Only 4 Hydrogen Charging Stations in Seoul... 880,000 Hydrogen Vehicles Targeted in 10 Years "Expand Infrastructure and Subsidies"

Rapid Acceleration of Hydrogen Electric Vehicle Supply Targets with Major NDC Increase Raises Concerns of 'Number Games'
"Significant Expansion of Subsidies and Charging Infrastructure Needed"

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Je-hoon] Concerns are pouring in that the government's national greenhouse gas reduction target (NDC) for the transportation sector, which aims to cumulatively supply 880,000 hydrogen fuel cell electric vehicles (FCEVs) by 2030, may end up being just a 'numbers game.' To achieve the 2030 NDC, the annual supply target must be arithmetically expanded from this year's goal of 15,000 units to 96,000 units per year. However, the infrastructure development is slow, with only four hydrogen refueling stations in Seoul, the capital with a population of 10 million, and the total amount of subsidies is also far from sufficient. Experts point out that systematic and strong policy support, such as infrastructure development and subsidy expansion, must back these goals to avoid them becoming 'rose-colored illusions.'

The Korea Industrial Alliance Forum (KIAF) held an online seminar on the 28th under the theme of 'Achieving Carbon Neutrality and Hydrogen Utilization Industry.'

Jung Manki, chairman of KIAF, said, "To achieve the hydrogen fuel cell vehicle supply target, the government's subsidy payment scale must increase arithmetically by 19.4 times compared to the current level, so urgent measures are needed." He added, "Currently, finished car companies do not increase vehicle production because subsidies are not guaranteed, and consumers hesitate to purchase hydrogen vehicles due to the lack of charging infrastructure, creating a vicious cycle."

The government previously raised the 2030 NDC to 40%, aiming to reduce greenhouse gas emissions in the transportation sector by 37.8% compared to 2018, down to 61 million tons. The core of the transportation sector NDC is the supply of eco-friendly and zero-emission vehicles. The plan is to supply 3.62 million electric vehicles, 880,000 hydrogen fuel cell vehicles, and 4 million hybrid electric vehicles (HEVs) by 2030 to reduce about 30 million tons of greenhouse gases.

The problem is that subsidy and infrastructure policies accompanying these goals have significant gaps. Although the hydrogen fuel cell vehicle supply target was raised from 660,000 to 880,000 units following the NDC upgrade, the total subsidy amount, which is key to expanding zero-emission vehicles, falls short.

The government’s budget allocated for hydrogen fuel cell vehicle supply and hydrogen refueling station expansion is 441.6 billion KRW this year (targeting 15,000 units) and 892.7 billion KRW next year (28,000 units). Considering the current cumulative supply of about 17,000 units, to achieve the 2030 NDC, an additional 96,000 hydrogen fuel cell vehicles must be supplied annually. Given subsidies of 31.5 to 37.5 million KRW per passenger car and 300 million KRW per bus, at least about 5 trillion KRW annually must be invested in purchase subsidies alone, excluding charging infrastructure.

Infrastructure development is also at a standstill. To meet the 880,000 unit supply target, KIAF believes the existing hydrogen refueling station target (660 stations) must be raised to over 1,660 stations. However, as of last month, there are only 117 hydrogen refueling stations nationwide, reaching only about 65% of the original target.

Infrastructure gaps between local governments are widening. In Seoul, due to high land prices and safety concerns, there are only four hydrogen refueling stations in the city. Considering the cumulative supply of 2,197 hydrogen fuel cell vehicles in Seoul, each station must serve 549 vehicles, which is practically impossible. The number of hydrogen fuel cell vehicles in Seoul shrank from 1,069 last year to 557 as of September this year. In contrast, Gyeonggi Province, with 22 hydrogen refueling stations, saw its supply increase from 935 to 1,377 vehicles.

Therefore, it was argued that significant support is necessary to achieve economies of scale in the hydrogen fuel cell vehicle market and meet supply targets. It is necessary to proactively secure subsidy levels commensurate with the goals and expedite approval procedures for expanding charging infrastructure, including allowing hydrogen refueling stations to be installed at propane refueling facilities.

Do Kyung-hwan, CEO of HyNet, pointed out, "In Seoul and Busan, there are only 4 and 2 charging stations respectively compared to the number of hydrogen fuel cell vehicles, with each station handling 500 to 600 vehicles. Building initial charging infrastructure, even at a loss, will greatly contribute to hydrogen fuel cell vehicle supply." He added, "Active administration by local governments and the use of national and public land, as well as utilizing gas stations and liquefied petroleum gas (LPG) facility sites, should also be considered to solve site issues."

Additionally, voices called for urgent policy support to expand hydrogen fuel cell vehicles in the commercial vehicle sector. For example, although large trucks account for only 3.5% of all vehicles, they emit 22.5% of greenhouse gases, so increasing central government purchase subsidies and introducing a hydrogen truck fuel subsidy system as soon as possible to expand supply were proposed.

At the seminar, it was also pointed out that building a 'hydrogen value chain' from hydrogen production, transportation, to storage is necessary beyond just the hydrogen mobility sector. Compared to major advanced countries such as the European Union (EU), Korea remains generally underdeveloped in this area, raising concerns that Korea’s hydrogen industry could become dependent on foreign countries.

Chairman Jung emphasized, "Plans including liquid hydrogen-based infrastructure, a national hydrogen supply chain integrated management platform, and hydrogen cluster formation must be promptly prepared and promoted." He added, "Especially, it is necessary to establish related tax credit items for hydrogen industry activation, including carbon-neutral technologies such as clean hydrogen supply in the steel sector, liquefied hydrogen plants, charging infrastructure, and hydrogen gas turbine technology as national core strategic technologies."

He continued, "The importance of hydrogen carriers cannot be overstated to open the hydrogen trade era, but unlike advanced countries such as Japan, Europe, and the United States, Korea currently has no records of hydrogen carrier ship construction or operation." He concluded, "It is necessary to secure opportunities for construction, demonstration, and commercialization by promoting core technology development and national support demonstration projects as national tasks."

This content was produced with the assistance of AI translation services.