Korea opens hydrogen power auctions as it pushes factories to swap boilers for heat pumps

South Korea's industrial belt accounts for about 38 percent of the country's greenhouse gas emissions, and more than 70 percent of the energy its factories consume goes into making heat. Cutting those emissions is less a matter of pledges than of capital expenditure: the fossil-fuel boilers that run chemical plants and paper mills have to be replaced, and the replacement technology is not yet fully built at home.

On Oct. 29 the Ministry of Climate, Energy and Environment gathered industry, research institutes and energy specialists at a forum in Seocho District, Seoul, to discuss industrial heat pumps. Unlike the 8-to-20-kilowatt units sold for home heating, industrial heat pumps run at megawatt scale and draw on waste heat and unused sources to supply process heat above 100 degrees Celsius, the steam used for drying, chemical reactions and forming. Climate Minister Kim Sung-hwan said high-temperature heat pump development is essential to reach carbon neutrality and save energy at the same time, and that the ministry would expand research budgets for domestic technology and foster a heat pump manufacturing industry.

The government already supports a 3.5-megawatt demonstration that uses about 38-degree waste heat from a paper mill to produce water above 100 degrees, and is funding work on components for steam above 180 degrees. It said it will use the forum's input to refine a research and development roadmap.

The supply side of that transition opened the next evening. From 7 p.m. on Oct. 30 the ministry began the 2026 hydrogen power auction, offering 500 gigawatt-hours a year of clean hydrogen generation on 15-year contracts and 930 gigawatt-hours a year of general hydrogen on 20-year terms. Clean hydrogen qualifies only if its fuel meets a domestic certification limit of 4 kilograms of CO2 equivalent per kilogram of hydrogen. The ministry said it will pick preferred bidders around December for general hydrogen and around June 2027 for clean hydrogen.

The terms point the same way as the heat pump work. A first evaluation round based only on non-price criteria, and a shift from a 60-40 price-to-non-price weighting to 50-50, put more weight on industrial and economic contribution and on emissions reduction. Coal-ammonia co-firing was excluded from clean hydrogen support this year, in line with the 2040 coal phase-out. The clean hydrogen volume is a sixth of the 3,000 gigawatt-hours offered in 2025, after a June administrative notice and consultations with industry.

The same week, the Ministry of Trade, Industry and Energy marked the 18th Chemical Industry Day on Oct. 30, with 250 people from the petrochemical sector at El Tower in Yangjae, Seoul. It praised the industry for holding supply chains together through the Strait of Hormuz blockade that followed the Middle East war, securing raw materials and keeping plants running amid global oversupply, and cited the Daesan No. 1 and Yeosu No. 1 restructuring projects as tangible results. Lotte Chemical President Lee Young-jun received the Silver Tower Order of Industrial Service Merit; 52 people were honoured in all, the largest such group.

Yang Ki-uk of the industry ministry's industrial and resource security office told the gathering that instability in the Middle East continues and that the restructuring has tasks left before completion, and asked that the wider industrial ecosystem, including local economies and employment, be looked after through the process.

What the week does not settle is who pays for the boilers. The heat pump roadmap is still being drafted, and the clean hydrogen auction has shrunk sharply from last year's volume while its first non-price round is untested.