South Korean government announces roadmap for hydrogen economy

StartFragmentSkeptics point to plan’s excessive optimismEndFragment

(HANKYOREH, Jan. 20, 2019)

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StartFragmentThe roadmap for ramping up the hydrogen economy released by the South Korean government on Jan. 17 has the mid- and long-term objective of using hydrogen as a major energy source that can replace fossil fuels such as coal, petroleum and natural gas. The plan is for hydrogen to drive a new growth engine and turn South Korea into a society fueled by eco-friendly energy. The greatest obstacle, however, is that many are skeptical about whether a hydrogen economy is the ultimate future that South Korean society ought to be moving toward.

The government’s plan is focused on increasing production of hydrogen-powered fuel cell electric vehicles, expanding the supply of fuel cells and building a system of producing and supplying hydrogen. By 2040, the plan seeks to increase the cumulative total of fuel cell vehicles to 6.2 million, raise the number of hydrogen refueling stations to 1,200 (from just 14 today) and also boost the supply of power-generating fuel cells. Through these measures, the government hopes to create 420,000 jobs and 43 trillion won (US$38.35 billion) in value added each year in 2040.

The government’s choice of hydrogen as a new growth engine appears to be based on both environmental and economic considerations. Hydrogen is not only a source of energy with the potential to replace the carbon economy, but also a field that South Korea could potentially come to dominate, since only a few countries (including the US, Japan and Germany) have made inroads there so far. If, as the government hopes, hydrogen becomes the fuel for automobiles and other forms of transportation and the major source of energy for producing electricity and heat, it will bring not only major social and economic changes but also transform people’s way of life.EndFragment

StartFragmentWill hydrogen cars stay competitive with other energy sources?

But many argue that the government’s goals are too optimistic. In order for hydrogen to become a meaningful source of energy for transportation and power generation, it will have to leapfrog electric cars, renewable energy and energy storage systems, all of which have already emerged as an “alternative” to the internal combustion engine and traditional types of fuel.

The government projects that hydrogen car production of 35,000 units a year would drive the price down to 50 million won (US$44,583) and 100,000 units a year would drive the price still further to 30 million won (US$26,750), which would be on par with gas-powered cars. Therefore, the government regards the crux of its plan to be helping a producer such as Hyundai Motor set up a system of mass production.

“Last year alone, there were more than 4,000 people on the waiting list for hydrogen cars. Since these cars are sold as soon as they roll off the line, the important thing is creating a mass-production system,” said an official at the Ministry of Trade, Industry and Energy.

But even if the government’s plan of reaching the commercial mass-production level of 100,000 vehicles per year (60,000 for domestic sale and 40,000 for export) is achieved by 2025, the global market situation may have been changed by then in terms of the level of electric vehicle technology development and price competitiveness. And with substantial progress in energy storage system (ESS) and other battery technology that has already reached the commercialization stage, some are suggesting the value of hydrogen as a means of storing surplus electricity could diminish.

The South Korean government remains confident, insisting that South Korea’s world-class levels of hydrogen fuel cell electric vehicle and fuel cell technology mean it could become a leader in the global hydrogen economy with the right support.

“South Korea possesses advantages with its world-class technology in areas including hydrogen fuel cell electric vehicles and fuel cells, its top-of-the-line petrochemical base, its production capabilities and usage experience with byproduct hydrogen [produced as part of the petrochemical process], and its fully equipped nationwide natural gas supply capabilities,” said Vice Minister of Trade, Industry and Energy Cheong Seung-il.

“There is nothing unreasonable about the current road map targets or development/mass-production plan,” Cheong insisted.

Debate surrounding legitimacy and efficiency of hydrogen as eco-friendly fuel source

The question of whether hydrogen is truly capable of providing an eco-friendly, high-efficiency energy source is also hotly debated. Hydrogen does not exist by itself in nature, and additional energy sources such as electricity are required to obtain it. In addition to the energy losses that occur in extracting it from lignite and other sources, the process also results in emissions of carbon dioxide, sulfur oxides, and fine particle dust.

“The hydrogen at the core of the ‘hydrogen economy’ is not something that can be obtained with ease. It involves refining natural gas or crude oil, which results in carbon dioxide and other materials being emitted,” said Korean Federation for Environmental Movement Secretary General Yang-Lee Won-young.

“It’s difficult to fathom spending so much money on hydrogen when its production efficiency is so poor,” Yang-Lee said.

The South Korean government stated that its hydrogen economy target was based on a general consideration of economic feasibility and eco-friendliness. But with critics fearing that limited investment resources could be channeled excessively toward hydrogen, the government now faces the task of having to properly address both issues.

By Hong Dae-sun and Choi Ha-yan, staff reportersEndFragment