• South Korea first launched its Hydrogen Economy Roadmap in 2019 and has since introduced several follow-up policies
• The hydrogen industry is expected to grow to KRW 26.8 trillion (USD 20.2 billion) by 2030
• Insufficient infrastructure across several key areas must be addressed for successful implementation

Hydrogen may be underutilised in the race to reduce carbon emissions, given its potential usage in mobility, power generation, and, eventually, heavy industry. This is evident in South Korea, where the government has identified it as a way to meet 2050 climate targets. Asian Insiders’ partners in Korea, Hannes Humala and Sean Han, discuss the current situation along with what the country needs to fully achieve its hydrogen economy goals.

When South Korea unveiled its Hydrogen Economy Roadmap in 2019, the plan was seen as a unique way to support climate goals. Many countries have explored ways to leverage hydrogen, but nothing matches the size or scope of what the government in Seoul has envisioned.

Significant strides have been made in building the hydrogen economy in the five years that have followed. Some of these efforts are visible. For example, hydrogen-powered passenger vehicles and fuel cell electric vehicles (FCEVs), such as buses, can now be found on roads in the country.

Behind-the-scenes work is being carried out to launch growth strategies, increase supply and demand, and transition to green hydrogen. This is why the industry is forecast to grow from KRW 11 trillion (USD 8.2 billion) in 2021 to KRW 26.8 trillion (USD 20.2 billion) by 2030. By 2040, hydrogen energy investment is expected to contribute USD 43 billion to the country’s economy.

In order to succeed, South Korea will need to continue its work in regard to mobility, develop the hydrogen power sector, and find a way to overcome existing issues. Interestingly, many other countries in Asia will be monitoring the situation as they look build up their own capabilities. For example, Japan is exploring how hydrogen fits into its clean energy plans.

Hydrogen mobility taking shape

Mobility has been the first area of focus for the Korean hydrogen economy. The county’s Hydrogen Economy Revitalization Roadmap called for the country to have the largest market share of FCEVs and fuel cells in the world.

South Korea aims to produce 300,000 FCEVs and 21,200 buses by 2030. It also set a long-term goal of increasing commercial production capacity to 100,000 FCEVs annually. In terms of infrastructure, 70 liquid hydrogen-refuelling stations are planned by 2030. The country has also added 150,000+ BEVs annually over the past few years, and this number is likely to increase in the future.

Progress is being seen across all fronts, albeit slightly slower than initially expected. Sales of hydrogen passenger vehicles have ebbed and flowed since first being introduced. However, a few significant achievements have been recorded. For example, South Korea’s Ministry of Environment announced in July that 1,000 hydrogen public buses are now on the road.

Elsewhere, the city of Ulsan is currently developing hydrogen trams. Two lines are planned with operations on the first to start in 2028 and the second line to begin the following year. If successful, South Korea could challenge Malaysia and China in terms of hydrogen tram technology.

Power and industry are the next frontiers

Power generation is the next step for hydrogen in South Korea. The country reached a crucial milestone earlier this year with the world’s first clean hydrogen power generation auction. This saw 15-year hydrogen power purchase agreements with domestic utility companies made available at fixed-rate prices.

This will be sourced from one of three methods: hydrogen-based electricity generation leveraging turbines or fuel cells, ammonia co-fired in coal power plants, and hydrogen co-fired at natural gas power plants.

It should be noted that the contracts don’t begin until 2028. Technology development and demonstrations in the space remain ongoing. These are expected to conclude no later than 2027.

Another opportunity being explored is using hydrogen to power energy-intensive industries, such as the steel, petrochemicals, and cement sectors. The goal is to replace or reduce the amount of fossil fuel used in these processes. However, targets have been set further in the future after mobility and power generation efforts are up and running.

Missing links for the Korea hydrogen economy

A lack of infrastructure could derail the Korea hydrogen economy. This shortcoming comes in a few different forms. When it comes to the hydrogen vehicle sector, there is a lack of refuelling infrastructure and production facilities. This has caused take up of passenger cars to slow.

Currently, South Korea does not have enough charging stations for FCEVs. Consumers are hesitant to buy these over concerns about the ease of daily usage. This is in stark contrast to electric vehicle charging stations which are now a common sight. Simply building more isn’t the answer as the creation of additional charging stations creates another issue–a shortage of green and blue hydrogen.

The former is made via electrolysis, a carbon-neutral process. The latter captures and stores carbon emissions released during hydrogen creation. Both methods are vital if Korea is to reach its climate targets through increased hydrogen use.

That offers insights into another difficulty South Korea must address in the coming years. Domestic production needs to shift from grey hydrogen to green and blue hydrogen. This area was covered in the Master Plan for Implementing the Hydrogen Economy, and a certification system was recently implemented to incentivise clean hydrogen.

Perhaps of more importance will be clean hydrogen imports as this will make up the bulk of the country’s supply. This requires significant investment in infrastructure, including the building of port cities capable of receiving and storing ammonia and liquid hydrogen.  

The 5th Meeting of the Hydrogen Economy Committee created the framework for the construction of port infrastructure that calls for ammonia terminals to be operational by 2027.

There has also been an emphasis on transportation. At the moment, regional pipeline networks are being built. The creation of a nationwide hydrogen pipeline similar to one used for natural gas distribution has also been discussed.

A truly successful Korean hydrogen economy requires assistance from overseas firms with knowledge and technology to fill existing gaps. Otherwise, the country may struggle to reach its hydrogen ambitions.

Corporate interests are high

Most Korean conglomerates are active in the hydrogen space in one way or another.  Many engineering, procurement, and construction firms, such as POSCO and SK Ecoplant, are planning infrastructure projects and building plants domestically and internationally. Meanwhile, companies like Korea Gas Corporation, Korea Hydro and Nuclear Power, and Korea Power Exchange are driving different parts of infrastructure development. Elsewhere, Hyundai, Hanwha, and Lotte are investing in hydrogen mobility applications.

Korea will host H2Meet in September, and the event is already drawing major interest from the Korean side, along with important European and North American companies.

Final thoughts

South Korea is leading the way in the development of a hydrogen economy. The country’s ambitious roadmap between today and 2050 could be transformational, not just for reaching domestic climate targets but also showing other countries its potential.

Getting to that point will require a lot of hard work as well as collaboration. Building infrastructure and developing technology are things the country cannot accomplish on its own. Companies with those tools and knowledge can find opportunities in the Korea hydrogen economy.

Asian Insiders has recently completed sizeable projects in the Korean hydrogen space, but many additional opportunities are available at the present time. To learn more, schedule a no-obligation call with Sean Han, Managing Partner – Korea: sean.han(at)asianinsiders.com or Hannes Humala, Korea Partner: hannes.humala(at)asianinsiders.com