South Korea is “lagging behind” on green hydrogen production and technology, potentially leaving some of its major industries languishing once the EU’s carbon border adjustment mechanism (CBAM) is introduced in earnest in 2026, a legislator in South Korea’s national assembly warned today (Wednesday).

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Won Wook Lee, a member of parliament from the ruling Democratic Party of Korea, told the H2 Meet conference near Seoul that the country has been a leader in hydrogen — a statement borne out by Seoul’s bullish H2 targets and generous subsidy schemes for the molecule in mobility and the power sector.

“But when it comes to the technology of producing green hydrogen, Korea is lagging behind,” Lee told assembled delegates at the conference, calling for even further state intervention to support H2 development in the country.

South Korea has implemented an ambitious hydrogen programme with the aim of producing a third of its energy needs from clean hydrogen (93% of which should be green) by 2050 — with significant volumes coming from imports.

But so far, it has barely any green hydrogen production, while activity on H2 equipment in the technology sector — typically one of the country’s major international strengths — remain few and far between.

Seoul is currently tendering to subsidise two green hydrogen projects, having already announced two last year. One of those projects is a proposed 2.5MW installation by Hyundai — which purports to be the country’s first — while the other is being developed by fellow conglomerate Hanwha.

But these are tiny compared to the gigawatt-scale projects that will be needed.

Korean companies are getting involved in developing major green hydrogen projects, but these all seem to be in collaboration with non-Korean companies in other countries (see links on the left).

And while US electrolyser manufacturer Plug Power has firmed up a deal with South Korean chaebol SK Group to build a $745m electrolyser and fuel cell gigafactory in the country, few details are available about when or where that facility will be built.

Elchemtech, which claims to be making South Korea’s first proton exchange membrane (PEM) electrolysers and seems to be the country’s largest electrolyser maker, is only able to make around 30MW a year at its factory, the company told Hydrogen Insight today — nowhere near the 1GW-plus factories being built by competitors around the world to achieve economies of scale.

As the South Korean government itself admitted last November — when announcing a new H2 strategy with an aim to become a global hydrogen leader — its policies had been mainly limited to “a selection of areas like hydrogen cars and power generation fuel cells, preventing Korea's hydrogen production, storage and transportation competitiveness from catching up with that of other developed nations”.

And it added: “Korea’s hydrogen ecosystem was chiefly centered around grey hydrogen, which is produced from fossil fuels and therefore insignificant in its greenhouse gas reduction effect.”

But almost all hydrogen available in South Korea, including for vehicles, is still produced from either grey H2 or by-product hydrogen left over from chemical processes such as chlorine and caustic soda production.

Carbon border taxes

Lee also lamented the effect that the introduction of CBAM could have on South Korea’s industrial exporters.

“In 2026, the carbon tax will be applied, and that makes many people wonder about our future,” Lee said. “Can we export our steel to other countries, and what about the petrochemical industries?”

CBAM is due to enter its transition phase in October — which entails reporting only, without the need to pay taxes on embedded emissions — but the full version will enter into force in 2026, and will be gradually ramped up in tandem with the phase-out of free carbon trading allowances to Europe’s industrial polluters.

The introduction of the pioneering mechanism has raised speculation that other nations could follow suit in an effort to protect their own industries.

“The existing Korean industries may find themselves in a very precarious situation, due to this fast-changing international environment,” Lee added. “We need to gather our wisdom to respond to the changes.”

But South Korean steel giant Posco told Hydrogen Insight at the H2 Meet conference that it is not concerned about the CBAM — because the vast majority of the company’s 43 million tonnes of annual crude steel production is consumed in Asia.

Posco is also investing heavily in green hydrogen-based direct-reduced iron (DRI). Mingyu Park, hydrogen business team manager at Posco, also told Hydrogen Insight that ultimately the steel giant intends to have two streams of DRI feeding its decarbonised steel mills in South Korea — converted ironworks at the existing facilities, and hot briquetted iron (HBI) (which is DRI compressed for transport) imported from a new facility in Australia.

The existing ironworks will be converted because South Korea wants to protect its jobs and industries, he said.