Transport

Furious backlash | Hydrogen fuel prices to be hiked by a third at Hyundai-backed filling stations in South Korea

Angry Nexo customers express buyers’ regret as prices of grey H2 soar to $10.33/kg

A HyNet hydrogen filling station in South Korea.
A HyNet hydrogen filling station in South Korea.Photo: HyNet

The Hyundai and South Korean government-backed company running dozens of hydrogen filling stations in the country is facing a furious backlash from its customers after it announced plans to hike prices by more than a third this month, according to reports.

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Hydrogen Energy Network Co. (HyNet), which operates at least 50 hydrogen filling stations in Korea, has said it will increase prices from around 9,794 won per kg ($7.72/kg) to around 13,112 won/kg ($10.33/kg).

And, as the hydrogen supplied to the government-subsidised HyNet refuelling stations at present is grey, made from unabated fossil gas, it raises questions of why drivers would want to pay so much for a highly polluting product.

According to Hydrogen Insight calculations, an H2-powered Hyundai Nexo would now cost 77% more to run than a similar-sized Hyundai Ioniq 5 battery electric vehicle in South Korea (124 won/km compared to 70 won/km) — while a similar-sized diesel-powered Volkswagen Arteon would cost 98 won per km to run at current pump prices.
The cost hike means that “the economic feasibility of hydrogen vehicles has completely disappeared”, declared Korean auto website Car Guy.
Nevertheless, HyNet's hydrogen prices are still below the pump prices seen in the US and Europe. German customers must pay around €13.85/kg ($15.07/kg) at present, while in California H2 refuelling costs up to $17/kg — down from the reported $26/kg it cost in February.
It is not yet clear why HyNet is racking up prices. Korea’s hydrogen filling stations must be manned, leading to high labour costs, while as the H2 must be transported in liquid form, distribution costs are also reported to be high.
The Korean government’s recent decision to raise the regulated wholesale price of fossil gas — from which the grey H2 is made — by 5.3% might also be a factor, although HyNet could just be wanting to increase its margins.
But this is apparently just the latest in a series of hydrogen price rises by HyNet, which customers say have led other H2 filling station operators to increase their prices as well.

The company — which is owned by 11 shareholders including Hyundai, state-affiliated Korea Gas as well as gas giants Air Liquide and electrolyser manufacturer Nel — was charging 8,800 won/kg ($6.94/kg) in April last year, 49% less than the new prices.

Customers descended on HyNet’s website to demand answers, with some expressing buyer’s regret over their purchase of the Hyundai Nexo, the only hydrogen-powered car available in Korea.

“HyNet was the first to raise the price last time,” one customer complained. “Other charging stations have followed suit. It seems to be sucking the blood from about 30,000 Nexo owners. Anyway, I have to drive the car. Isn't it abusing the reality that we have no choice but to use?”

The backlash comes as South Korea’s government attempts to bring about a hydrogen economy, pouring billions of won into subsidies for hydrogen cars and filling stations, as well as co-firing ammonia in coal power stations, international H2 production and the development of six hydrogen “cities”.

“If you are not confident in the development of the hydrogen economy, please remove the phrase cheap hydrogen supply [from your website],” demanded another HyNet customer.

“And whose idea was the phrase promoting the spread of hydrogen-powered vehicles in Korea?” the customer added. “Because of HyNet, there are more and more people who say they will not buy hydrogen cars and people who want to sell hydrogen cars.”

Korea Gas, one of HyNet’s shareholders, also stands accused of supplying contaminated hydrogen to customers from its filling station in Pyongtaek.

HyNet had planned to open 100 filling stations by 2022, and 1,000 by 2050, but it is not clear whether it reached its 2022 goal. The company claims on its website that it opened its 100th filling station at Incheon Airport in 2021, but a HyNet press release dated 2022 suggests the number is closer to 90.

(Copyright)
HyundaiCarsNelSouth Koreafuel-cell vehicles
Published 13 July 2023, 13:23Updated 13 July 2023, 13:30