South Korea on a hydrogen mission

The idea that a crisis can be seen as an opportunity ripe for exploitation is one that is extremely widespread in South Korea. The country is investing massively in both hydrogen technology and the hydrogen economy with the aim of minimizing the environmental impact of its industrial and energy sectors. Having previously built up a successful semiconductor industry from scratch, South Korea plans to leverage its experience of adapting and developing disruptive technologies. And it’s a pragmatic route that the nation has chosen to get there, placing an emphasis on the creation of positive market dynamics over and above the ultimate goal of achieving net-zero.

This pragmatism is combined with the structural tendency (path dependence) to find the lowest common denominator that can achieve cross-party agreement when it comes to long-term strategy. Even though the fundamental elements of energy policy are known, it remains to be seen how the newly elected conservative government will fill out the policy framework.

Here, just as in Europe, the taxonomy of clean hydrogen is a weighty issue. Similar to the situation in other European countries, it’s not just technical path dependences but also political ones that are dictating the future hydrogen color spectrum and the classification of clean hydrogen. Current political events, such as the recent election of the conservative government, are having a specific effect on how this is playing out.

“Korea New Deal” creates framework

The COVID-19 outbreak put the brakes on global economic activities to such a degree that a significant decrease in pollution levels could be measured in some locations. However, the economic impact of the pandemic was felt much more severely by many people, especially in the United States. In order to quickly tackle the country’s financial and social problems as well as ultimately address the environmental crisis, the US launched its “Green New Deal” in 2019 with the aim of bringing about the long-term decarbonization of its economy. There was no mistaking here that the financial and environmental crises were being viewed as an opportunity for more sustainable development.

The idea fell on fertile ground in South Korea which by comparison fared well through the pandemic, having avoided full lockdowns and high excess mortality figures and only experiencing a slight economic downturn. On July 14, 2020, President Moon, from the liberal government at the time, presented the “Korea New Deal” which outlined an overall volume of investment that equates to EUR 117 billion by 2025, of which EUR 84 billion was expected to come from state coffers and the rest from private enterprise.

From the total, more than EUR 53 billion are planned to be used for the environmental restructuring of industry, energy generation and housing infrastructure. The remaining funds are earmarked for digitalization and education in the widest possible sense. The Korea New Deal, which also explicitly mentions hydrogen as an energy carrier and hydrogen technology as an instrument on multiple occasions, is the policy framework in which the state-inspired project to establish a hydrogen industry is lodged.

Road map to Korean hydrogen economy

The liberal government, which was voted out of office in May this year, had previously presented its road map to stimulate the hydrogen economy in January 2019. A McKinsey study on the market potential of the hydrogen economy to 2050 described the establishment of a hydrogen economy with its own technology as a huge opportunity. In addition to the desired economic growth fueled by market participation, the report expected that jobs would be created in midsize companies, technology leadership might be established – thus creating chances for further direct investment from abroad – and enormously high dependence on fossil fuel imports would gradually decline.

What’s more, the hope was also expressed that huge savings would be made in terms of greenhouse gas emissions and particle pollution. While South Korea doesn’t have a long tradition in hydrogen technology to look back on, it is familiar with the rapid adaptation and development of disruptive technologies and has the necessary motivation to achieve this. Indeed it has announced the following specific targets announced for 2040:

Sector To achieve by 2040





(export and domestic market)


Domestic market

Ttl hydrogen vehicles 6.2 million 2.9 million
of which cars 5.9 million 2.75 million
of which taxis 1.2 million 0.8 million
of which trucks 1.2 million 0.3 million
of which buses 0.6 million 0.4 million
Hydrogen refueling stations not specified more than 1,200
Energy production

(fuel cell capacity)

Industrial production 15 GW 8 GW
Private production not specified 2.1 GW




Hydrogen supply

Ttl hydrogen production (requirement) not specified 5.26 million tpa
Partial oxidation (H2 as byproduct)  

not specified


together approx. 70% share

Reduction from CH4 not specified
Electrolysis not specified
Import of CO2-neutral hydrogen (Australia, Norway, Saudi Arabia) approx. 30% share not specified
H2 target price (converted) not specified EUR 2.20/kg


Hydrogen given legal weight

To Western observers, such targets will doubtless seem very ambitious or indeed unrealistic and only time will tell whether they can actually be achieved. Nevertheless, any assessment must take into consideration the fact that the Korean hydrogen industry is embedded in an entirely different legal and policy framework to the European model. For instance, the hydrogen law that was passed in February 2020, which currently comprises eight chapters and 62 articles and was the first law of its kind in the world, now governs key areas concerning the systematic development of the hydrogen economy. Furthermore, the then government, together with the national hydrogen council, set up an expert commission on the regulation and control of policy content and processes relating to hydrogen technology and the hydrogen economy.

The first major area of the hydrogen law can be said to be the legal framework surrounding state-supported “hydrogen-specialized enterprises.” These are defined as small- and medium-sized companies which, depending on their overall turnover, generate between 10 and 50 percent of their income from hydrogen technology and dedicate 3 to 15 percent of their investment to hydrogen-related R&D activities (cf. chapter 1, article 2, paragraph 3). The law sets out various incentives to attract companies for the newly created certification scheme as well as for the overall national hydrogen industry project. These inducements may include more than EUR 100,000 of funding per company which can take the form of technical support (e.g., development, certification and patent registration) or commercial support (e.g., advertising, trade fair participation, market research, design development and brand development) (cf. chapter 3, article 9).

Additionally, certified companies are able to receive help and advice from H2KOREA, a consultancy financed by the state and the private sector that is tasked with promoting the hydrogen economy and which also receives a mention in the hydrogen law (chapter 5, article 33). The law further sets out that the legislator can urge energy suppliers, which are generally state owned, to expand hydrogen production and utilization capacity (cf. chapter 4, articles 19 – 21).

To boost the build-out and development of infrastructure, including facilities for development and testing, the legislator also focuses on the designation of “hydrogen-specialized complexes” (chapter 4, article 22). This primarily involves the creation of industrial clusters that can accommodate companies as well as research facilities and educational institutions in order to generate synergies and spillover effects between the organizations involved. In this regard the law creates a framework that allows decisions to be made about where the specialized complex designation is used and what proportion of funding will be allocated. These special-purpose hydrogen zones are being planned primarily in the northeastern Gangwon Province, the southeastern Gyeongsang Province, the southwestern Jeolla Province and the northwestern industrial city of Incheon.

The same law also provides for the expansion of hydrogen demonstration projects (chapter 4, article 24). So as to ensure price stability on the supply side, the legislator obliges gas suppliers to trade natural gas for reforming purposes at a capped price (chapter 4, paragraph 25). However, specific rates have not yet been set. Other key areas are, for example, the training of specialist personnel (chapter 5, paragraph 26), the creation of applicable industry standards (chapter 5, paragraph 27) and the encouragement of acceptance among the general public (chapter 5, paragraph 31). As revealed by the law’s full title (the Hydrogen Economy Promotion and Hydrogen Safety Management Act), its main concern is to put in place rules that cover the safety management of this new technology.

Korea H2 Business Summit

Evidence that the country’s hydrogen ambitions are also shared by industry, and are not just the subject of a government decree, can be found in the guise of the Korea H2 Business Summit which was held for the first time in September 2021 in South Korea. Among the 17 founder members of this initiative are leading national groups and corporations that are keen to cooperate on hydrogen technology. Many of these groups have already pledged billions in financial support. According to media reports, total investment in the lead-up to 2030 runs to more than EUR 31 billion.

Groups invest billions

One company that particularly stands out is the conglomerate SK Group, which wants to become one of the top hydrogen producers over the coming decades. More than EUR 13.5 billion are set to be channeled into creating production capacities of more than 250,000 tons per year up until 2030. As a result, Boryeong, a city situated on the west coast which also has its own liquefied natural gas terminal, is expected to become the world’s largest hydrogen factory. At the moment SK is concentrating its efforts on manufacturing affordable blue hydrogen which should accelerate the build-out of the entire value chain from transportation through energy extraction. As a logical extension of this, SK is also investing in increasing the number of refueling stations and expanding fuel cell capacities. That said, the company has already signaled that it intends to invest in production capacity for green hydrogen as well.

Also automotive manufacturer Hyundai has restated its commitment to hydrogen mobility, claiming it will make a total investment of more than EUR 8 billion by 2030. Despite the continuing commercial success of its hydrogen-powered Nexo model, the corporation recently announced that it would be pausing the development of its successor, Genesis, in a surprise admission that affected the stock prices of many suppliers. However Hyundai has clarified that the deferment is only due to internal restructuring of development and that the company is still maintaining its hydrogen course.

The automaker is currently working on a compact 100-kilowatt fuel cell which it says will save a good 30 percent in space and around 50 percent in price compared with the 200-kilowatt fuel cell that was incorporated in the Nexo model. This, it explains, will not only greatly broaden its scope of application in the mobility sector but will also potentially widen its customer base. Besides further developing its hydrogen mobility portfolio, Hyundai is also involved in the serious task of expanding fuel station infrastructure.

Another important member of the Korea H2 Business Summit is the steel giant POSCO which is planning to invest more than EUR 7 billion in hydrogen by 2030. On the one hand, POSCO is building industrial plants for extracting gray and blue hydrogen but it is also eager to create capacity for green hydrogen in the longer term. What’s more, the group intends to decarbonize its core steelmaking business and, to this end, is increasing its use of hydrogen direct reduction, a process which has been promoted since 2003 under the Finex brand. The company’s goal is to switch its manufacturing operations completely to hydrogen direct reduction by 2050.

Fig.: Hyundai Motor Group Chairman Eui-sun Chung, SK Group Chairman Tae-won Chey, POSCO CEO Jeong-woo Choi and Hyosung Group Chairman Hyun-joon Cho take photos in front of Hyundai Motor’s hydrogen fuel cell truck

One major corporation that is placing much greater emphasis on green hydrogen is the Hanwha Group. Its takeover of German photovoltaics company Q Cells back in 2012 enabled it to position itself within the renewables sector and subsequently become the market leader. As a means of complementing its PV portfolio, Hanwha now also plans to invest in electrolyzer technology, preferring to focus on innovative anion exchange membrane or AEM electrolyzers.

In a move that will take the company a step further in the value chain, the group’s chemicals division is busy developing a gas turbine that will use a blend of LNG and liquefied hydrogen to generate power. To drive forward this development, last year Hanwha took over the US turbine manufacturer Systems Mfg as well as Dutch energy technology company Thomassen Energy. By 2023 Hanwha hopes to start supplying the first turbines to Korean grid operators. As hydrogen is due to make up more than 50 percent of the gas mixture, the turbines will bring about a significant reduction in greenhouse gas emissions. With plans to invest almost EUR 1 billion by 2030, Hanwha is setting its sights on becoming one of the major players in the hydrogen economy. There are already signs that the company is well on its way: According to media reports, Hanwha has just recently been awarded a contract from German supplier Uniper.

Also the Hyosung Group, which made headlines through its cooperation with Linde, is continuing to pursue hydrogen. The company plans to invest EUR 800 million in the lead-up to 2030. Hyosung built its first hydrogen filling station in South Korea in 2008. Now, with over 20 refueling stations to its name, the company is the country’s market leader. Yet Hyosung wants to go even further. Through its partnership with Linde, the company is intending to make a large-scale move into the production of liquefied hydrogen, otherwise known as LH2. By mid-2023, the factory is expected to have reached a production capacity of 13,000 tons a year. The collaboration also covers the development of cryopump technology which is needed for refueling when hydrogen is in its liquid state.

Since the group manufactures carbon-fiber mesh, it is also looking to participate indirectly in the market for hydrogen tanks, which are generally made from fiber composite material. Saving greenhouse gas emissions, for instance by producing green hydrogen through electrolysis or by storing and processing carbon dioxide, are Hyosung’s longer-term aims.



(EUR billions by 2030)

Investment area


SK Group

Conglomerate (energy, chemicals, IT, etc.)


  • Hydrogen factory (first “blue,” later “green”)
  • Hydrogen liquefaction plant
  • Increase in fuel cell capacities
  • Increase in fuel station infrastructure
  • H2 production of 250,000 tpa (by 2025)
  • To become the largest H2 producer
  • Construction of 100+ H2 fuel stations (by 2025)
  • Creation of 400+ MW fuel cell capacity

Hyundai Motor Company

Vehicle manufacturer


  • H2 vehicles
  • H2 mobility infrastructure
  • Switch to H2 mobility by 2040
  • Global number 1 in H2 mobility sector

POSCO (Pohang Iron and Steel Company)



  • CH4 reforming (blue hydrogen)
  • Manufacture of green hydrogen abroad
  • Steelmaking through H2 direct reduction (FINEX product)
  • Switch to H2 direct reduction by 2050
  • Gray H2 production of 700,000 tpa (by 2025)
  • Blue H2 production of 5,000,000 tpa (by 2030)
  • Green H2 production of 50,000,000 tpa (by 2050)

Hanwha Group

Conglomerate (chemicals, equipment, IT, heavy industry, etc.)


  • Innovative electrolyzers
  • Power-generating gas turbines running on blended gas
  • Setup of complete H2 value chain (solar cells, electrolyzers, H2 tanks, fuel stations, fuel cells)

Hyosung Group

Conglomerate (chemicals, machine building, IT, etc.)


  • LH2 hydrogen factory
  • Cryogenic pump technology for H2
  • Carbon-fiber mesh for fiber composite tanks
  • H2 production of 130,000 tpa (by 2023)

Achievements so far

Despite the voting out of the liberal government that was initially responsible for the national drive toward hydrogen, the subject of hydrogen seems to have gained cross-party support in South Korea, even if there is no consensus on the color of clean hydrogen. That there is unity at all on the matter of hydrogen technology is still a major coup.

The area in which this success is most apparent is transportation. More than 30 percent of hydrogen vehicles sold globally are now driving on Korean roads, and most of these are emblazoned with the Hyundai logo. Not only that, South Korea is also the place where infrastructure expansion is advancing most rapidly, with over 130 hydrogen refueling stations already in place.

Progress in the hydrogen technology sector is plain to see. By May this year, H2Korea was able to certify a total of 44 companies as hydrogen-specialized enterprises. It’s reasonable to assume that more than 90 percent of all key components for the hydrogen sector can now be supplied by domestic industry.

What South Korea is still lacking, however, is clean energy. At the moment more than 60 percent of energy is obtained from coal and gas, around 30 percent comes from nuclear power and only about 5 percent is generated from renewable sources such as wind, solar and hydropower. Consequently, South Korea’s annual hydrogen production of 200,000 tons is limited almost exclusively to the reforming and separation of hydrocarbons. As such, most hydrogen is either blue or gray.

It is therefore fair to say that South Korea, by taking a long-term policy decision and making generous investment and support measures available, has created a solid foundation for establishing a green hydrogen economy that is supplemented by imports. However, right now, this future green hydrogen economy can be likened to a large construction site in which thick dust clouds are obscuring the color and contours of the new building. Only when the dust finally settles will it reveal its shade and shape.

Outlook on the new government

Much of what is being done today harks back to President Moon’s liberal administration which governed from May 2017 until May this year. It was this previous government that initiated, among other things, a reform of the already adopted hydrogen law and this amendment was passed just as power changed hands. Paralleling the European debate, the main thrust of the reform was the stipulation of legally binding definitions of clean hydrogen which distinguish between hydrogen that is associated “with a small amount” of greenhouse gas emissions and hydrogen that produces none at all. In other words, it centers on how to deal with hydrogen that is not 100% green.

Furthermore, an agreement was reached on a legal price cap for gas that is intended for the production of hydrogen. The most important addition, however, was the provision relating to Clean Hydrogen Portfolio Standards or CHPS which gives suppliers and other market participants quotas for hydrogen production, takeoff and power conversion. This was well received by the stock market and the industry alike.

Nevertheless, the recently elected conservative government led by President Yoon has now brought the expansion of nuclear energy back into play, a development which has caused mixed reactions. While the new government has declared its intention to continue growing the hydrogen economy in its strategy paper, a question mark hangs over whether pragmatism will actually accelerate climate reversal or quite the opposite.

Moritz Haarstick
Seoul National University, KOTRA (Korea Trade-Investment Promotion Agency), Hamburg

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