GS Caltex to invest $29 mn to expand biodiesel plant

South Korea’s oil refining giant GS Caltex Corp. is set to strengthen its biodiesel business in line with the expansion of the global biofuel market.

GS Bio Co., a subsidiary of GS Caltex, plans to invest 39 billion won ($29.3 million) to expand the production capacity of its biodiesel plant in Yeosu, South Jeolla Province. The company plans to expand the facility by the end of 2024 as approved by its board last week.

Biodiesel is an eco-friendly form of diesel fuel that comes from plants or animals. It is known to contribute less to climate change, unlike fossil fuels that emit large amounts of greenhouse gases in the stage of production and consumption.

In 2011, GS Bio invested 40 billion won to build a biodiesel production plant with an annual production capacity of 100,000 tons at the Yeosu National Industrial Complex. The investment this time is aimed at expanding the facility.

The Ministry of Trade, Industry and Energy, in the meantime, requires generic diesel to be mixed with biodiesel before being sold to promote eco-friendly biofuels. The ministry plans to raise the mandatory blending ratio to 8 percent from the current 3.5 percent by 2030.

The European Union also plans to increase the share of biofuel in transport fuel to 14 percent by 2030. Global demand for biodiesel is expected to increase sharply with EU plans to strengthen the mandatory use of bio-aviation fuel to 63 percent in 2050 from 2 percent in 2025.

The International Energy Agency expected similar environmental regulations to be tightened worldwide and predicted that the global biofuel demand would increase to 9.2 million barrels per day in 2050 and 8.7 million in 2040 from 2.2 million in 2021.