[월간수소경제 박상우 기자] Subsidies are provided for the production and import of green hydrogen.
On the 11th, Democratic Party lawmaker Kim Seong-hwan proposed a partial amendment to the Hydrogen Economy Fostering and Hydrogen Safety Management Act, which prepares the basis for subsidy support in the production and import of green hydrogen.
The current law, which was amended in June last year, includes the concept of clean hydrogen, which is divided into carbon-free, low-carbon and low-carbon hydrogen compounds, a clean hydrogen certification system for each grade, and administrative and financial support for those who produce and use clean hydrogen.
However, green hydrogen does not receive sufficient support compared to gray hydrogen. The supply of carbon-free hydrogen needs to be actively expanded for carbon neutrality, but the production cost is significantly lower than gray hydrogen using petroleum, coal and natural gas.
While gray hydrogen is priced at $1 to 2.2 per kg, the price of green hydrogen is $3 to 7.2 per kg, a 3 to 4 times difference, which means that green hydrogen is less price competitive. According to the Korea Management Research Institute, the price of green hydrogen is expected to drop to between 1.4 and 2.3 dollars per kilogram around 2030.
However, gray hydrogen is an unsuitable energy source in the carbon-neutral phase because it emits carbon during the production process. On the other hand, green hydrogen is evaluated as a key technology for carbon neutrality because it does not emit carbon because it is produced through the electrolysis of water with renewable energy. The green hydrogen market is expected to reach $300 billion (about 375 trillion won) in 2050, so it is very important to take the technology forward.
For this reason, voices are increasing that competitiveness support is needed at government level until the economic feasibility of green hydrogen is achieved. However, in Korea, there is no basis for support to ensure the competitiveness of green hydrogen under the current law, and the government’s plan for this year also focuses on fostering gray hydrogen.
This amendment includes the content that the government subsidizes the production difference between gray hydrogen and carbon-free hydrogen producers or importers produced using renewable energy. Its aim is to activate carbon-free hydrogen supply and actively achieve carbon neutrality.
Countries around the world are already preparing policies to support green hydrogen produced by renewable energy. The European Union included a plan to introduce a carbon difference support contract system (CCFD) in REpowerEU, which is an energy conversion policy, to pay the difference in the cost of producing green hydrogen and gray hydrogen in the form of a subsidy.
The United States added the world’s first green hydrogen tax credit system to the Inflation Reduction Act (IRA). Germany also plans to provide subsidies when green hydrogen produced outside the country is imported and supplied to Korea. Samil Accounting Company predicts that the global green hydrogen market will reach $300 billion (about 375 trillion won) by 2050.
Representative Kim Seong-hwan said, “For the energy transition focused on renewable energy and the decarbonization of the industrial structure, the supply of green hydrogen must be further accelerated. It is regrettable that the process of securing green hydrogen has been delayed due to a lack of economic feasibility, and industrial competitiveness is also lagging behind.” explained.
