Hydrogen is the buzzword in the energy sector again. Despite being a prevalent topic in market discourse, the actual implementation and progress along the supply chain have fallen short of expectations, leading some industry players to dub Taiwan's current hydrogen energy endeavors as more noise than substance.
A comprehensive analysis of the hydrogen supply chain reveals that Taiwan is grappling with technological constraints in hydrogen production and storage, particularly in the upper and middle segments. Stakeholders point out that the technical complexity and substantial capital required for hydrogen production and storage present formidable challenges. The upstream production of clean hydrogen through technologies such as carbon capture, utilization, and storage (CCUS) incurs considerable technical costs.
In the push for CCUS technology adoption, it is noteworthy that most Taiwanese companies involved belong to traditional industries, such as Taiwan Cement, Asia Cement, and CPC Corporation. These industrial giants are driven not only by the imperative of self-directed carbon reduction but also by their significant financial prowess, enabling them to invest in intricate and high-cost carbon reduction technologies.
Acknowledging Taiwan's rapid strides in the energy sector, industry insiders lament the scarcity of investments in the hydrogen energy market, creating a paradoxical scenario where external enthusiasm surpasses internal commitment. The government's comparatively modest financial injections and a lack of clearly defined policy direction contribute to this industry phenomenon. While many industry players are optimistic about hydrogen energy development, there remains a collective hope for proactive government leadership to drive the sector forward.
In practice, Taiwan's state-owned enterprise CPC Corporation has been diligently working towards establishing the country's inaugural hydrogen refueling station, originally slated for completion by the close of 2023. However, ongoing delays have cast a shadow over the project's timeline, with key equipment arrivals in December 2023. The corporation now aims to synchronize station development with the route planning for hydrogen-powered buses, although an explicit completion timeframe remains elusive.
Beyond the upstream and middle segments, Taiwanese firms place a greater emphasis on hydrogen fuel cell components. Pioneering efforts by companies like Kaori Heat Treatment and Chung-Hsin Electric & Machinery Manufacturing have been noteworthy. However, these companies predominantly direct their focus toward overseas markets, attributing this strategic choice to the nascent state of Taiwan's domestic hydrogen energy industry.
Surveying the broader hydrogen energy industry landscape, most players leverage their existing industry advantages to penetrate the market. Despite an international outlook, the recent revelation by Hotai Motor, Toyota's Taiwan distributor, about the impending launch of the hydrogen fuel cell bus H2 City Gold in 2024 adds renewed vigor to Taiwan's hydrogen energy sector. This development is poised to broaden market applications and stimulate opportunities across the supply chain.
While neighboring Japan and South Korea lead in the application of hydrogen-powered vehicles, Taiwanese companies, albeit providing critical components, grapple with the challenge of securing opportunities and retaining pivotal technologies on home soil. Ongoing observation is imperative to discern whether these firms can seize and sustain business opportunities, contributing to the enduring expansion of the market.
