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[Energy] Korea Setting Its Eyes on Creating a Clean Hydrogen Market
The year 2024 is a crucial year for Korea's clean hydrogen economy. This year, the country will launch two monumental programs to promote the production and use of clean hydrogen and create the necessary infrastructure. The first is the Clean Hydrogen Certification System, and the second is the Clean Hydrogen Portfolio Standards (CHPS). Both schemes will be fully implemented in 2024 and their organic connection is expected to provide strong momentum across the clean hydrogen value chain.

Status of Korea’s Hydrogen Industry

Since the announcement of the 1st Master Plan for the Implementation of the Hydrogen Economy in November 2021, Korea has announced a number of clean hydrogen-related policies, including the Plan for Creating a Clean Hydrogen Ecosystem and the Strategy for Fostering the World's No. 1 Hydrogen Industry, as well as convening the 5th Hydrogen Economy Committee in November 2022. In December 2023, the Clean Hydrogen Certification System Operation Plan and the Strategy for Fostering Small-scale Hydrogen Industry Sectors, were discussed as the main agenda of the 6th Hydrogen Economy Committee. Based on the Korean government's strong commitment, the country’s hydrogen industry in growing continuously. The number of hydrogen specialist companies designated by the government to foster the hydrogen industry was only 32 in early 2022, but grew to 91 by early 2024, tripling in just two years.
Status of Korea’s Hydrogen Industry (as of December 2022)
국내 수소산업 동향에 관한 표
Sector Percentage (%) Percentage by company size (%) Sales of
the hydrogen sector (million won)
Investment in
the hydrogen sector (million won)
Large-sized Medium-sized Small-sized Others
Hydrogen production 12.8 14 14 71.7 0.3 2,688,619 1,503,186
Hydrogen distribution 25.8 2.5 5.8 88.8 2.8 1,108,846 106,358
Hydrogen utilization 46.6 12.1 19.3 63.3 5.3 8,090,684 1,799,939
Hydrogen-related services 14.8 5.8 9.8 54.5 29.9 611,345 737,373
Total 100 - - - - 12,499,494 4,146,856
According to the Hydrogen Economy Portal (, the total revenue of the hydrogen industry in 2022 is estimated to be KRW 12.5 trillion, up 51% from 2021. In the same year, the total investment in the hydrogen industry is estimated to be KRW 4.1 trillion, up 418% from the previous year. The number of workers in the hydrogen industry was confirmed to be about 34,380, and those in the hydrogen utilization sector accounted for more than 63%. The high share is believed to be driven by the steady increase of hydrogen vehicles and hydrogen refueling stations, which are the main areas of Korea’s hydrogen use. As of March 2024, there were 34,872 hydrogen vehicles registered in Korea, with passenger cars accounting for the majority. However, it is expected that more hydrogen vans, cargo vehicles, and special-purpose vehicles will be supplied in accordance with the government's aggressive policy to encourage hydrogen vehicles for commercial use. In Korea, commercial hydrogen refueling stations have been built at a rapid pace since 2022 to reach a total of 290 stations in February 2024.

Introduction of the Clean Hydrogen Certification System to Promote Clean Hydrogen Production

In December 2023, Korea announced the official implementation of the country’s hydrogen certification system through the Clean Hydrogen Certification System Operation Plan. The Clean Hydrogen Certification System measures greenhouse gas emissions from the production and importation of hydrogen, and grants the clean hydrogen certification if the processes emit greenhouse gases below a certain threshold as well as providing administrative and financial support. The Korean government has finalized the country’s clean hydrogen certification standard of 4 kg CO2eq/kg H2 by considering international trends and domestic conditions such as technology level and infrastructure. Although the system boundary of GHG emissions is set as Well-to-Gate (from raw material mining to hydrogen production), the government announced that ship emissions for raw material procurement and carbon dioxide transportation will be temporarily excluded from the GHG calculation scope by taking into account the country’s special conditions that make foreign procurement of clean hydrogen impossible and the technology development of eco-friendly ship. In addition, Korea's Clean Hydrogen Certification System values technological neutrality as its main principle of not specifying a technology path for hydrogen production. Hydrogen that passes the certification standards is granted one of the four grades of the clean hydrogen certification depending on GHG emission levels.
Clean Hydrogen Certification Levels
(unit: kg CO2eq/kg H2)
Clean Hydrogen Certification Levels
Type Grade 1 Grade 2 Grade 3 Grade 4
Emissions 0~0.1 0.1~1 1~2 2~4
* Source: Republic of Korea Government (2023). Clean Hydrogen Certification System Operation Plan
Currently, the government has designated a dedicated agency to operate the clean hydrogen certification system and is running a clean hydrogen certification pilot project to help businesses looking to produce or import clean hydrogen receive consulting on clean hydrogen certification before building hydrogen production facilities or launching mass production.

Introduction of the Clean Hydrogen Power Generation Bidding Market to Encourage the Use of Clean Hydrogen

Having recognized that using hydrogen in the power sector is essential for achieving its Nationally Determined Contributions (NDCs), Korea has established an institutional foundation for using clean hydrogen in the power sector. In 2023, the 10th Master Plan for Power Supply and Demand set a goal of reaching the hydrogen to ammonia ratio of 2.1% in power generation (13 TWh) by 2030, which would require the consumption of about 800,000 tons of clean hydrogen in the power sector alone. The Clean Hydrogen Production Standard (CHPS) system was established in the form of a bidding market to offer incentives for power producers to voluntarily participate in this goal. The CHPS will open a forward marking in 2027 for using clean hydrogen for power generation. Under the system, the government concludes long-term purchase contracts of up to 15 years with clean hydrogen power generators to encourage hydrogen power generation.
Clean Hydrogen Power Generation Bidding Market Volume
Clean Hydrogen Power Generation Bidding Market Volume
Bidding market launch year 2024 2025
Commercial operation launch Newly offered volume Commercial operation launch Newly offered volume
Clean Hydrogen Power Generation Market 2027 3,500 GWh 2028 3,000 GWh
* Source: Republic of Korea Government (2023). Public Notice on the Calculation of the Annual Purchase Volume of the Hydrogen Power Generation Bidding Market
Power generators that successfully bid hydrogen power generation volume in the CHPS will be compensated for increases in power generation unit cost resulting from generating power with clean hydrogen. It will be possible to make contracts or investments with business operators of hydrogen production, imports, and infrastructure, based on a reliable source of demand secured for a long time. In order to participate in the clean hydrogen power generation bidding market, operators must prove that hydrogen or ammonia used as power generation fuel is eco-friendly produced through the clean hydrogen certification system or the clean hydrogen certification system pilot project. The CHPS will contribute to the revitalization of the entire hydrogen industry ecosystem by subsidizing the costs arising from using clean hydrogen, making clean hydrogen more accessible and reducing the uncertainty of clean hydrogen production.

As mentioned above, Korea is pursuing its hydrogen economy policy so that it can practically contribute to the country’s efforts to meet its NDCs for 2030. Korea will prepare for the creation of a clean hydrogen ecosystem for three years starting in 2024 by introducing various policies, practice for the following three years and meet its NDC target year of 2030.

By Jiyoung An (
Research Fellow, Ph.D in Economics, Korea Energy Economics Institute (KEEI)

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