of the oil refiner's efforts to expand into the eco-friendly energy business, HD Hyundai Group affiliate said Thursday.

Biodiesel is a fuel produced from animal and vegetable oils, and its properties are similar to those of petroleum-based fuels. This fuel source has been increasingly recognized for its effectiveness to significantly reduce greenhouse gases.

Biodiesel is one of the first to be commercialized worldwide among bio-based fuels such as aviation biofuel and marine biofuel. The advantage of biodiesel is that it can be blended with diesel fuel without requiring changes to the structure of internal combustion engines.

To expand the use of biodiesel, the government decided to increase the current mandatory blending ratio of 4 percent to 8 percent by 2030 under its renewable fuel standard policy.

HD Hyundai Oilbank said the newly built biodiesel plant in Daesan, South Chungcheong Province, is the first in the country to introduce a supercritical process. The supercritical process differs from traditional biodiesel plants as it allows for the production of products under high temperature and pressure conditions without a catalyst.

This enables the use of not only edible raw materials, such as soybean oil and palm oil, but also non-edible raw materials that are difficult to process due to high acidity, such as palm residue oil, thereby reducing dependence on food resources compared to existing methods.

To secure a stable supply chain, the company added that it is cooperating with Lotte Wellfood. It plans to receive biodiesel raw materials, including waste cooking oil, from Lotte Wellfood. In turn, HD Hyundai Oilbank will supply its biodiesel products to transportation trucks of Lotte Group affiliates.

"With the completion of the biodiesel plant, we have laid the foundation for the production of bio aviation fuel and marine fuel," Chu Young-min, CEO of HD Hyundai Oilbank, said. "We will accelerate our transition to a comprehensive eco-friendly energy company, including our overseas biodiesel export business."