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

HD Hyundai Oilbank's efforts to diversify its portfolio are picking up momentum, as its biofuel business is achieving important milestones to meet increasingly complex market demands.

The refiner said it completed Korea's first biodiesel plant utilizing supercritical fluid technology in April, with commercial operations now underway. The facility aims to produce 130,000 tons of biodiesel annually, a fuel that significantly reduces greenhouse gas emissions compared to conventional diesel.

The company blends biodiesel into diesel fuel products for the domestic market to comply with Korea's renewable fuel blending obligations. This year's regulation obliges a 4 percent blend, up 0.5 percentage points from a year earlier, and similar regulations are set to expand in global markets, prompting the company to set up a dedicated plant for biodiesel.

In June, the company became the first Korean refinery to export sustainable aviation fuel (SAF) produced through co-processing by shipping to Japan. Co-processing is the simultaneous processing of biogenic feedstocks with petroleum intermediate products.

SAF is considered one of the most viable alternatives to conventional jet fuel, and refineries across the world are seeing the growth potential of its market. In August, Korea's industry ministry and transport ministry unveiled an SAF expansion strategy to bolster the domestic industry.

Building on the momentum, HD Hyundai Oilbank said it is also reviewing plans to build a dedicated SAF production facility using hydrogenated vegetable oil in 2027.

In July, HD Hyundai Oilbank also succeeded in exporting vessel biofuels processed in a bonded area in Pyeongtaek, Gyeonggi Province. Shippers can store their imported goods in bonded area without needing to immediately pay import taxes and duties.

HD Hyundai Oilbank said it is also making efforts in recycling, by reprocessing waste materials such as plastics, used lubricating oils and tires to produce naphtha, propylene and other products.

In March, HD Hyundai Chemical, a subsidiary of HD Hyundai Oilbank, became the first Korean firm to produce bio-naphtha certified by International Sustainability & Carbon Certification, by using used cooking oil and other bio-based raw materials sourced from CJ CheilJedang.