South Korea plans to reduce government subsidies for hydrogen-powered passenger vehicles by 11.1 percent next year, marking the first cut in nine years despite its stated goal of expanding the adoption of hydrogen vehicles.
According to detailed documents accompanying the Ministry of Climate, Energy and Environment’s proposed 2027 budget, the central government subsidy for each hydrogen passenger car will fall to 20 million won ($15,000) from 22.5 million won this year.
The reduction of 2.5 million won per vehicle would be the first decrease in the subsidy since 2018.
Although the government plans to maintain its purchase subsidy allocation for 6,000 hydrogen passenger cars, the lower per-vehicle subsidy will reduce the total budget for the program to 120 billion won from 135 billion won this year.
Support for hydrogen buses is also set to decline.
The number of buses eligible for purchase subsidies will fall to 1,400 next year, down from 1,800 this year and 2,000 in 2025, marking a second consecutive annual reduction.
Central government subsidies for low-floor hydrogen buses will decrease to 200 million won per vehicle from 210 million won, while those for high-floor buses will fall to 250 million won from 260 million won.
The reductions come as the government plans to significantly increase funding for electric vehicle adoption while cutting the overall hydrogen vehicle purchase subsidy budget by approximately 23 percent.
The climate ministry initially requested 553.9 billion won for its hydrogen vehicle deployment program in 2027, but the amount was reduced to 445.7 billion won during the government’s budget preparation process.
That represents a decrease of 130.5 billion won, or 22.6 percent, from this year’s budget of 576.2 billion won.
The Ministry of Planning and Budget attributed the reductions to weaker-than-expected demand for hydrogen vehicles.
Only 67 percent of the 638.6 billion won allocated to hydrogen vehicle deployment last year was spent. The budget execution rate stood at just 47 percent as of the end of July this year.
Funding for zero-emission vehicle charging infrastructure will also fall by 28 percent next year.
The budget for building hydrogen refueling stations will be cut by 36.9 percent, while funding for electric vehicle charging infrastructure development and support will decline by 37.2 percent.
The government cited weak budget execution rates of 61.1 percent last year and 59 percent this year as factors behind the reductions.
By contrast, the government has proposed increasing its electric vehicle deployment budget by 22 percent to 2.14 trillion won in 2027.
By Kim Geum-ie and Minu Kim
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
