▲ Head of SK Innovation Ulsan Complex, Jaeyoung Yoo

Q1. SK Innovation Ulsan Complex(hereinafter, Ulsan CLX) is referred to as the heart of SK Innovation. As the head of Ulsan CLX, what is your specific vision for 2022, the first year of implementing the Financial Story?

Despite the fact that COVID 19 discouraged and disturbed us, we were able to achieve significant achievements since each member completed their respective task tenaciously and perfectly. I would want to thank every member of Ulsan CLX who gave their all despite the overwhelming hurdles, as well as the partner companies that were equally dedicated to the work as we were.

This year marks SK Innovation and its affiliates’ full-fledged execution of their Financial Stories, formulated last year. I hope Ulsan CLX will set the trend for others by meticulously exercising the tasks assigned to it.

As the Head of Ulsan CLX, the beating heart of SK Innovation, I have a huge responsibility to ensure that all Financial Stories of SK Innovation affiliates are successfully realized. I will create a magnificent harmony among all of Ulsan CLX’s members, partner companies, and stakeholders in order to make this year the finest yet.

▲ (Right) Jaeyoung Yoo, Head of SK Innovation Ulsan Complex, visited the site in January 2022 to appreciate members’ hard work.

Q2. As you indicated, this is the first year of SK Innovation affiliates implementing Financial Stories; what actions does Ulsan CLX want to take?

In a prior interview, SK Energy CEO Kyungmok Cho outlined the company’s financial strategy to become “the most earth-friendly energy enterprise in the world.” If I had to rephrase the remark in the context of Ulsan CLX, it would be to build the most earth-friendly “Green Plant” that can serve as a model for energy firms around the world.

Some may claim that converting Ulsan CLX, the carbon-based production complex, which refines petroleum as well as manufactures a range of oil and chemical products, into the Green Plant is impossible. However, I am convinced that with approximately 4,000 experts, who know carbon better than anyone else, Ulsan CLX will successfully complete the task. That daring approach has been in place for a long time, and the majority of them are yielding concrete results.

While we face daunting issues such as the climate change crisis and environmental pollution, as well as the ensuing massive shift to environmentally friendly energy, I believe it is unavoidable that we will continue to rely on petroleum as an effective energy source as well as raw chemical materials for a certain period of time. In the event that we continue to allow the production of petroleum, our 4,000 members and I have a tremendous sense of duty to ensure that no environmental issues occur as a result of oil production and consumption.

In this regard, the main direction for us to follow is the “Green Plant,” and I feel that it is the crux of the Financial Story described through the lens of Ulsan CLX, and ESG management.

▲ Jaeyoung Yoo, Head of SK Innovation Ulsan CLX (Right), visited the regular maintenance site in June 2021 to encourage members.

Q3. It is well known that Ulsan CLX has a very broad spectrum, encompassing everything from petroleum refinement to the production of petroleum products and raw chemical materials. Please elaborate on “Green Plant” in this regard.

Despite the fact that Ulsan CLX manufactures petrochemicals, it is largely regarded as the most environmentally friendly complex. In addition to eco-friendliness, the “Green Plant” that I envision will have two further concepts: ▲green product manufacture and ▲green production process, and I will steer Ulsan CLX in that direction. I thought Ulsan CLX may reach the two goals by “shifting a paradigm beyond just making incremental improvements.”

First and foremost, let me speak to you about petroleum refining and green product manufacturing, or, in other words, the low-carbon strategy of petroleum itself. In a nutshell, it is intrinsically impossible as petroleum and petrochemicals are composed of carbon, basically. We, however, may cut carbon by our efforts.

As an example, warm mix asphalt (WMA) was recently accepted as a methodology for an external greenhouse gas reduction project by the Ministry of Environment. The invention enables the asphalt concrete production and pavement at temperatures roughly 30 degrees Celsius lower than ordinary ones, resulting in the maximum 70 percent reduction in fuel input and power consumption. Therefore, it allows 6 to 7 kg of carbon dioxide per ton in the manufacturing process. If we consider the effect of the production process, it can be said that it has a significant meaning.

The research institution at Ulsan CLX is the company’s most significant competitive advantage in pursuing a low-carbon strategy. We are almost the only petrochemical company operating our own research institute (Institute of Environmental Science & Technology). We conduct a variety of low-carbon petrochemical research initiatives in collaboration with the Institute of Environmental Science & Technology.

Second, I will tell you about the green production process. The refining of crude oil and the production of petrochemical products use a tremendous amount of energy and water. As you are aware, it is so massive that even managing the use “a little bit” can result in a significant contribution to the completion of the Green Plant. We’re developing a strategy predicated on incorporating that ‘little bit’ into the larger picture.

▲ (Left) the previous Bunker C boiler that Ulsan CLX has used for decades / (Right) Ulsan CLX power boiler that uses environmentally friendly LNG fuel.

For instance, to refine crude oil, we require eight power boilers, all of which run on bunker C oil (0.3 percent B-C). However, in the first half of last year, we replaced them with those that use LNG, an environmentally friendly fuel. Thanks to that initiative, we were able to save 160,000 tons of carbon and 858 tons of NOx as a result of that program, which is equivalent to planting 600,000 trees.

Allow me to provide another example of what we have been doing with water. Though we do not directly save water, we are using AI to improve the efficiency and safety of the total wastewater treatment facility. So far, wastewater treatment has been done manually through monitoring the system installed in the effluent outlets, sample analysis, and bio-reactors, among other things, which obviously limits preemptive action. To address the limitation, we used an AI system to perform real-time analysis and prediction based on the results of the analysis. As far as I am aware, it is the first attempt in petroleum plants both inside and outside of Korea. In this way, I believe it will make a major contribution to greenhouse gas reduction.

Q4. Because of the qualities of the Green Plant, it appears that bottom-up, or field members’ ideas, really count, as you have shown with the examples.

You have hit the nail on the head. As previously stated, Ulsan CLX has around 4,000 experts on-site at all times who know everything there is to know about petrochemicals. I can confidently declare that every one of them has world-class competitiveness.

The Green Plant, like Rome, is not built in just a day. Ulsan CLX’s masterpiece, the green plant, is being built by all 4,000 members who are endowed with craftsmanship and steadfast determination in the field, just as craftsmen produce luxury items with their intricate needlework.

And the key is to shift a paradigm rather than settling for incremental improvements. While operation efficiency and improvement for SHE(Safety, Health, and Environment) are important, now that we have the overarching cause of the establishment of the Green Plant, which constitutes a critical piece of the mosaic of our Financial Story, all 4000 members unified under craftsmanship and I are acutely aware of the urgent need for a paradigm shift.

As the leader of Ulsan CLX, I believe my most important responsibility is to create a system for all of our members to achieve the SUPEX(Super Excellent Level) for building the Green Plant on-site and promoting it as a well-established corporate culture.

▲ (Right) Jaeyoung Yoo, Head of SK Innovation Ulsan Complex, visited the site under regular maintenance and repair in June 2021 and walked around the complex with members.

Q5. In my perspective, the field members of Ulsan CLX are exceptional. It appears to me that their pride in providing energy infrastructure to Korea’s economic development as the first petrochemical firm in Korea with a 60-year history has evolved in this way.

Yes. The pride and dignity of our Ulsan CLX members are outstanding. Of course, there have been changes of generations. But, such pride and dignity run deep in our members as tradition and culture like our unique DNA. In that regard, I am quite grateful.

They are most conspicuous in the activities carried out by departments to establish an environment conducive to SUPEX. The activities, which include a variety of projects such as minor and major changes, as well as a paradigm shift, are avidly participated in by everyone from new employees to seniors who are about to retire.

Ulsan CLX is currently expediting its establishment of the Green Plant. If I name a few examples of our representative SUPEX initiatives undertaken by Ulsan CLX in 2021, there are cases such as heat exchange network improvement work for the NAC cooling system in our aromatic plant to improve process efficiency and ensure economic feasibility, and Petroleum Plant no.3’s preemptive response to phenol-related laws by independently identifying microorganisms that survive high acid/phenol wastewater. In addition, there is also a case that the facility head office decreased waste by performing a regular shutdown inspection of crude oil storage tanks. Previously, waste was handled by outside providers; however, as waste generated up to 556 tons has been greatly decreased, the company’s transition to the Green Plant has been accelerated.

▲ Ulsan CLX crude oil storage tanks that completed a regular shutdown inspection in the first half of 2021.

Q6. Finally, do you have any requests for members and stakeholders in order for the Financial Story and Green Plant to be implemented successfully?

As I previously stated in response to the first question, I have many thoughts and worries about how Ulsan CLX should take the initiative of executing the Financial Story for the first year, how to create the safest business site, and how to increase the happiness of our members, partner companies, and stakeholders.

To put them the other way round, I am quite happy because I have our 4,000 top experts’ pursuit of SUPEX, the passion of our partner companies, and support from many stakeholders on my side. I would like to express my sincere gratitude to everyone.

Ulsan CLX and I will focus on creating “the most earth-friendly green plants,” which will be given to the globe as a role model this year. Depending on who you ask, it may appear to be an impossible job, and it will not be easy to complete because it takes a long-term effort. However, we have already mounted onto the back of a tiger called carbon reduction and net-zero and begun our courageous adventure, and we will not be able to take off until we reach our destination.

I am sure that we have so far overcome a challenging management environment, thanks to our members’ concerted pursuit of SUPEX and the passion of our partner companies, and we will continue to go forward in the face of an uncertain future. Every effort will finally culminate in the completion of the Green Plant. I would like to draw a lesson from the old story, “The Foolish Old Man Moves the Mountains.”

The Green Plant will serve as a platform for SK Innovation Ulsan CLX to communicate with the Earth and increase all of our happiness.