South Korea has long been one of the most enthusiastic proponents of the hydrogen economy, in 2019 becoming the first country to produce an H2 roadmap — and ambitious targets — to using hydrogen at scale to decarbonise its economy.

 

However, a new report from the International Energy Agency (IEA) has suggested that South Korea’s short-term emphasis on incentivising hydrogen demand in mobility and power production is insufficient on its own and more action is needed to direct clean molecules to where they are most needed — and at a lower cost.

 

Korea’s Basic Hydrogen Implementation Plan, introduced in 2021, targeted clean hydrogen demand of 3.9 million tonnes of H2 per year by 2030, almost all of which would be used in power production or mobility.

 

The country has subsequently introduced substantial subsidies for hydrogen refuelling infrastructure and hydrogen-powered passenger vehicles and buses, as well as auctions for clean hydrogen-based power capacity.

 

“Korea focuses on demand-side policies to kick off the market for clean hydrogen, specifically by incentivising the use of hydrogen in electricity generation and mobility,” the IEA said in its Korea 2025 Energy Policy Review, released yesterday.

 

“Although this may be a good strategy to attract the first import volumes of clean hydrogen, Korea may have to identify other decarbonisation options for its hydrogen economy, with an emphasis on cost-effectiveness.”

 

In total, the government is targeting 3.53 million tonnes per year of demand for power production by the end of this decade, and 370,000 tonnes per year for vehicles.

 

Longer term, South Korea is targeting hydrogen-based decarbonisation in its vast steel, refining and chemicals sectors, expecting clean H2 demand of 12.2 million tonnes per year by 2050.

 

However, this is still less than half of the targeted demand of 27.9 million tonnes per year by 2050 as outlined in the Basic Plan, which is targeting 13.7 million tonnes for power production and 2.2 million tonnes for vehicles.

 

The IEA added: “Korea should clarify the policy instruments needed to increase the use of hydrogen in hard-to-abate sectors such as industry and heavy-duty transport, which were envisioned in the Basic Plan for Hydrogen Economy Implementation and subsequent policies.”

 

Like Japan, Korea wants to co-fire hydrogen and ammonia in gas and coal-fired power plants, respectively, in order to reduce emissions whilst still keeping its fossil- fuel-powered fleet on line.

 

However, the approach is very expensive, and emissions reductions would be minimal, especially when co-firing up to 50% ammonia with coal, which experts have found would be more polluting than simply operating a gas-fired power plant burning 100% methane.

 

South Korea is also the world’s leading market for fuel cell-powered vehicles (FCEVs), with 37,000 units on the road in 2024, accounting for 50% of the global stock for passenger FCEVs.

 

However, there were no heavy-duty FCEVs in the freight transport sector on the road by the end of 2024, which the IEA noted, represents a potential growth area for the country.

 

Due to the abundance of hydrogen refuelling stations for buses and cars, “Korea is in a strong position to develop hydrogen-powered heavy-duty vehicles”, it added.

 

Imports

 

With its relatively low renewables potential, South Korea is also set to rely heavily on imports of clean hydrogen to meet its targets.

 

Of the 27.9 million tonnes it hopes to be using by 2050, just five million tonnes per year would be produced domestically, according to the plan (three million tonnes of green H2 and two million tonnes of blue), with the remaining 22.9 million tonnes per year met by imports.

 

In order to reduce the cost of clean hydrogen, the IEA also called for Korea to resist the temptation to convert hydrogen derivatives into other H2-based products following import.

 

“It should aim to reduce the number of conversion steps when importing hydrogen from abroad, for example by using the hydrogen (carrier) in the form it arrives in Korea,” the intergovernmental body said. “To achieve this, policy instruments based on the entire “well-to-wheel” value chain should be strengthened.”

 

In other words, imported ammonia should be used in Korea as ammonia, rather than being cracked into hydrogen and nitrogen, which would add significantly to costs.

 

The IEA additionally called for Seoul to bring in clear rules, currently lacking, on building, owning and operating hydrogen infrastructure such as pipelines and import terminals.

 

“Investors and project developers need clear and stable regulatory frameworks to back their investments,” the agency said. “Without timely buildout of infrastructure, the link between hydrogen supply and demand is broken, leading to uncertainty and stunted market growth.”

 

Source:HydrogenInsight