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Today, we’ll discuss Korea’s commitment to boosting the hydrogen economy with Professor Kim Pil-soo(김필수) at the Department of Automotive Engineering at Daelim University College. 

Hydrogen-fueled vehicles are increasingly being recognized as the ultimate eco-friendly transportation solution. Hydrogen is an inexhaustible source of energy, and hydrogen cars are zero-emission vehicles as their exhaust is only water vapor. The government hopes to foster those pollution-free vehicles as a future growth engine.

Automobile manufacturing is one of the key industries in Korea, but the domestic market suffers from a so-called “one high and three lows” dynamic, which refers to high cost, low production, low efficiency and low profit. Therefore the government’s plan to promote hydrogen cars also has the purpose of revitalizing the struggling domestic auto industry. 

Fortunately, Korea boasts world-class technology in hydrogen vehicles. It may take some time, but if Korea starts preparing from now, it will surely be a first-mover in the global market. 

The Korean auto industry is facing a crisis. Korea was the world’s fifth-largest producer of vehicles in 2015 but slid to seventh place last year as it became the only country among the world’s top ten auto producers to record a drop in production volume for three consecutive years. 

Korea’s fall in the auto production rankings is attributable to various internal and external factors, including the closure of GM Korea’s plant in Gunsan in February last year, sluggish domestic sales and exports, and a decline in demand in large markets such as the U.S. and China. 

However, hydrogen-fueled electric vehicles remain a strong weapon in the Korean auto industry’s arsenal. Hyundai Motor Company, in particular, is widely considered to possess the world’s most advanced hydrogen fuel cell technology. The largest automaker in Korea began to develop hydrogen cars as early as 1998 and deployed a fuel cell electric bus for pilot operation during the 2006 World Cup in Germany. Hyundai was the world’s first carmaker to successfully mass produce a fuel cell electric vehicle in 2013. 

There’s another reason, in addition to their technological advantages, that Korea is embracing hydrogen vehicles.

But once challenges related to the production, storage, and infrastructure of hydrogen are overcome, hydrogen vehicles will prove to be highly advantageous. it is said that future models can run up to 1,000 kilometers, up from 700 km in today’s cars. And of course, the vehicle emits only water vapor, as I said before.

Hydrogen-powered buses will be useful for long-distance travel, while electric vehicles can be used for short-distance travel in urban areas. I imagine hydrogen cars and electric vehicles will co-exist in the future, just as gasoline-based cars and diesel-powered vehicles share the roads now.

Hydrogen is an abundant chemical substance, making up roughly 75 percent of mass in the universe. It is a clean energy source that does not emit greenhouse gases. 

To promote the use of hydrogen cars, however, related infrastructure must be built, and economies of scale must be feasible.

The auto industry of the future will almost certainly shift to hydrogen cars, given their advantages including long driving distance, short recharging time and zero harmful emissions. It comes as no surprise that the world’s leading players in both the public and private sectors are competing to stake out early leadership positions in a new hydrogen-powered society. Japan, among others, stands out in this field. 

Japan has two highly competitive hydrogen sedan vehicles – Toyota Mirai and Honda Clarity, while Korea has the Nexo SUV made by Hyundai Motor.

There are only 13 hydrogen refueling stations in Korea. In comparison, Japan has more than 120 ones and plans to set up 100 more. Japan’s massive investment in this space demonstrates its determination to lead the hydrogen market. The Japanese government has also carried out various deregulation measures more actively than the Korean government. 

Altogether, Korea should be wary of such a huge push made by a neighboring advanced economy in hydrogen vehicles as it seeks to advance the hydrogen economy itself.

Japan has set a goal to proclaim itself a hydrogen society by the year 2020. To Korea’s west, China is also increasingly focused on hydrogen as part of efforts improve air quality in the Middle Kingdom. Elsewhere, the world’s first hydrogen fuel cell commercial train service was launched in Germany.

These countries are building up hydrogen infrastructure on the back of government support. In Korea, on the other hand, the private sector has been more active than the government in preparing for the hydrogen economy, not just on the roads but inside residential and office spaces as well.

In this regard, the Korean government has been criticized for being rather slow in carrying out hydrogen-related policies. Apparently with this criticism in mind, the government has embraced hydrogen this year.

Importantly, the hydrogen industry will be the first beneficiary of Korea’s deregulation efforts. There are so many regulations concerning hydrogen-fueling stations, in particular. Some areas are under multiple regulations enforced by different ministries. But a “regulatory sandbox” could ease some of the ineffective regulations. The government needs to introduce the regulatory sandbox system in more hydrogen-related sectors so Korea will be able to compete with other developed countries in the hydrogen economy. 

On February 11, the government approved regulatory exemptions for the installation of hydrogen charging stations as the first step in its regulatory sandbox initiative. 42 billion won or about 38 million US dollars will be allocated this year to promote the hydrogen economy. The government also plans to invest 60 billion won, which is roughly 54 million dollars, over the next five years to develop hydrogen production and storage technology. These efforts notwithstanding, Korea still has a long way to go. 

Most importantly, it is necessary to create a testing ground for hydrogen vehicles in Korea. There are only 13 charging stations for hydrogen fuel cell electric vehicles across the nation, a ridiculously small number. The government plans to set up 44 additional charging stations and supply 4,400 hydrogen cars this year. Moreover, the government needs to eliminate legal and institutional stumbling blocks standing in the way of building a hydrogen society. 

Korea has followed advanced countries in many areas over the last four to five decades. But hydrogen vehicles will provide the nation with a great opportunity to become a frontrunner in the global market. In addition to hydrogen cars, the government will also have to foster electric vehicles and plug-in hybrid cars as another growth engine in the short-and mid-term to support the industry in a balanced way. 

By the year 2040, Korea plans to increase the number of hydrogen-fueled vehicles from the current 2,000 to 6.2 million and install 1,200 hydrogen charging stations. It remains to be seen how the market will respond to the government’s grand vision for the hydrogen economy.