The carbon capture, utilization and storage (CCUS) business that DL E&C picked as a new venture is running into trouble. All related business subsidiaries posted losses last year, and with impairment losses recognized, the book value fell to 0 won. As the opening of the CCUS market—once viewed as highly promising for growth—has proceeded slowly, DL E&C's CCUS business has also stalled.
CCUS is a technology for capturing, utilizing and storing carbon to achieve carbon neutrality. It is an umbrella term for technologies that prevent carbon dioxide produced in large quantities at sources such as the use of fossil fuels from being released into the air.
According to the electronic disclosure system on the 30th, Carbonco (CARBONCO), a DL E&C subsidiary running the CCUS business, recorded a net loss of 7.9 billion won last year. Carbonco's book value reached 45.3 billion won in 2024, but after reflecting impairment losses at the end of last year, its book value dropped to 0 won. An impairment loss is recognized in accounting when the recoverable amount of an asset held by corporations falls short of its carrying amount; it equals the carrying amount minus the recoverable amount.
DL E&C adopted the CCUS business as a new growth engine in 2022 and established Carbonco, a CCUS technology subsidiary. The plan was to develop it into a global CCUS top tier based on DL E&C's accumulated expertise and experience in CCUS-related businesses and carbon-neutral technologies. At the time, according to global market research firm Industriaarc, the CCUS market was forecast to grow an average of 29% per year to reach a total of $25.3 billion (about 3.7 trillion won) this year.
Chief Executive Park Sang-shin of DL E&C also said at the regular shareholders meeting on Mar. 2025, "We will focus on the energy and environment sectors, where stable growth is expected thanks to the acceleration of decarbonization, and will nurture strategic products such as Small Modular Reactor (SMR), CCUS, sustainable aviation fuel (SAF), and clean hydrogen and ammonia," expressing an intention to expand the CCUS business.
However, contrary to the company's expectations, as the CCUS market has been slow to open, Carbonco is struggling to expand its business. Because the CCUS business itself is highly dependent on government support, it is difficult to activate the market without policy backing. While there is demand in industries such as steel and cement to use CCUS technology to achieve carbon neutrality, the current expense of carbon capture is relatively high, making it difficult for individual corporations to adopt the technology without policy subsidies. The CCUS industry argues that comprehensive policy support is needed to stimulate the sector, including building a cluster-centered shared capture, transport and storage system in industrial complexes and providing tax and fiscal support to ease the burden of initial investment.
A DL E&C official said, "We reflected impairment losses on some investment assets in line with conservative accounting standards," adding, "Given the nature of eco-friendly businesses, Carbonco is in a field where policy support is important, and we reflected the delay in market opening due to the recent global economic slowdown."
NeuRizer, an Australian eco-friendly fertilizer manufacturing corporations in which DL E&C made an equity investment of about 13 billion won in 2022 to expand its CCUS business, also saw its book value fall from 177 million won to 90 million won last year. NeuRizer's net loss last year was 5.621 billion won. In particular, since NeuRizer's listing on the Australian Securities Exchange (ASX) has been suspended for violating listing rules as of Mar. 17 last year, the recovery of DL E&C's investment is uncertain.
DL E&C said, "For NeuRizer, we preliminarily reflected impairment losses on related assets in 2024 due to reasons attributable to the project owner, and there is no additional financial impact from this," adding, "The impairment loss is a one-time accounting recognition and does not affect our financial soundness or core businesses."