South Korea’s H2 plans support future platinum demand

South Korea’s strategy to decarbonise its highly industrialised economy relies heavily on using green hydrogen which will result in it becoming a significant platinum demand hub, reaching 300 koz p.a. by 2030, from use in electrolysers to produce green hydrogen (40 koz pa) through to Fuel Cell Electric Vehicles (FCEVs) (230 koz p.a.).

South Korea’s disproportionate reliance on imported fossil fuels for ~85% of its energy consumption, poses security concerns and maintains high carbon intensity in industries such as auto-manufacturing, shipbuilding, and steelmaking. To tackle this, increasing investment—over US$40 billion— is earmarked through public-private partnerships to harness hydrogen (H₂) technologies across the entire value chain. This will result in platinum demand increasing by up to 300 koz p.a. by 2030, due to the manufacturing and installation of platinum containing PEM electrolysers and in fuel cells in South Korean-supported projects both domestically and overseas.

Platinum’s largest demand growth will come from fuel cell production with South Korea targeting up to 1.8 million light-duty (LD) and 30,000 heavy-duty (HD) FCEVs by 2030 (Fig 3). Battery Electric Vehicles (BEVs) are currently the preferred technology route for LD vehicles ahead of FCEV, as recharging infrastructure is already developing. While South Korea’s LD target seems challenging to deliver, the strong market emerging for light-commercial and HD FCEVs, where quick refuelling, high capacity-utilisation-rates, and long-distance travel favour FC technology, should assist. Additionally, stationary power and nascent mobility applications such as marine and off-road are gaining traction. Because fuel cell stacks can be used in LD, HD, and off-road FCEV applications, using single or multiple units, and based on market preference, this provides manufacturers with flexibility to build stack capacity at lower overall risk. This is highlighted by Hyundai’s US$1.1 billion commitment to expand their annual Incheon fuel cell stack production capacity to 123,000 stacks (12 GW). We believe Hyundai’s growth and the entry of other players could lift South Korea’s FCEV stack capacity to 160 GW by 2030, increasing platinum demand to 230 koz p.a.

Figure 1: Over $40Bn has been earmarked to assist in meeting South Korea’s 2019 Hydrogen road map targets

Figure 2: 300 Koz p.a. of Pt demand by 2030 (43% CAGR, 2024 – 2030) by reaching 180 GW FC & PEM-EL capacity

Additionally, platinum containing PEM electrolysers are a key enabler to produce green H2 to decarbonise transport, power generation and industrial applications. South Korea has already issued tender RFPs and set up global project partnerships, including the world’s first H2 power generation contracts which grow from 4 TWh to 13 TWh with an obligated grey to green H2 ratio moving from 6:1 to 1:1 by 2030. This requires 18 GW of electrolyser capacity to meet South Korea’s total green H2 demand of 2.2 Mt by 2030. Assuming only a conservative 30% PEM market share would add 80 koz of annual global demand by 2030. Combined South Korean platinum demand from PEM electrolysers and fuel cells could grow at a CAGR of 43% (2024 – 2030) and exceed 300 koz p.a. by 2030.

Figure 3: The Korean government released the hydrogen road map in 2019 to revolutionise the country's energy system, reduce its heavy reliance on imported fossil fuels and create growth opportunities through hydrogen

Figure 4: 85% of South Korea’s energy is imported fossil fuels creating potential energy security issues and a high carbon intensity for its traditional industries such as auto-manufacturing, shipbuilding and steelmaking

Figure 5: Whilst initially focusing on cost effective grey hydrogen, Korea’s 2030 green H2 target represents 9% of announced global supply as it looks to develop new and decarbonise existing industries

Figure 6: Korean projects, based in areas with some of the lowest future renewable hydrogen production costs, will bring down the cost of operating green steel plants within 10% of conventional met coal operations (EU Parliament)

Figure 7: Low-cost hydrogen access will facilitate increased FCEV demand. Korea targets 850k passenger vehicles on the road and up to 1.8 M including exports by 2030, equating to 160 GW of fuel cell power

Figure 8: Platinum demand from Korean attributed electrolysers, stationary fuel cells and FCEVs can reach 300 koz p.a.

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