[Law Talk] Hydrogen emerging as feasible solution in Korea’s path to carbon neutrality

There are four important numbers highlighted in the United Nations Emissions Gap Report 2019: 1.5, 25, 56, and 7.6. If the global temperature rises by more than 1.5 degrees Celsius above preindustrial levels, it may threaten the sustainability of Earth. To limit global warming to 1.5 degrees Celsius above preindustrial levels, global emissions in 2030 will need to be 25 gigatons of carbon dioxide equivalent (CO2e). If no further effort is made beyond the current commitments to reduce carbon dioxide emissions, the emissions are on track to reach 56 gigatons of CO2e by 2030. These figures lead to the conclusion that we have to cut carbon dioxide emissions by 7.6 percent every year between 2020 and 2030.

Even without a warning from the UN, as the saying goes, the “era of eco-friendly” has passed and the “era of green survival” has come, carbon neutrality has become a necessity, not a matter of choice. Countries around the world are accelerating their carbon-neutral policies and efforts. In South Korea, on March 25, 2022, the Framework Act on Carbon Neutrality will be enforced. Recently, the Carbon Neutrality Committee has proposed a goal of reducing carbon emissions by 40 percent of 2018 levels by 2030 and reaching net zero by 2050.

As one of the crucial energy sources to achieve carbon neutrality, hydrogen is garnering more attention. Hydrogen is attractive as it can be produced and used without emitting carbon dioxide. Hydrogen has also benefits in terms of energy density and efficiency. Hydrogen can also be fed into a fuel cell that converts its energy into electrical energy. Given the issues facing solar and wind power such as power grid instability associated with daily and seasonal fluctuations in sunlight and wind availability, unfeasibility of large-scale storage and long-range transmission, and massive and expensive infrastructure required, hydrogen is now being considered as a more feasible option to achieve carbon neutrality. As Korea relies on imports for about 93 percent of its energy needs, hydrogen energy which can be produced domestically from renewable energy sources also holds the promise of strengthening national energy security.

It has been pointed out that hydrogen may have issues in economic feasibility due to the lack of infrastructure. However, considerable progress in hydrogen technologies has addressed the issues to the extent that hydrogen is emerging as a best bet for achieving carbon neutrality. There are also voices concerned about the stability of hydrogen, perhaps because of the image of hydrogen bombs. However, this concern is groundless because hydrogen used as hydrogen energy is a different type of hydrogen from deuterium and tritium used in hydrogen bombs. So far, there has been no cases of hydrogen fuel tank explosions caused by hydrogen exposure.

In an effort to lay the foundation for implementing the hydrogen economy and fostering the growth of the hydrogen industry, the Korean government enacted the Hydrogen Economy Promotion and Hydrogen Safety Management Act (“Hydrogen Act”), the world’s first hydrogen law, which took effect on Feb. 5.

The Hydrogen Act defines the term “hydrogen economy” as an “economic and industrial structure in which the production and utilization of hydrogen leads fundamental changes in the nation, society and people’s lives, driving new economic growth and using hydrogen as a major energy source” and the term “hydrogen industry” as “hydrogen-related industries such as production, storage, transportation, charging and sales of hydrogen and manufacturing of fuel cells and products, parts, materials, and equipment used therein.” The Hydrogen Act introduces a wide array of systems (i) to designate hydrogen-specialized companies and grant them support from the government and the Hydrogen Convergence Alliance; (ii) to authorize the government to request installation of hydrogen charging stations and fuel cells; and (iii) to authorize the government to require the reporting of hydrogen sales price offered at hydrogen charging stations.

The implementation of the Hydrogen Act is expected to accelerate the commercialization of a power generation system that combines so-called green hydrogen (i.e., hydrogen produced using renewable energy sources by electrolysis) and hydrogen-fed fuel cells. The energy generated through this system will be of great help to RE100 achievement and ESG management.

Lee Kwang-wook and Helen H. Hwang
Lee Kwang-wook is a partner as well as the head of the New Technology team at Korean law firm Yoon & Yang, with an expertise in the Fourth Industrial Revolution laws including fintech, Internet of Things, Big Data, U-health care, and shared economy. Helen H. Hwang is a US-qualified attorney at Yoon & Yang, with an expertise in the areas of intellectual property, technology, media and telecommunications and corporate law. -- Ed.

By Korea Herald (khnews@heraldcorp.com)