"Increasing Hydrogen Car Subsidies and Expanding Hydrogen Cities"… 800 Billion Won Budget for Next Year

Prime Minister Chung Sye-kyun is delivering a welcoming speech at the '2nd Hydrogen Economy Committee' held at the Government Seoul Office in Jongno-gu, Seoul on the 15th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kim Bo-kyung] The government's push for a hydrogen economy will continue next year. According to the 2nd Hydrogen Economy Committee meeting chaired by Prime Minister Chung Sye-kyun on the 15th, the government's hydrogen economy budget for next year is expected to approach 800 billion won. The government budget proposal includes 797.7 billion won, a significant increase of about 35% compared to this year's budget (589.7 billion won).

In particular, subsidies for hydrogen vehicles and infrastructure budgets will be increased and newly established to expand distribution. Subsidies for hydrogen vehicles will increase by about 11 billion won from this year to 33.75 billion won, and a new subsidy of 1 billion won will be established for hydrogen trucks. The budget for hydrogen production bases and highway hydrogen charging stations for next year is set at 56.6 billion won and 16.25 billion won, respectively. The government will support research and development (R&D) projects for eco-friendly hydrogen production and expand budget investments across all fields including hydrogen industry promotion, distribution, and safety.

Additionally, the government will submit the 'Hydrogen City Act' to the National Assembly next month to accelerate the construction of hydrogen cities. A hydrogen city refers to a city where hydrogen production and transportation infrastructure are established, and hydrogen is used as a major energy source in citizens' daily lives. The pilot hydrogen city projects have selected Ansan in Gyeonggi Province, Ulsan Metropolitan City, and Jeonju and Wanju in Jeonbuk Province. Samcheok will be developed as a specialized hydrogen R&D city. The government plans to provide matching support of 20 billion won each from national and local governments.

First, Ulsan aims to become a world-leading hydrogen town by leveraging its advantage of having the largest hydrogen energy production capacity nationwide. It will expand hydrogen infrastructure in various facilities such as housing and hospitals, operate hydrogen buses and trams, and install a dedicated safety inspection center for hydrogen vehicles. Ansan will be developed into an eco-friendly energy self-sufficient city by utilizing regional infrastructure such as tidal power plants, national industrial complexes, and sewage treatment plants. A green hydrogen production demonstration project will be conducted using electricity generated from tidal power plants. Jeonju and Wanju will create a regional convergence-type hydrogen ecosystem, and Samcheok will promote the development of urban infrastructure technologies based on domestic production to increase hydrogen utilization in the residential sector.

The government announced plans to reduce natural gas prices for hydrogen production by up to 43% through reforming the natural gas supply and pricing system. To enhance the competitiveness of extracted hydrogen (gray hydrogen), the supply system will be changed to focus on hydrogen manufacturers. This will allow not only existing city gas companies but also Korea Gas Corporation to directly supply natural gas to large-scale hydrogen manufacturers. A pricing system will also be established to reduce the cost of natural gas for hydrogen production. By applying an individual pricing system to natural gas for hydrogen production, it will be possible to import natural gas separately at recently lowered prices, thereby reducing raw material costs.

Prime Minister Chung said on the day, "Since there is no clear leader yet in the hydrogen sector, we believe that we can sufficiently become a 'First Mover.' We will open the path to the hydrogen economy by uniting the public and private sectors around the Hydrogen Economy Committee as a focal point."

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