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Price premium for green hydrogen in South Korea: Evidence from a stated preference study

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  • Kim, Ju-Hee
  • Han, Su-Mi
  • Yoo, Seung-Hoon

Abstract

South Korea has been seeking to advance the hydrogen economy since 2019. Currently, gray hydrogen is being used primarily in mobility, but the Government plans to gradually switch to green hydrogen. Data on the public's stated preferences on this has been collected and analyzed with the contingent valuation technique. More specifically, a price premium for consuming 1 kg of green hydrogen over 1 kg of gray hydrogen is estimated when fueling a hydrogen vehicle. In order to gather the data, with a sample size of 1000, face-to-face interviews with household visits, a field survey by a professional survey company, and a closed-ended questioning method were adopted. For the analysis of this data, a one-and-one-half-bound model and a spike model that is capable of handling zero observations were jointly applied. The estimated price premium was statistically significant, reaching KRW 1,990 (USD 1.6) per kg, 22.6% of the fueling price of gray hydrogen KRW 8,800 (USD 6.9). Various implications of these results are discussed. For example, a subsidy of at least USD 2.4 per kg is required, given that the additional cost of producing green hydrogen instead of gray hydrogen is around USD 4.0 per kg.

Suggested Citation

  • Kim, Ju-Hee & Han, Su-Mi & Yoo, Seung-Hoon, 2023. "Price premium for green hydrogen in South Korea: Evidence from a stated preference study," Renewable Energy, Elsevier, vol. 211(C), pages 647-655.
    • Handle: RePEc:eee:renene:v:211:y:2023:i:c:p:647-655
    DOI: 10.1016/j.renene.2023.05.035
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