"Virtually a Death Sentence"... Fuel Cell Industry Strongly Protests Administrative Notice on Hydrogen Power Generation Bidding

(Photo from left) Sung-Hwan Kim, Director of J&L Tech, Dong-Yoon Lee, CEO of Enerplate, and Myunggu Kang, member of the People Power Party (Gumi, Gyeongbuk), are holding a press conference at the National Assembly on the 11th. Office of Representative Sohee Kim.

The Ministry of Climate, Energy and Environment issued an administrative notice on June 10 regarding the “Annual Purchase Volume for the Hydrogen Power Generation Bidding Market,” prompting strong backlash from the hydrogen fuel cell industry. According to the government's proposal, the bid volume for general hydrogen using fuel cells will be significantly reduced compared to previous years. As a result, the fuel cell industry has demanded that the existing bid volume be maintained, warning that they could be pushed to the brink of collapse.

At a press conference held at the National Assembly on June 11, Dong Yoon Lee, CEO of Enerplate, expressed concern, stating, “The Ministry of Climate has announced a reduction in the bid volume for the general hydrogen power generation market from the existing 1,300 gigawatt-hours (GWh) to 930 GWh. This is greatly shaking the foundation for the survival of the domestic fuel cell industry ecosystem.”

CEO Lee further stated, “Despite facing a challenging business environment, companies specializing in materials, parts, and equipment have continued to maintain production facilities and skilled personnel, and have invested in the localization of parts, cost reduction, and securing technological competitiveness. In such circumstances, if the market volume is reduced to 930 GWh, it will be difficult for companies to continue production and investment.”

The government conducted annual general hydrogen power generation bids of 1,300 GWh from 2023 to 2025. However, through this year's revision of the notice, the bid volume for 2026 has been reduced to 930 GWh.

General hydrogen power generation uses gray hydrogen or byproduct hydrogen as fuel, which results in greenhouse gas emissions. The government maintains that it needs to reduce the general hydrogen power generation bid volume in order to achieve the Nationally Determined Contribution (NDC) for greenhouse gas reduction.

Additionally, the government has decided not to include the bid volume for 2027 and beyond in the administrative notice, and will instead determine it later after reviewing the upcoming 12th Basic Plan for Electricity Supply and Demand. The Ministry of Climate has decided to determine whether to continue the general hydrogen bidding in three years. The government plans to gather public opinion during the administrative notice period, which lasts until June 30.

Kim Sohee, a member of the People Power Party (center in the photo), is holding a press conference at the National Assembly on the 11th. Photo by Kim Sohee's Office

Because general hydrogen power generation produces electricity using fuel cell systems, a reduction in bid volume could directly lead to contraction of the fuel cell industry. The impact could spread not only to large corporations that manufacture fuel cell systems, but also to numerous small and medium-sized enterprises that supply materials and parts.

CEO Lee warned, “If the market volume decreases, the production volume of materials, parts, and equipment companies will decline. This drop in production leads to a heavier burden of fixed costs and higher manufacturing costs, which in turn creates a vicious cycle of reduced price competitiveness and decreased orders.” He argued that if this situation continues, companies may withdraw from the business or face closure and bankruptcy.

At the press conference, Sung Hwan Kim, Director of J&L Tech, urged, “At least for the next five years, please maintain the current bid volume of 1,300 GWh. This amount is the minimum lifeline for the fledgling domestic fuel cell ecosystem to survive.”

Director Kim expressed concern that, “If, as stated in this administrative notice, the volume is confirmed at 930 GWh, the operating rate of fuel cell manufacturers’ plants will plunge to below 20%, and small partner companies will see their delivery volumes disappear, pushing them to the brink of bankruptcy.”

At the press conference, Sohee Kim, a member of the People Power Party who presided over the event, pointed out, “When converted to facility capacity, 930 GWh is about 125 MWh, which is only slightly more than half the minimum demonstration volume required by the industry. This is an alarmingly insufficient level and, in effect, delivers a death sentence to small but strong enterprises on the verge of extinction in the domestic market.”

Kim Yongtae, a member of the National Assembly and head researcher of the National Assembly Hydrogen Economy Forum, and Kang Myunggu, member for Gumi Eul, also participated in the press conference. Assemblyman Kang stated, “Enerplate is a materials, parts, and equipment company for fuel cells newly established in 2025, based on trust in the government's hydrogen economy policies and the growth potential of the fuel cell market. If companies that have invested in reliance on government policy are the first to suffer damage because of a policy change, who will invest in new industries in the future?”

There has also been criticism regarding the recent appointment of Heung Won Seo, a former senior official from the Ministry of Climate, as full-time vice president of the Hydrogen Fuel Cell Industry Association. Sohee Kim criticized, “This is a petty move to silence the industry. Appointing someone from an environmental administration background, who has little to do with the energy and electricity market, as a parachute executive is unacceptable.”

This content was produced with the assistance of AI translation services.