Korea Eximbank to Provide KRW 250 Billion for Korea’s First Dedicated Sustainable Aviation Fuel Facility by LG Chem

340,000-Ton Facility to Be Built in Daesan, South Chungcheong Province
Responding to Next Year's SAF Blending Mandate

The Export-Import Bank of Korea (Korea Eximbank) will provide approximately KRW 250 billion in support for LG Chem’s construction and operation of the nation’s first dedicated Sustainable Aviation Fuel (SAF) production facility. This measure aims to expand domestic production capacity in line with the government’s SAF blending mandate, which will come into effect next year.

On September 22, Korea Eximbank announced that it will provide about KRW 250 billion in loans to back LG Chem’s SAF-specific facility construction and operation project. Serving as the financial arranger, Korea Eximbank has led the financial structuring and successfully coordinated project financing (PF) with the participation of domestic commercial banks and the Seoul branches of foreign commercial banks.

This project involves constructing an environmentally friendly biofuel (HVO) production facility with a total capacity of 340,000 tons within LG Chem’s petrochemical complex in Daesan, South Chungcheong Province. The facility will use waste cooking oil, palm oil byproducts, and other materials with added hydrogen to produce sustainable aviation fuel, biodiesel, and bio-naphtha. It is estimated that this method can cut carbon emissions by 60–80% compared to conventional fossil fuels.

Recently, the European Union and major countries such as the United States have strengthened mandatory SAF blending regulations, highlighting the growing importance of securing a foundation for eco-friendly aviation fuel production. As the world’s top aviation fuel exporter, Korea also plans to implement the SAF blending mandate from next year.

In April, Korea Eximbank held a policy roundtable with related companies and government ministries, and in May, it revamped its green finance activation program, further strengthening financial support for the eco-friendly industry.

A spokesperson for Korea Eximbank stated, “Securing a foothold in the market for sustainable aviation fuel and other green biofuels is a key challenge that will determine the future competitiveness of the petrochemical and energy industries amid the global shift toward carbon neutrality and tighter regulations. We will expand policy finance support to enable Korean companies to lead in the global green markets.”

This content was produced with the assistance of AI translation services.