GS Caltex CEO Hur Sae-hong, left, poses with POSCO International CEO Joo Si-bo after signing a MOU to promote eco-friendly bio business based on palm oil at GS Tower in Seoul, Friday. Courtesy of POSCO International

By Kim Hyun-bin

POSCO International and GS Caltex have joined hands to promote an eco-friendly bio business based on palm oil.

POSCO International signed a memorandum of understanding (MOU) for the joint development of the eco-friendly bio business at GS Tower, Friday, in the presence of POSCO International CEO Joo Si-bo and GS Caltex CEO Hur Sae-hong.

The two companies plan to expand the value chain gradually from raw material refining to bioproduct production and the next-generation biofuel business through waste oil recovery.

POSCO International, which possesses palm oil procurement capabilities, and GS Caltex, which has expertise in the biofuel field, will be able to utilize each other's strengths to increase the added value of palm oil and contribute to greenhouse gas reductions by advancing into the eco-friendly bioindustry. It is significant that the two companies will be able to respond jointly to food security and climate change risks through the convergence of the food and energy industries.

The two companies plan to establish a raw material refining facility and a biofuel plant in Indonesia as their first joint project. In addition, as part of the Clean Development Mechanism (CDM), they plan to reduce greenhouse gases by simultaneously producing biofuels and collecting waste oil. Under the CDM, developed countries earn credit for the greenhouse gas reduction they achieved in developing countries by investing technology and capital there.

Currently, about 65 countries are introducing or reviewing the mandatory biofuel mixture system to reduce greenhouse gas emissions, and palm is evaluated as an eco-friendly crop compared to soybean, sunflower and rapeseed.

The palm cultivation area accounts for only 10 percent of the world's plant crops, yet it accounts for one-third of the production.

"This MOU is meaningful in that it can contribute to global greenhouse gas reductions by entering the eco-friendly bio business in an era when the importance of realizing carbon neutrality is on the rise," an official from POSCO International said.