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| Finance Minister Kim Dong-yeon, second from left, discusses ways to develop a hydrogen ecosystem with a group of industry executives at the head office of Elchemtech, a producer of hydrogen energy generation equipment, in Seoul, Friday. Courtesy of the Ministry of Economy and Finance |
By Park Hyong-ki
Finance Minister Kim Dong-yeon said Friday the government will support hydrogen energy companies to develop a sustainable ecosystem surrounding the use, storage and transportation of the clean and alternative energy.
He added in a meeting with a group of industry executives that the country is "running out of growth fuel" given the downturn of conventional manufacturers such as shipbuilding, automobiles and steel.
The development of a "hydrogen economy" as a new source of growth is desperately needed through the relaxation of rules hindering clean energy research and development.
"We will financially support the industry's research and development of hydrogen energy technology, and make sure we closely consult with the private sector on ways to ease rules," Kim said at the meeting in Seoul.
This comes as Korea is falling behind the race to develop a hydrogen economy, compared to Japan and China, which have clear step-by-step roadmaps that will help push their new energy companies forward.
Korea, on the other hand, hasn't had a policy as precise as that of Japan and China since the former Roh Moo-hyun administration promulgated a clean energy plan for sustainability.
Hyundai Motor, a local auto giant, may have mass produced hydrogen cars ahead of its Japanese competitors, but Japanese automakers such as Toyota have surpassed Korea's capacity, analysts say.
"Japan has been the most active in implementing its hydrogen policy in an effort to boost its energy self-sufficiency," said Lee Jong-min, an analyst at POSCO Research Institute.
"A private-public partnership is important to develop a hydrogen ecosystem."
It remains to be seen how the competition particularly between hydrogen and electric vehicles will unfold going forward, the analyst noted, given both energy sources have their strengths and weaknesses.
Transportation running on electricity is a lot cheaper than vehicles powered by hydrogen. However, electric cars are affected by the supply and demand for lithium-ion batteries.
The cost to develop infrastructure that comes with the production of hydrogen cars is expensive. But they can positively improve the environment as the cars do not emit toxic pollutants such as nitrogen oxides, the researcher noted.
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| Finance Minister Kim Dong-yeon, right, checks out hydrogen energy generation equipment at Elchemtech in Seoul, Friday. Yonhap |
The importance of a hydrogen economy was raised by Jeremy Rifkin, a social theorist, in 2002 amid the deterioration of the environment due to the overuse of fossil fuel.
Interest in the development of hydrogen energy gained momentum after the International Energy Agency said it was "the future" that would soon be an alternative to fossil fuel.
China and Japan's roadmaps include helping their auto industries expand the production of hydrogen cars to 1 million, along with infrastructure, by 2030. The Korean government plans to invest 2.6 trillion won ($2.4 billion) to develop the hydrogen economy. Hyundai Motor Group has a hydrogen technology partnership with Audi.
Finance Minister Kim said energy innovation is crucial for the economy as it cannot rely only on a few industries such as semiconductors for growth.
"This is the golden time for the market to change its structure," Kim said, adding this change will also need to happen in the labor market, which is too rigid.
"The labor market needs to be flexible as we expand the social safety net system."
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