Causes of increased hydrogen production, purchase, and transportation costs due to energy price fluctuations
Existing 8,800 won/kg → 9,900 won/kg Self-charging 9,400 won/kg, 12.5% ↑

Hydrogen Energy Network Co., Ltd. (hereinafter referred to as HyNet) announced that it will sell hydrogen at KRW 9,900 per kg, a 12.5% increase from the previous price, due to rising costs such as international oil prices and transportation costs despite continuous efforts to stabilize prices.

Hynet announced that it will raise the hydrogen sales price to KRW 9,900/kg (self-charging KRW 9,400/kg) as of December 15 to reflect the increase in cost due to fluctuations in international energy prices.

This price adjustment is the first since Hynet began selling hydrogen in August 2020, and is due to the sharp increase in the cost of hydrogen production and purchase due to factors such as rising energy prices caused by the ongoing Russia-Ukraine war and rising exchange rates caused by instability in the international financial market, as well as the increase in hydrogen transportation costs due to the cargo solidarity strike in June 2022.

The factors determining the hydrogen sales price are linked to international oil prices and exchange rates, raw material prices such as LPG, LNG, naphtha, and diesel, and transportation costs.

Looking at the energy price situation in November 2022 compared to October 2019 when the current hydrogen sales price (KRW 8,800/kg) was determined, △Oil prices increased by 61.0%, △Exchange rate increased by 22.2%, and △Naphtha, a raw material, increased by 22.2%.△LNG increased by 29.4% △LPG increased by 132.3% △Diesel increased by 32.9% △Gas oil increased by 36.5%.

In addition, the cost of hydrogen transportation, which accounts for a significant portion of hydrogen distribution, has also increased, with an average transportation cost increase of 25.1% for charging stations located 25 km to 150 km away from Hynet's Dangjin Distribution Center.

According to the results of the Ministry of Environment's fuel subsidy support project for the first half of 2022, more than 90% of the 128 hydrogen charging stations nationwide (excluding research charging stations, etc., 207 hydrogen charging machines) are operating at a loss.

This is believed to be due to the recent surge in hydrogen purchase costs, and the gap between hydrogen purchase and sales costs is narrowing due to rising international energy prices and increased transportation costs.

HyNet has been leading the expansion of stable hydrogen charging infrastructure in Korea and has continuously worked to form a consensus with the government and related organizations on stabilizing hydrogen prices and establishing measures related to hydrogen supply and demand so that hydrogen charging-related businesses can smoothly expand under the private sector in the future.

On November 9, Hynet held a meeting with hydrogen electric vehicle users to listen to consumers’ opinions and conduct preliminary opinion collection work for adjusting hydrogen charging rates.

Hynet announced on the 14th that it plans to sell starting December 15 at 9,900 won/kg (self-charging 9,400 won/kg), a 12.5% increase from the existing 8,800 won/kg, by minimizing the increase in price by taking into account various review factors derived from consultations with relevant organizations and hydrogen consumer meetings, long-term policy judgments, and the positions of consumers who use eco-friendly vehicles.

HyNet plans to build and expand more than 100 hydrogen charging stations by 2024 and build a future comprehensive energy station at the War Memorial of Korea in Yongsan in the first half of 2023.

Also, cost reduction measures through self-charging pilot project at hydrogen charging stations We plan to continuously promote the use of Mosok, Blue Members payment, etc. to expand consumer convenience and fulfill our role as a leading domestic hydrogen platform company.