[Column] Hydrogen Commercialization, Disruptive Innovation Like Shenzhen, China

An eco-friendly hydrogen bus is passing a stop in Gangdong-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

Shenzhen City in Guangdong Province, southern China, can be called an electric city. All buses and taxis here operate on electric power without emissions. Half of the vehicles on the road bear green license plates, indicating eco-friendly vehicles. While this change has occurred in South Korea only in the past 2-3 years, Shenzhen began transforming its buses into electric vehicles in 2017, followed by taxis in 2018, and to date, more than 40,000 vehicles have been converted to electric cars.

The government and Shenzhen have poured massive subsidies into purchase incentives and expanded charging infrastructure. Currently, China has established a value chain that threatens the global electric vehicle market. BYD, headquartered in Shenzhen, is a major company famous for electric vehicles and batteries. The fact that more than half of domestic electric buses are Chinese-made is a result of their cultivation of an independent ecosystem.

My visit to explore Shenzhen’s electric vehicle ecosystem was in April last year. The reason Shenzhen has come to mind again a year later is hydrogen. Hydrogen is regarded as a next-generation energy source that can be widely used in power generation and transportation, but it is still an emerging field.

This year, the domestic hydrogen industry reached a turning point. SK E&S, Doosan Enerbility, and Hyosung Heavy Industries produce about 40,000 tons of liquefied hydrogen annually in Incheon, Ulsan, and Changwon. Liquefied hydrogen is gaseous hydrogen cooled to an extremely low temperature (minus 253 degrees Celsius) and liquefied. This is the first step toward hydrogen commercialization. In its liquefied state, hydrogen’s volume is reduced to 1/800 compared to its gaseous state. This makes transportation and storage much more efficient and increases its commercial applications.

Although hydrogen commercialization is approaching rapidly, unfortunately, there is no ‘disruptive innovation’ like Shenzhen in South Korea. This is because there is no suitable demand to absorb more than 40,000 tons of liquefied hydrogen annually. Hydrogen-powered buses suitable for long-distance and long-duration operation numbered about 580 as of the end of last year. The government announced plans to rapidly increase hydrogen buses to 2,700 this year and 21,200 by 2030, but it is doubtful whether these targets will be met. The 2022 target for hydrogen bus deployment was 2,000.

Increasing demand is key to smooth hydrogen commercialization. Currently, the total subsidy of 300 million won is insufficient for operators to adopt hydrogen buses. Bold support is urgently needed to create an innovative city like Shenzhen.

Jung Dong-hoon, Industrial IT Department Photo by Jung Dong-hoon