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South Korea plans Northeast Asia’s largest hydrogen hub

26 February 2021

South Korea is planning to build a hydrogen industry hub in the city of Ulsan that it said will be the largest in Northeast Asia as part of overarching efforts to decarbonize the country's economy by midcentury.

The hydrogen hub, slated for completion in 2022, will be spread across 4.7 square kilometers and comprises three main areas: a hydrogen industry base district focused on producing hydrogen fuel cells; an electrogene auto factory for manufacturing hydrogen-fueled electric vehicle parts and supplies; and a research and development business center.

Ulsan is one of three cities - the other two being Ansan and Wanju - that will provide key infrastructure for the hub.

"The plan for Ulsan is to utilize hydrogen from local petrochemical complexes for buildings, fuel-cell electric vehicle (FCEVs), and ships, amongst others," said Vince Heo, associate director at IHS Markit in Seoul.

Domestic, overseas funding

Funding for the development of the hydrogen hub is expected to come from domestic and international companies as well as through public support. The Ulsan Free Economic Zone Authority expects to attract $500 million from overseas investors by 2030 and aims to attract 5.3 trillion won ($4.8 billion) from domestic companies, according to Heo.

Domestic companies that have indicated a commitment to invest in the hub include Donghee Industry, Hanwha Research Center, Hyosung Corporation, and Lotte Ulsan Development. Linde, Air Liquide, and Bloom Energy are among the international companies involved in the project.

Indicative of growing support for the project, on 4 February UK-based Linde, an industrial firm that specializes in producing, processing, storing, and distributing hydrogen, said it would be teaming up with Hyosung, one of South Korea's largest industrial conglomerates, to build, own, and operate extensive new liquid hydrogen infrastructure in Ulsan.

"This robust hydrogen network will support the country's ambitious decarbonization agenda to achieve net-zero emissions by 2050," Linde said in a statement released on the same day.

Hydrogen roadmap

South Korea unveiled a hydrogen roadmap in 2019 that outlined a goal of producing 6.2 million FCEVs and rolling out at least 1,200 refilling stations by 2040. President Moon Jae-in announced a "Green New Deal" in July 2020 as part of the nation's COVID-19 pandemic recovery plan, which includes investment in and construction of three hydrogen cities by 2022, with a further three such cities to be added by 2025, according to Heo.

"The selected hydrogen cities are expected to provide infrastructure for hydrogen production and shipping that will serve local residents as a primary energy source," Heo said.

In a speech to parliamentarians on 28 October 2020, Moon announced that South Korea would "aim for carbon neutrality by 2050," making the country the third in northeast Asia to pledge a 2050 net-zero target, following commitments by China and Japan. The plan builds upon the existing interim 2030 goal within the Nationally Determined Contributions (NDC) to cut greenhouse gas (GHG) emissions by 24.4% compared with 2017 levels.

"This [2021] is the first year when the Paris Agreement has to be implemented. The government has so far pushed for a low-carbon economic structure. The effort will be expanded, so our 2050 carbon neutrality implementation plan can take shape this year in energy, industry and all other parts of our society," Moon said in a new year address on 11 January.

But reaching net-zero GHG emissions will require a major restructuring of South Korea's energy economy, Heo said. South Korea is the world's 10th-largest emitter of GHGs, with a high reliance on imported fossil fuels. Nearly 85% of the energy required by the country's $1.6 trillion economy is dependent on fossil fuels, all of it imported.

"The country's emissions trading scheme is expected to play a pivotal role in [the] short to medium term in decarbonizing its economy as the scheme covers about 70% of total emissions. But a more concrete roadmap needs to be unveiled by the government in terms of what technology the country plans to promote for meeting its net-zero pledge," he said.

In the hydrogen transition, South Korea has strong positions in FCEVs and stationary fuel cells, law firm Clifford Chance said in a paper released in October 2020.

"The strategy appears to be driven more by the perceived opportunities for economic growth and industrial competitiveness than by climate change objectives. It remains to be seen what concrete steps or plans will be devised for the shift from grey to green hydrogen on the production/supply side," Clifford Chance wrote.

Ambitious targets

The South Korean government has set ambitious targets for hydrogen-powered FCEVs and the widespread, reliable availability of liquid hydrogen will be instrumental to achieving these targets, said B.S. Sung, president of Linde Korea.

"Hydrogen has emerged as a key enabler of the global energy transition to meet the decarbonization goals set out in the Paris Agreement," he said.

Cho Hyun-Joon, chairman of Hyosung Group, described the partnership with Linde as "a cornerstone of the development of South Korea's national hydrogen economy."

The liquid hydrogen facility to be built, owned, and operated by Linde and Hyosung in Ulsan will have a capacity of over 30 tons per day and will be Asia's largest, according to Linde. The facility will be able to process enough hydrogen to fuel 100,000 cars and save up to 130,000 mt of carbon dioxide tailpipe emissions each year. The first phase of the project is expected to be operational in 2023.

Under the partnership, Linde will sell and distribute the liquid hydrogen produced in Ulsan to the growing mobility market in South Korea. This will require the joint venture to build, own, and operate a nationwide network of hydrogen refueling stations, Linde said.

The plants in Ulsan will use Linde's proprietary hydrogen liquefaction technology, currently used to produce approximately half of the world's liquid hydrogen.

Further details on the UIsan hydrogen hub can be found on Ulsan Free Economic Zone Authority's website.

Original reporting by Soo Cheng Bernadette Lee

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