[Biz View] Eco-friendly Hydrogen, Likely to Be Widely Used Domestically... But It's Not Easy to Produce Directly

Oil, Decades to Become the Mainstream Energy
Hydrogen Production → Distribution → Consumption Value Chain Must Interlock

Hydrogen car charging at Sangam Hydrogen Charging Station in Mapo-gu, Seoul

[Asia Economy Reporter Choi Dae-yeol] American Edwin Drake successfully drilled the first modern oil well in the mid-19th century by digging into the ground to extract crude oil. This marked the beginning of the modern oil era. At that time, oil was mainly used as kerosene to replace whale oil for lighting lamps. Easily explosive gasoline and sticky heavy oil were considered cumbersome and unnecessary byproducts.

Later, in 1885, the internal combustion engine powered by gasoline was developed in Germany, and seven years later, the diesel engine was introduced, changing the situation. At the beginning of the 20th century, Henry Ford mass-produced affordable cars by lowering production costs, which led to the full bloom of the oil era. The establishment of gas stations everywhere like blood vessels, allowing anyone easy access to oil, was also a key factor. Refining technologies were honed, and by the 1930s, methods for producing chemical products from oil were further refined.

Considering oil as the dominant energy source is natural now, but it is the result of an artificially built system over several decades. The same applies to hydrogen, which is considered the next-generation energy source. Many major advanced countries' governments, including South Korea, and numerous leading domestic and international corporations have identified hydrogen as the future energy. While it is impossible to instantly replace humanity’s century-long dependence on oil with hydrogen, there is a consensus that gradual change is necessary. Nevertheless, transitioning the current energy supply system based on oil remains a challenging task.

SK Group Chairman Chey Tae-won is experiencing a kiosk at the SK booth set up at the '2021 Hydrogen Mobility+ Show' held on the 8th at KINTEX Exhibition Hall 2 in Goyang-si, Gyeonggi-do. In the center is Chung Eui-sun, Chairman of Hyundai Motor Group.
Goyang=Photo by Kang Jin-hyung aymsdream@

Hydrogen utilization technologies such as hydrogen vehicles and fuel cells have advanced, but structural limitations exist in eco-friendly green hydrogen production conditions
"Hydrogen import ratio expected to exceed 80% by 2050 carbon neutrality"

To use fuel as an energy source, it must be found or produced, gathered in a suitable form and delivered to where it is needed (storage and transportation), and then used to operate power devices or generate electricity (consumption). These processes must work together like interlocking gears. Transitioning to a hydrogen society or hydrogen economy is only possible when the entire value chain?including production, distribution, and consumption?is established.

South Korea is considered advanced mainly in utilization technologies. It has the world’s first mass-produced hydrogen vehicles and currently leads in sales volume among automakers, and its manufacturing capabilities for fuel cells, known as mini power plants using hydrogen as raw material, are also considerable. The problem lies in the production stage. The industry foresees that overcoming South Korea’s unfavorable conditions to produce hydrogen in an eco-friendly way in the near future will not be easy.

Hydrogen is classified as gray, blue, or green depending on carbon emissions during production. Hydrogen produced as a byproduct or through reforming processes is called gray hydrogen; blue hydrogen refers to hydrogen where carbon dioxide generated during production is separately captured using technology. Green hydrogen is produced without carbon emissions by using renewable energy such as solar power or water electrolysis technology. Generally, blue and green hydrogen are considered clean hydrogen, with many aiming for a transition to green hydrogen as the ultimate goal.

Solar panels installed near Nipton, California, USA

According to the Korea Energy Agency, the share of renewable energy in South Korea’s total power generation was only about 5.6% as of 2019. This figure even includes sectors like waste energy, hydrogen, and fuel cells, which are not internationally classified as renewable energy. By international standards, South Korea’s renewable energy ratio relative to primary energy is about 2.4%, much lower than European countries such as Italy (18.2%) and Germany (14.6%), as well as the United States (7.9%) and Japan (6.2%).

Following the current trend, even if hydrogen usage increases domestically, domestic production alone will not be sufficient, and a significant portion of hydrogen will need to be imported from abroad. According to a recent scenario released by the Carbon Neutrality Committee, to achieve carbon neutrality by 2050, the proportion of hydrogen imported from overseas is estimated to exceed 80% in any case. It is also projected that South Korea will rank second after China in hydrogen import volume and will have the highest import dependency rate in the world.