South Korea
Green Hydrogen Vision
South Korea’s green hydrogen vision is a pivotal part of its strategy to transition to a carbon-neutral economy by 2050. With a focus on reducing greenhouse gas emissions and decreasing reliance on imported fossil fuels, South Korea aims to lead in hydrogen innovation by developing a comprehensive hydrogen ecosystem. This includes large-scale green hydrogen production using renewable sources like wind and solar, along with advancements in hydrogen storage, fuel cell technology, and hydrogen-powered transportation. South Korea has set ambitious targets, including a significant increase in hydrogen-powered vehicles and the expansion of hydrogen refuelling stations nationwide. The government is also investing in partnerships with energy-rich countries to secure a stable supply of green hydrogen and promote research and development. South Korea is pursuing a hydrogen economy for economic growth and industrial competitiveness more than for climate change objectives. South Korea sees hydrogen as a potential driver of economic growth worth 43 trillion won ($43 billion) and 420,000 new jobs.
National Strategy
In 2019, South Korea launched the Hydrogen Economy Roadmap. To establish legal support for the government’s hydrogen initiatives and set safety standards for related facilities, the Korean National Assembly enacted the Hydrogen Economy Promotion and Hydrogen Safety Management Law (known as the “Hydrogen Law”) in January 2020. This law, which became effective in 2021, outlines key elements of the industrial strategy, including R&D subsidies, loans, and tax breaks to assist hydrogen-focused companies.
The country's endeavours also encompass research on liquefied hydrogen storage technology and minimizing transportation costs. Furthermore, the roadmap emphasizes the government’s objective to develop a specialized hydrogen pipeline network nationwide, with the construction of hydrogen-receiving infrastructure slated to commence in 2022. While approximately one-third of South Korea's hydrogen consumption by 2040 is projected to derive from imported liquefied natural gas (LNG), KOGAS, the state-run utility, intends to invest $37 billion abroad by 2040 to build renewable power generation facilities that produce hydrogen.
Since 2012, South Korea’s renewable portfolio standard (RPS) has facilitated the deployment of large-scale stationary fuel cell power generation. Under this standard, large power producers are required to generate a minimum share of their energy from new and renewable technologies, which includes fuel cell power generation. Additionally, the government has lowered the price of grid-sourced natural gas when utilized for fueling cells.
Capacity and Capacity targets
South Korea has robust targets for hydrogen usage that it seeks to achieve by 2040. For consumption, South Korea aims to expand its annual market from 130,000 tons at present to 5.26 million tons per year.
For the transportation sector, South Korea’s New Deal (announced in 2020) sets the 2040 FCEV target to nearly 3 million, including 2.9 million domestically manufactured FCEVs, 30,000 fuel cell trucks, and 40,000 fuel cell buses.
In 2020, South Korea led the world in FCEV installation, with over 10,000 FCEVs on the road, thereby doubling the national stock from 2019.
Impact Targets
South Korea’s vision for 2040 includes increasing the number of hydrogen refuelling stations (HRSs). In 2019, the Hydrogen Energy Network (HyNet) was launched with an initial investment of $119 million, aiming to grow the number of HRSs from around 24 in 2019 to 310 by 2022 and 1,200 by 2040. Additionally, by 2040, South Korea plans to install 15 gigawatts of utility-scale fuel cells.
According to the Ministry of Trade, Industry and Energy, the plans entail that by 2030, the country will produce 3.9 million metric tons (mt) of hydrogen annually. This includes 940,000 mt of grey hydrogen, 750,000 mt of blue hydrogen, and 250,000 mt of locally sourced green hydrogen, while also importing 1.96 million mt of green hydrogen from abroad.
Currently, South Korea does not generate any clean hydrogen; all 220,000 mt produced in 2020 was grey hydrogen derived from fossil fuels.
By 2050, South Korea aims to produce 27.9 million mt of hydrogen each year, comprising 3 million mt of green hydrogen and 2 million mt of blue hydrogen, while importing 22.9 million mt of green hydrogen from overseas, eliminating grey hydrogen from its production mix.
Policy Spotlight
On May 24, 2024, the Korean Ministry of Trade, Industry and Energy announced the launch of the world's first clean hydrogen power bidding market. This market facilitates the sale and purchase of electricity generated from clean hydrogen. Only power generators that meet Korea’s domestic clean hydrogen certification standards can participate. The total bidding volume for this year is set at 6,500 GWh, with contracts lasting for 15 years. Commercial operations must commence by 2028, following a three-year preparation phase and an additional year for grace. The bid notification period will last 24 weeks, and the winning bidder will be announced in December 2024.
Financing
A sizeable portion of South Korea’s initiative to cultivate a hydrogen economy is backed by government funding. The budget for FY2021 stands at $701.9 million, reflecting a 40 percent increase from 2020. Moreover, the government has earmarked $2.34 billion to create a public-private hydrogen vehicle industry by 2022. Currently, the government subsidizes about half of the expenses for installing hydrogen refuelling stations (HRSs). In 2019, subsidies for fuel cell electric vehicles (FCEVs) from national and local governments ranged from $27,300 to $30,300.
As reported by South Korea’s economic ministry, five major conglomerates in South Korea plan to invest $38 billion in hydrogen technology by 2030.
Government green hydrogen lead
Ministry of Trade, Industry and Energy
Korea Gas Corporation (KOGAS)