Impact of policy on the adoption and development of hydrogen fuel cell vehicles

Abstract

The transport sector accounts for the largest share of global carbon emissions—almost 25% of the aggregate total. As battery electric vehicles are being adopted quickly, it raises the demand for materials central to the production of the batteries, but hydrogen technology has been put forward as an alternative solution with the potential to reduce the carbon footprint of transportation. Its broader adoption encounters serious technical and policy hurdles. This study seeks to critically assess the effectiveness of various policies in stimulating market demand for hydrogen fuel cell vehicles (HFCVs). Through a combination of quantitative and qualitative methods, the research provides a comprehensive evaluation of how effectively these policies are meeting their intended goals. Results show that government direct investment in hydrogen refueling infrastructure, as with South Korea and Germany, improves significantly over the U.S. approach that depended on private investments from tax incentives. Additionally, sustained and focused investment in hydrogen research and development (R&D), particularly in South Korea via partnership with automaker Hyundai, has led to significant advancements in HFCV production. This approach has proven more effective than the broader, less targeted hydrogen R&D programs in the U.S. Moreover, direct government subsidies, which significantly reduce the cost of HFCVs, have made these vehicles more competitive with BEVs in South Korea, surpassing the effectiveness of tax incentives and rebates in the U.S. and Germany.