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South Korea’s uphill struggle to encourage hydrogen cars

25 September 2019

Unlike in many other countries where electric vehicles are the major beneficiary of moves away from fossil fuel-powered vehicles, the South Korean government is encouraging the use of hydrogen fuel cell vehicles.

Hyundai Nexo FCV - Image: Shutterstock
Hyundai Nexo FCV - Image: Shutterstock

President Moon Jae-in is a major proponent of the hydrogen car programme and says he wants to see 850,000 hydrogen fuel cell vehicles (FCVs) on South Korean roads by 2030. This will be no mean feat given fewer than 3,000 have been sold so far in the country.

The government has earmarked $1.8 billion to subsidise car sales and to build refuelling stations for the five years to 2022, according to a recent Reuters report. It says the major advantages of this fuel are pollutant-free emissions, the abundance of hydrogen from a number of different sources including garbage, and rapid refuelling capabilities compared to electric vehicles.  

Subsidies cover about half the cost of the main South Korean FCV car model, the Hyundai Nexo, and the corporation itself plans to invest $6.5 billion by 2030 on hydrogen R&D and facilities.

One of the main problems is building refuelling infrastructure where each hydrogen filling facility costs many times more than an electricity charging point.

Despite government plans for 114 hydrogen stations to be built by end-2019, only 29 have been completed. Difficulties in gaining funds from local governments or businesses meant to help shoulder half the costs, delays in finding sites and opposition from residents have also hobbled efforts.

And this opposition has multiplied since a fatal FCV filling station incident. Last May, a hydrogen tank explosion killed two people and injured six at an industrial park in the city of Gangneung, 240 kilometres east of Seoul.  

A preliminary investigation found the blast was caused by a spark after oxygen found its way into the tank.
One month later, there was an explosion at a hydrogen refuelling station in Norway.

Safety concerns have fuelled protests by South Korean resident groups worried about hydrogen facilities being built in their areas, and local opposition has led to a number of potential operators withdrawing plans to build refuelling facilities.

Others cite the difficulty of making such facilities pay when the government stipulates that fuel costs are kept as low as possible to encourage takeup.

But the Government is forging ahead with its plans. In August, Moon’s administration announced it would more than double spending on the hydrogen economy to over $417 million next year.

That includes $300 million on FCVs and refuelling stations, up 52% from this year and a huge leap from the 29.8 billion won spent in 2018.

Hyundai is banking on Seoul’s aggressive targets to help it achieve economies of scale and bring down costs.

It aims to cut the cost of a hydrogen car before subsidies to 50 million won once annual FCV production reaches 35,000. It hopes to make 40,000 per year by 2022, compared with plans for 11,000 next year.

Another leg of the country’s hydrogen economy is the establishment of a network of hydrogen buses in the south-western city of Ulsan, traditionally a centre for heavy industry.

By 2030, it plans to have 15% of personal vehicles as hydrogen cars and replace 40% of city buses, or 300, as fuel cell buses powered by hydrogen. The municipal office also plans to set up a total of 60 hydrogen refilling stations within the city in the next 12 years.

In an interview with the Korea Herald, Ulsan Mayor Song Cheol-ho said: “We will do our best to turn Ulsan as the global mecca of the hydrogen industry by taking the advantage of being the world’s first manufacturing base of hydrogen cars, and our capacity of producing over 60% of hydrogen in South Korea.”

In the meantime, according to the Reuters report, the constraints around refuelling and the limited number of stations are causing much frustration.

This is compounded by the fact that while refuelling itself takes only five minutes or so, the next driver must wait another 20 minutes before sufficient pressure builds in the storage tank to supply the hydrogen for a full tank in the vehicle.

That means that operators might only be able to service 100 fuel cell cars a day, compared to up to 1,000 at a regular gasoline stand.

In the Asia-Pacific region, other big supporters of FCVs include China and Japan.

China, by far the world’s biggest car market with some 28 million vehicles sold annually, is aiming for more than one million FCVs in service by 2030. That compares with just 1,500 or so now, most of which are buses.

Japan, a market of more than five million vehicles annually, wants to have 800,000 FCVs sold by that time from around 3,400 currently.

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