Amid fierce competition for preoccupying the global hydrogen industry, the domestic ecosystem has been stagnant due to lack of government support. Although Korea has been preempting hydrogen technology since 30 years ago led by private companies such as Hyundai Motor, it is pointed out that the next food product is on the verge of being depleted, as R&D has not been able to speed up due to aggressive industrial support from major countries such as the U.S., China, and Japan.
According to the Ministry of Climate, Energy and Environment on the 26th, 82.7% of 2,932 domestic hydrogen companies did not have an R&D department last year. Only 11.2% of companies owned corporate-affiliated research institutes. Although it is an industrial structure that requires initial investment costs and economies of scale, the size of investment is gradually decreasing. Among hydrogen companies, only 7.6% said they received state funding, and the majority (92.4%) said they had never received state funding.
The amount of investment in the corporate hydrogen industry increased only 4.6% from 4.1469 trillion won in 2022, when the government survey was first conducted, to 4.3373 trillion won in 2024. R&D development costs plunged 26.8% from 1.12 trillion won to 821.2 billion won.
Experts agree that in order to revitalize the domestic hydrogen industry, the government should review the previous policy stance that weighs on the production of green hydrogen (hydrogen made through renewable energy).
Experts cited high production costs of clean hydrogen as the biggest problem for the domestic hydrogen industry. Green hydrogen, a representative clean water source, is made by water electrolysis that breaks down water into hydrogen and oxygen using electricity produced by renewable energy such as solar and wind power. China has installed large-scale solar and wind power facilities in vast deserts and makes hydrogen relatively cheaply in connection with water electrolysis facilities, but Korea does not have such technology. In fact, the average hydrogen production cost of domestic water electrolysis production bases was 18,163 won per kilogram. On the other hand, China lowered the unit price of green hydrogen production to 14 to 18 yuan (about 2,800 to 3,600 won) per kilogram in some demonstration projects in areas rich in renewable energy resources such as Inner Mongolia and Xinjiang.
The problem is that even in this situation, the government is putting policy weight on domestic clean hydrogen production. The Ministry of Climate announced the reorganization of the hydrogen power generation bidding market in June this year and said it would reorganize the evaluation system in the direction of fostering a clean hydrogen production ecosystem based on water electrolysis in Korea.
Lee Sang-joon, a professor at Seoul National University of Science and Technology, said, “There are not enough conditions to only produce hydrogen by installing renewable energy on a large scale in Korea,” adding, “We should consider easing domestic conditions to allow some overseas hydrogen or using blue hydrogen without sticking to only green hydrogen.” Cho Hong-jong, an economics professor at Dankook University, said, “When electricity rates are low, hydrogen can be made inexpensive by water electrolysis. In Korea, there is a limit to lowering production costs only with renewable energy, so nuclear power plants should be greatly increased.”
[Reporter Na Hyunjun]
