Hydrogen Bus Fuel Costs Becoming Similar to Electric Buses... Fuel Subsidies Increased

Fuel Subsidy for Hydrogen Buses to Increase
from 3,600 KRW to 5,000 KRW per Kilogram

The Ministry of Land, Infrastructure and Transport announced on the 23rd that starting from the 1st of next month, the fuel subsidy for hydrogen buses will be increased from 3,600 KRW to 5,000 KRW per kilogram. It is expected that this reduction in fuel cost burden for bus operators to a level similar to that of electric buses will help expand the adoption of hydrogen buses.

Earlier, the government held a meeting of related ministers last month and decided to promote this measure as part of strengthening the competitiveness of eco-friendly vehicles and secondary batteries. The Ministry of Land, Infrastructure and Transport has been providing fuel subsidies since September 2021, citing national greenhouse gas reduction targets and the expansion of hydrogen bus deployment.

The hydrogen bus fuel subsidy is calculated by comparing recent hydrogen price trends and fuel costs of other buses such as electric, diesel, and CNG. Hydrogen buses have had a higher fuel cost burden for operators compared to electric buses, which have relatively cheaper charging costs, and there have been limitations due to insufficient hydrogen refueling stations and maintenance facilities. This was one of the reasons why bus operators were reluctant to adopt hydrogen buses.

A bus is refueling hydrogen at a hydrogen bus charging station in Seoul. Photo by Yonhap News

The current nationwide average hydrogen selling price is around 10,000 KRW per kilogram. The subsidy, which is currently 3,600 KRW, will be raised to 5,000 KRW. The operator's burden will decrease by about 22%, from 6,400 KRW to 5,000 KRW per kilogram. For city buses that operate approximately 90,000 km annually, fuel costs will decrease from 34 million KRW to 26.5 million KRW. The Ministry explained that this is a level similar to that of electric buses.

Additionally, the Ministry will launch a public fuel subsidy management system service from the 4th of next month, allowing anyone to check the status and payment details of fuel subsidies and report fraudulent claims.

Um Jeong-hee, Director of the Transportation and Logistics Office at the Ministry of Land, Infrastructure and Transport, stated, "To activate the spread of hydrogen buses, it is essential to establish competitiveness in three stages: purchase, operation, and maintenance of hydrogen buses." She added, "We plan to promote the development of long-distance models, alleviate hydrogen fuel cost burdens, expand nationwide hydrogen refueling and maintenance infrastructure, and reduce production costs."