South Korean energy and chemicals company SK Innovation plans to spin off its EV battery business, to boost change from carbon-intensive to green business.

The board of directors approved the decision to separate the group’s petrochemical and battery businesses to “enhance the competitiveness of each business and speed up growth”.

The separation of SK Battery is expected to take place in October 2021 if shareholders approve the move next month.

SK Innovation will then serve as a holding company in charge of the expansion of its eco-friendly business portfolio, including establishing new collaboration and making acquisitions.

Last month the company said it plans to increase the ratio of eco-friendly businesses from 30% now to 70% by 2025, to reduce its carbon footprint and create new business .

It also aims to expand its global battery production capacity from 40 to 200 gigawatt hours (GWh) annually by 2025 and to 500GWh by 2030 to meet growing demand.

SK Innovation is considering various equity financing options to fund expansion of its battery business with an initial public offering (IPO) to take place when “various conditions are met”.

Its battery sales surged by 86% year on year to KRW630.2bn (US$551m) in the April-June quarter after new plants opened in China in the first quarter. New EV battery factories are being built in Hungary and in the US.

SK IE Technology Company, which listed on the Seoul stock exchange in May, began production at its second battery separator factory in China in the second quarter with a facility in Poland set to begin output in the third quarter.