[C Tech Now] Liquefied Hydrogen, Declared 'This Year as the Inaugural Year,' Faces Repeated Delays in Commercial Operation

SK E&S Operates Only One Liquefaction Unit Commercially
Haichangwon Hampered by Political Issues
Linde Hydrogen Energy Limited to Test Runs
Business Constraints Due to Lack of Safety Standards and Special Exceptions

SK Incheon Liquefied Hydrogen Plant Panorama

"This year will be remembered as the inaugural year of the liquefied hydrogen era that will change the flow of South Korea's energy industry history." On May 8th, a completion ceremony was held for the world's largest liquefied hydrogen plant at IGI Co., Ltd. in Wonnam-dong, Seo-gu, Incheon. IGI is a subsidiary established by SK E&S in 2021 to promote its liquefied hydrogen business. Government and corporate officials attending the ceremony unanimously expressed their expectations that this year would be the inaugural year of liquefied hydrogen.

SK E&S's liquefied hydrogen plant is a liquefied hydrogen production factory capable of producing 30,000 tons annually and was regarded as a signal to open the era of liquefied hydrogen in Korea. However, currently, only one of the three liquefaction units (train) is in operation. It is understood that the plant is currently producing less than one-third of its actual possible production capacity.

Earlier this year, Hi Changwon, which completed Korea's first liquefied hydrogen plant in January, has yet to enter commercial operation. Linde Hydrogen Energy, a joint venture between Hyosung Heavy Industries and France's Linde, also built a liquefied hydrogen plant in Ulsan but is only conducting test operations.

With liquefied hydrogen plants starting operations one after another, expectations were high that 2024 would be the inaugural year of liquefied hydrogen, but proper commercial operations have not been realized even as the year-end approaches. The biggest reason is a lack of demand. There are still not enough hydrogen refueling stations to receive liquefied hydrogen. In some regions, liquefied hydrogen plants have become political issues, hindering progress.

"No buyers even if produced"

Liquefied hydrogen is hydrogen that exists as a gas at room temperature but is cooled to -253 degrees Celsius to become liquid. Its volume is reduced to 1/800 compared to gaseous hydrogen. The transport volume per trip can be increased about tenfold, making it advantageous for storing and transporting large quantities of hydrogen. A tube trailer transporting gaseous hydrogen can store 200-300 kg of hydrogen gas, whereas a liquefied hydrogen tank can hold about 3 tons.

Gaseous hydrogen is compressed to 200 bar pressure and transported by tube trailer, then compressed again to 900 bar at hydrogen refueling stations to fill hydrogen vehicles. In contrast, liquefied hydrogen is transported at near atmospheric pressure (2 bar), making it safer. Also, since it vaporizes at the refueling station and is compressed directly to 900 bar, it is more efficient and consumes less electricity than conventional gaseous hydrogen.

With these advantages in transport, storage, and refueling, liquefied hydrogen was expected to expand its use as we enter the hydrogen mobility era. Energy companies have also jumped into the liquefied hydrogen plant business one after another. However, commercial operation has been delayed due to demand not meeting expectations.

SK E&S's liquefied hydrogen plant, completed in Incheon this May, is equipped with three liquefaction units capable of producing 30 tons per day and six storage units capable of storing 20 tons. It is the world's largest single-plant facility, capable of producing about 30,000 tons of liquefied hydrogen annually. Thirty thousand tons of liquefied hydrogen can operate about 5,000 hydrogen buses for one year.

SK E&S produces liquefied hydrogen by refining gaseous by-product hydrogen generated within the process of nearby SK Incheon Petrochemicals into high-purity hydrogen. SK E&S imported liquefaction equipment from France's Air Liquide. An SK E&S official said, "Currently, only one liquefaction unit is operating, and production will be expanded as demand increases."

Hi Changwon also introduced liquefaction equipment from Air Liquide and completed its liquefied hydrogen plant on January 31 this year. It was Korea's first liquefied hydrogen plant. With this, Korea became the ninth country in the world to produce liquefied hydrogen, following the United States, Germany, and Japan. Hi Changwon is a special purpose company (SPC) with 50% equity held by the Korea Industrial Complex Corporation, 30% by Changwon Industry Promotion Agency, and 20% by Doosan Enerbility. Doosan Enerbility is responsible for operation and maintenance (E&M). The Hi Changwon liquefied hydrogen plant can produce 5 tons per day and up to 1,800 tons annually.

Despite being the 'first in the country,' the Hi Changwon liquefied hydrogen plant's commercial operation plans have been repeatedly postponed. The plant faces not only a lack of demand but also political issues. The Changwon City Council formed a special administrative investigation committee to examine the legality and feasibility of the liquefied hydrogen plant project during the tenure of former Mayor Heo Seong-moo (currently a Democratic Party member of the National Assembly for Changwon Seongsan). The committee currently consists only of members from the People Power Party and plans to conclude its activities by the 20th. Hi Changwon expects to start commercial operations in January next year once the city council's investigation is completed.

Hyosung Group, which had been operating hydrogen refueling stations, also entered the liquefied hydrogen plant business. Hyosung Heavy Industries established a joint venture, Linde Hydrogen Energy, with Germany's Linde in a 49:51 ratio in 2021 and began building a liquefied hydrogen plant. Linde Hydrogen Energy's liquefied hydrogen plant is located in the Ulsan Yongyeon Industrial Complex and is currently in test operation. Linde Hydrogen Energy originally planned to complete construction and start commercial operation in the third quarter of this year but postponed it to the fourth quarter. However, even this is uncertain. A Hyosung official said, "Even if we produce liquefied hydrogen, there are not many refueling stations to distribute it. We plan to decide the completion and commercial operation timing while monitoring market demand." Hyosung Heavy Industries' liquefied hydrogen plant has an annual capacity of 13,000 tons. Hyosung plans to expand production capacity to 39,000 tons in the future.

Although liquefied hydrogen plants are being built one after another, the supply of hydrogen vehicles, the main demand source, is not increasing easily. According to market research firm SNE Research, the total sales of hydrogen fuel cell vehicles registered worldwide from January to September this year decreased by 17.4% year-on-year to 9,946 units. In Korea, due to the sluggish sales of Hyundai Motor's Nexo, sales fell 25.8% year-on-year to 2,978 units.

"Safety standards must be established promptly"

Currently, all businesses related to liquefied hydrogen production, storage, transport, refueling, and equipment are operating under regulatory sandboxes. Since there are no safety standards for liquefied hydrogen under the High-Pressure Gas Safety Control Act, businesses can only operate through special exemption procedures. This acts as a constraint on expanding liquefied hydrogen demand.

Companies producing liquefied hydrogen storage tanks and equipment are struggling to find demand even after manufacturing related products. An executive at Hylium, which developed a liquefied hydrogen drone, said, "It takes more than three months just to apply for and receive approval for the regulatory sandbox to use liquefied hydrogen. As a result, no one is stepping forward to use liquefied hydrogen immediately."

Because the liquefied hydrogen market has not formed, few companies are stepping forward to develop related equipment. Most of the core equipment for liquefied hydrogen plants and refueling stations still rely on imports.

Liquefied hydrogen safety standards are expected to be established in the first half of next year. The Ministry of Trade, Industry and Energy prepared 27 temporary safety standards related to liquefied hydrogen in January 2022 and applied them to the regulatory sandbox. The ministry explained that since few countries worldwide have commercialized liquefied hydrogen, sufficient verification procedures for safety were necessary.

An official from the ministry said, "Based on demonstration data secured at refueling stations, we plan to add safety standards related to liquefied hydrogen to the enforcement regulations of the High-Pressure Gas Safety Control Act. We expect to revise the enforcement regulations through procedures such as regulatory review by the Office for Government Policy Coordination and the Ministry of Government Legislation by the first half of next year."