The MOU was signed at the ‘2024 Latvia-Korea Business Forum’ hosted by the President of Latvia on November 29, 2024. It will see the construction of Latvia’s first commercial-scale green methanol production plant, which will supply green methanol for the reduction of GHG emissions from maritime transportation, which has already been regulated by the European Union.
Plagen's MoU aims to produce 20,000 metric tons of green methanol per year. Feasibility studies will begin in the first half of 2025, and full-scale production will begin in 2028.
With 53 percent of Latvia's land area covered by forests, timber production and wood processing make a significant contribution to Latvia’s economic production, which generates a large amount of forest residues and wood wastes. In addition, Latvia also has an abundance and low price of renewable electricity from wind power.
Latvia is one of the most competitive countries in the European Union, as it can produce clean methanol at a competitive price by using abundant wood waste as a raw material and renewable electricity from cheap wind power.
The use of abundant forest residues and wood wastes as a feedstock and cheap renewable electricity from wind power makes it possible to produce green methanol with a competitive price, making Latvia is one of the most competitive countries in the EU.
The agreement will result in the construction of Latvia's first commercial-scale green methanol production plant, which will supply green methanol to ships in the EU's maritime fleet, contributing to the reduction of greenhouse gas emissions from maritime transportation.
In the European Union, the European Emissions Trading Scheme (EU-ETS) will come into effect in 2025, requiring shipping companies to purchase carbon credits for their greenhouse gas emissions.
In addition, the EU is implementing FuelEU Maritime, which aims to reduce greenhouse gas emissions by 2 percent below the 2020 average by 2025 and 80 percent by 2050. This is expected to result in an energy transition to green methanol.
In July 2023, the International Maritime Organisation (IMO) adopted a revised strategy that calls for reducing greenhouse gas (GHG) emissions from ships to net-zero by or around 2050, and plans to introduce full-scale regulations from 2027, and shipping companies have begun ordering methanol-powered ships fueled by green methanol, a carbon-neutral fuel.
“We expect to start producing green methanol in Latvia in 2028, which will reduce greenhouse gas emissions from EU maritime transport vessels and contribute significantly to the revitalisation of the Latvian economy and national energy security” said John Kyung, CEO of Plagen.
In November 2024, Plagen completed the purchase of an industrial complex and received a government permit for the construction of the country's first green methanol plant in Dongjeom Industrial Complex in Taebaek City, Gangwon-do. The project, which will produce 10,000 tons per year using the Regional Revitalization Investment Fund, is scheduled to begin construction in the first half of 2025 and begin production in the second half of 2027.
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