S. Korea Risks Falling Behind In Global Hydrogen Race
Warnings are growing louder that South Korea, which sources more than 90% of its energy from imports, risks being left behind in the global competition for hydrogen energy. While geopolitical risks such as the Middle East conflict have heightened the importance of energy security, prompting major na
South Korea, a nation that sources over 90% of its energy through imports, now faces the risk of falling behind in the global hydrogen energy race. While heightened geopolitical tensions have spurred major nations to invest heavily in expanding their hydrogen sectors, South Korea is moving in the opposite direction, cutting related budgets and policy certainty.
The International Energy Agency (IEA) noted that hydrogen can reduce dependence on imported fossil fuels and enhance energy security. Countries that rely on foreign energy sources, such as South Korea, Germany, and Japan, are expected to gain a competitive edge through renewable energy-based hydrogen. South Korea's energy import dependency has reached 93.7% as of 2024, underscoring the urgency of employing hydrogen to bolster energy security.
Globally, nations are increasingly treating hydrogen as a strategic asset, not just a decarbonization tool. Over 66 countries now have national hydrogen strategies, up threefold from 2021. China has invested 8 billion yuan (1.62 trillion won) in hydrogen urban clusters, Japan has pledged 3 trillion yen (25.87 trillion won) and 15-year support, and the EU is offering 10-year subsidies through the European Hydrogen Bank.
However, South Korea's hydrogen policy has come under scrutiny for waning momentum. In the 2027 budget, subsidies for hydrogen fuel cell vehicles have dropped by 23%, from 576.2 billion won to 445.7 billion won, while refueling station subsidies have been slashed by 37%, from 189.7 billion won to 119.7 billion won. Tax incentives are also set to expire in succession, ending by the end of 2028.
The value-added tax exemption for hydrogen fuel cell buses is set to terminate early, two years ahead of schedule. South Korea, once a regulatory trailblazer, now risks losing its gained momentum. The government's lack of a clear hydrogen bidding plan for the coming years has left companies uncertain about market size, and the Hydrogen Economy Committee's inactivity for nearly two years has further fueled concerns.
Industry officials worry that such policy uncertainty could jeopardize the country's hydrogen leadership and the entire industrial ecosystem.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
