Gov’t to spend $2.3B on hydrogen cell vehicles

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Gov’t to spend $2.3B on hydrogen cell vehicles

To shift away from traditional fossil-fuel vehicles and ultimately reduce pollution, the Korean government will spend 2.6 trillion won ($2.34 billion) over the next four years to promote fuel-cell electrical vehicles (FCEV), the industry minister said on Monday.

“Despite the vast potential, we have not had a policy framework that encompasses the entire ecosystem of hydrogen vehicles,” said Paik Un-gyu, the minister for trade, industry and energy, during a meeting with representatives of local auto and energy companies on Monday in Seoul. “The government will provide all the support necessary for Korean companies to not fall behind and create an ecosystem covering hydrogen vehicle [production], charging stations and hydrogen energy [development].”

Paik said that the government will spend 450 billion won over the next four years to subsidize the purchase of 16,000 FCEVs. It will increase the number of hydrogen-fueled buses in the public transportation system. The city of Seoul will introduce the country’s first hydrogen bus next month. The government hopes that nationwide, the number of fuel-cell buses will increase to 1,000 by 2022.

Infrastructure is one of the most important issues. It has been pointed out repeatedly by consumers and market insiders that a lack of charging stations is the most urgent issue to be resolved in order to induce more people to purchase hydrogen cars.

Currently, there are eight hydrogen stations across Korea that the general public can use, two of them in Seoul - one in Sangam, western Seoul, and one in Yangjae, southern Seoul.

As a solution, the Trade Ministry said it will launch a new company by November 2018 this year to build and operate hydrogen charging stations across the country, pouring in 150 billion won. By 2022, the ministry hopes to build as many as 310 charging stations in Korea.

The government will also add hydrogen energy and its development into the government’s energy plan, which will form the basic policy framework for the country’s energy usage from 2019 to 2040. Stabilizing the supply of hydrogen energy would bring down its cost to as low as 70 won per kilometer on average. An official from the Trade Ministry said that the average price of fuel for gasoline vehicles is 155 won per kilometer and 92 won per kilometer for diesel vehicles.

President Moon Jae-in vowed during his presidential campaign to drive diesel vehicles off of Korean roads by 2030 and reduce fine dust emissions by more than 30 percent.

But the government’s ambitious plans may be premature, and don’t touch on the most fundamental issue: where hydrogen as a fuel source comes from, according to an industry expert.

“It’s true that hydrogen cars are ultimately where this industry will head,” explained Kim Pil-soo, an automotive engineering professor at Daelim University. “And it is important that Korea get a head start and put itself in an advantageous position, ahead of other countries.

“But it will take another 10 years or more until this new vehicle becomes profitable for auto companies,” Kim added. “Leading automakers other than those from Japan and Korea [Toyota, Honda and Hyundai] have yet to commit themselves to mass producing fuel-cell vehicles because, even though they have the core technologies, it’s too early for them to become a lucrative business item.”

Kim, who is president of the Korea Electric Vehicle Association, explained that the hydrogen fuel currently being used to run fuel-cell vehicles is extracted from fossil fuels.

“We need to develop a technology to safely and stably produce hydrogen from water,” Kim said. “What good does it do if we still rely on fossil fuels to run FCEVs?”

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