South Korea is vying to win the race to create the first hydrogen-powered society. It wants to build three hydrogen-powered cities by 2022 as it positions itself as a leader in the green technology.

The plan will see the cities use hydrogen as the fuel for cooling, heating, electricity and transportation. Consultation on where the three cities will be located is under way.

The test cities will use a hydrogen-powered transportation system, including buses and personal cars. Hydrogen charging stations will be available in bus stations and parking spaces.

Diagram showing a planned hydrogen pipeline running through a city
The hydrogen pilot city plan unveiled by the South Korean Ministry of Land, Infrastructure, Transport and Tourism.
Image: FuelCellsWorks

The strategy is part of a wider vision to power 10% of the country's cities, counties and towns by hydrogen by 2030, growing to 30% by 2040.

This includes drastic increases in the numbers of hydrogen-powered vehicles and charging points in the next three years. The government has earmarked money to subsidize these vehicles and charging infrastructure.

South Korea's push for a hydrogen economy
The Moon Jae-in administration is set to spend around $18 billion dollars on hydrogen car sales and refuelling stations from 2018 to 2022.
Image: Reuters

The fuel of the future?

Countries including Germany, Japan and China are also looking to a future hydrogen society, with a number of Asian car manufacturers including Hyundai, Toyota and Honda sinking resources into creating a range of hydrogen-powered cars.

With fuel cell vehicles – or FCVs – generally offering greater range and faster refueling times than electric vehicles, there is great hope that they will accelerate the transition to cleaner vehicles.

But challenges remain with the technology. Although some FCVs are now on the market, for many the cost remains prohibitive and they have some way to go before they become mainstream.

And while the output from hydrogen-powered cars is certainly clean – they only produce water as a by-product – at the moment they are not necessarily as clean as they may first seem. Producing the hydrogen itself is an energy-intensive process, not necessarily powered by renewable sources.

What's the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combatting climate change, yet in the past five years, the energy transition has stagnated. Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Shaping the Future of Energy initiative is working with projects including the Partnering for Sustainable Energy Innovation, the Future of Electricity, the Global Battery Alliance and Scaling Renewable Energy to encourage and enable innovative energy investments, technologies and solutions.

Is your organisation interested in working with the World Economic Forum? Find out more here.

The other major caveat is hydrogen’s explosive nature, which is still causing safety concerns. Earlier this year an explosion of a hydrogen storage tank at one of South Korea’s government research projects killed two people and injured others.

Storage of the gas requires a lot of infrastructure, and despite government incentives to support development, until hydrogen becomes more widespread private investors can still struggle to turn a profit.

On the road to the first hydrogen society

But none of these challenges are necessarily insurmountable. And as nations around the world look to limit global warming, hydrogen may be key in the fundamental shift required in our energy system.

Graphic showing seven benefits of hydrogen.
Seven key roles hydrogen can play in the clean energy transition, according to McKinsey.
Image: McKinsey & Company

Consultants McKinsey & Company envisage hydrogen transforming our energy and decarbonizing systems in seven key ways. And it is likely that FCVs will pave the way.

Globally governments are investing around $850 million annually in hydrogen, McKinsey’s 2017 report says, but much more investment is still required to reach scale and lower costs.