South Korea's clean hydrogen plan to keep pace with market development: govt official

South Korea is aligning its clean hydrogen power rollout with global market realities and technology maturity, even as initial projects under earlier auctions are unlikely to materially reduce emissions by 2030, a senior government official told Platts, a part of S&P Global Energy, June 16.

The country will conduct an auction for 500 gigawatt-hours/year of clean hydrogen-based power, alongside 930 GWh of general hydrogen power, with bids expected to open in the second half of the year, excluding coal-ammonia cofiring from the clean hydrogen category.

"The CHPS scheme is expected to be implemented while taking into account global trends in green and clean hydrogen prices," the official from the Hydrogen Economy Planning Division of the Ministry of Climate, Energy and Environment said in replies to an emailed questionnaire.

The official, who could not be named due to the government's policy, said it will also take into account "the commercialization timeline of hydrogen turbines."

South Korea launched the first auction under CHPS in 2024, inviting bids for 6,500 GWh/year of low-carbon hydrogen-based power, but awarded only 750 GWh/year to state-run utility Korea Southern Power for ammonia-coal cofiring.

In 2025, it said a smaller auction of 3,000 GWh/year of low-carbon hydrogen to power will be held, but ended up canceling the plan due to limited participation in the nascent market.

However, even at a reduced scale, the auctions will help evolve the market and refine the system through learnings as the Asia-Pacific region takes early steps for creating a clean fuels market, according to Yu Kashiwagi, principal analyst -- hydrogen at S&P Global Energy Horizons.

"Auction results provide price discovery—what can be procured at what cost—driving cost reductions and informing policy improvements," the analyst said.

Auction details

The opening and closing dates for the bids have not been decided yet, but it is likely to be concluded in H2 2026, according to the official.

"We are now going through a stage of public notice period from June 10 to 30 ... It is likely to happen within the second half of the year, hopefully soon," the official said. The auction price cap will be set just before the bidding deadline.

The grace period for bidders to produce clean hydrogen domestically after 2029 will be decided after the public notice period concludes, following discussions with relevant experts, the official said.

The government's auction aims to create market-based offtake demand for power generators based on price and terms, Kashiwagi said, reflecting the official's views.

"In the early phase, when supply and infrastructure are still developing, they [auctions] prioritize the most feasible end-uses and quality tiers to improve bankability," Kashiwagi added.

Platts assessed the India Renewable Hydrogen Term Contract at $3.26/kg (weekly assessment), up 1.88% from a year ago.

Infrastructure readiness

Regarding infrastructure to support domestic clean hydrogen production, the official said adequacy would depend on which power companies win the auction.

"They can build their own infrastructure from the start and use them, or they can use the ones that are already built," the official said. "Either way, we will be making sure it does not fall short."

Data from the Hydrogen Infrastructure Database by Horizons showed South Korea has about four ammonia cracking units in the design stage, one of the largest being the 133,000 metric tons/year hydrogen equivalent at the KNOC cracker phase 2, which is also situated at an importing port project.

Looking at the big picture, by 2030, it is anticipated that only one coal-ammonia cofiring power plant -- KOSPO -- awarded in the 2024 bidding, will be in commercial operation, the official said.

"As a result, its contribution to carbon emissions reduction is expected to be limited and not significant."