The South Korean government is to subsidise the purchase of 624 hydrogen buses that will be in operation in the south of the country by the end of 2025.

The Ministry of Environment and local authorities will each contribute 150m won towards every 630m-won ($530,000) fuel-cell bus, with Korean auto manufacturer Hyundai offering a 10m-won bulk-purchase discount on each unit.

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This means that local private bus companies in Busan, Ulsan and Gyeongnam province will only pay 320m won per zero-emission vehicle to replace their existing diesel and compressed natural gas buses.

The subsidies for the project add up to 187.2bn won ($157m) of taxpayer money.

The announcement comes less than two weeks after the French city of Montpellier scrapped long-standing plans to buy 51 hydrogen buses after realising they would cost six times as much to run as battery-electric equivalents.

According to a recent article in the Korea Herald newspaper, a fully electric bus in the country would cost about 400m won ($336,000) without subsidies.

The announcement by the Korean government does not explain how the hydrogen for the buses will be sourced, or whether it would be green (produced from renewable energy) or grey (derived from unabated coal or natural gas).

To put the size of the hydrogen bus order into context, South Korea only had 15 fuel-cell buses in operation in mid-2020, and there are currently more than 150 operating in Europe, according to fuel-cell company Ballard. Recharge believes the deal for 624 buses will be the world's largest ever order for hydrogen-powered buses.

As part of the plan, single buses will begin operating in pilot projects in each of three aforementioned areas in the first half of this year.

“Through this agreement, the Ministry of Environment is planning to gradually expand the target and scale to other regions by using it as a model example of leading city bus pollution-free leadership,” the ministry said in a statement.

Environment minister Han Jeong-ae added: “This business agreement is a promise to realise the future hydrogen economy in the present.”

The densely populated country is aiming to achieve net-zero emissions by 2050, but because of the limited available land for renewables projects, it is planning for 33% of its energy to come from hydrogen by 2050 — 60% of which will be imported.

It also plans to have 5.3 million fuel-cell electric vehicles on its roads by 2050, powered by at least 2,000 hydrogen filling stations.