City Oil Field pioneers global market for naptha derived from recyled plastic

City Oil Field CEO Jung Young-hoon, left, and Van Vien Thong, the CEO of Nam An Joint Stock Company, pose after signing a contract on exporting oil derived from waste plastics, March 28. Courtesy of City Oil Field

City Oil Field finalized an export agreement with Nam An Joint Stock Company, headquartered in Ho Chi Minh, Vietnam centering on decomposed oil derived from waste plastic. This landmark agreement represents the first instance worldwide of exporting naphtha recycled from discarded plastic and plastic bags.

The export contract was signed in acknowledgment of the innovative non-incineration low-temperature decomposition technology, which effectively regenerated naphtha, showcasing its high quality.

Naphthais a flammable liquid hydrocarbon mixture and a byproduct of refining crude oil. Utilizing naphtha extracted from discarded plastic presents an environmentally friendly method of recycling plastic.

This agreement marks the first tangible achievement for City Oil Field since it announced its venture into Vietnam's waste plastic-related businesses last year.

Presently, the extraction of naphtha from heat-decomposed oil, produced through incineration, faces limitations due to its complex processes.

The company’s non-incineration approach allows the production of regenerated naphtha without undergoing complex procedures.

The contract price for export is $2 (2,700 won) per liter or about $2,000 per ton. The company’s plant in Jeongeup, North Jeolla Province, which is scheduled to commence operations at the end of August, can produce up to 4,900 tons of naphtha annually.

This contract is viewed as a practical solution to address challenges related to waste plastic utilization and environmental policies, including Environment, Social, and Governance (ESG) concerns, renewable energy usage, and carbon neutrality. These are challenges encountered by countries and global companies worldwide.

City Oil Field also expects the contract to serve as a model for securing carbon emission rights in local governments or voluntary carbon emission trading markets in Korea.

Recycling discarded plastic is becoming more important as legislation to address the issue of waste plastic recycling and mandatory recycling standards are being strengthened globally.

For example, the European Union mandates the use of 55 percent recycled materials in plastic packaging starting from 2025. Similarly, the United Kingdom has implemented fines for non-compliance with regulations on the use of recycled products in plastic packaging since 2022, as part of strengthened waste plastic usage policies.

City Oil Field has been actively engaged in efforts to recycle waste plastic, forging a business agreement with BIWASE, Vietnam's largest environmental specialist company, in August last year.

According to the company, promoting waste plastic recycling and resource circulation initiatives plays a significant role in this contract.