The clean hydrogen policy, focused on green/blue, is facing practical limitations due to high costs and infrastructure constraints, leading to a contraction in private investment.

For the hydrogen economy to be successfully established, it must transition to a technology-neutral system and a market structure focused on private sector and utilization companies. Turquoise hydrogen aligns with this paradigm.

• Turquoise hydrogen is emerging as a technology that is less dependent on renewable energy and CCS (Carbon Capture and Storage) and is easily integrated with existing industrial infrastructure, enabling the creation of a customized clean hydrogen ecosystem tailored to various industries.

Specifically, turquoise hydrogen is gaining attention as a realistic alternative due to its strengths in five key areas: (1) Environmental Impact, (2) Utilization Economics, (3) Preventing Industrial Hollowing-out, (4) Synergy with LNG Utilization, and (5) Solid Carbon Utilization.

• 1. Environmental Impact: Turquoise hydrogen emits solid carbon instead of CO2 during the production phase, resulting in no direct emissions. Indirect emissions are anticipated to gradually decrease through technological advancements and the expansion of eco-friendly power generation.

• 2. Utilization Economics: It is as economical as green and blue hydrogen in the utilization phase. Furthermore, the valorization of solid carbon generates additional value, enabling hydrogen production with a potential economic advantage.

• 3. Preventing Industrial Hollowing-out: Production is possible near industrial complexes without the need for large-scale renewable energy sites. This allows for flexible responses to the intermittency of Green Hydrogen and helps curb the overseas relocation of manufacturing industries.

• 4. Synergy with LNG Utilization: As industry and the power sector expand their hydrogen demand, utilizing some existing LNG volumes for turquoise hydrogen production can help maintain the existing LNG long-term contract structure and economic viability.

• 5. Solid Carbon Utilization: Solid carbon contributes not only to general-purpose industries like power generation and construction but also to the development of future high value-added material industries, such as graphene, CNT (Carbon Nanotubes), and carbon fiber.

The global policy trend is shifting from a 'preference for specific technology' to a focus on 'carbon reduction effect'. Turquoise hydrogen is being viewed as a technology that aligns with this shift, leading to its growing international recognition and support.

• The U.S. IRA 45V and Article 3, Clause 6 of Japan's "Basic Hydrogen Strategy" recognize methane pyrolysis-based turquoise hydrogen as clean hydrogen. The EU is also planning to include it in the low-carbon hydrogen category within the draft delegated act.

• While countries define and support clean and low-carbon hydrogen based on CO2 emission standards, support programs for decarbonization projects applying new technologies (First of a Kind) are also expanding, regardless of official certification status.

Turquoise hydrogen currently sits at TRL (Technology Readiness Level) 4-8, indicating significant potential for technological improvement. Therefore, now is the opportune moment for designation as a National Strategic Technology and early investment, as technology leadership is currently a vacuum.

• Under current technology levels and national power grid structures, achieving clean hydrogen certification is challenging.

• However, if the share of eco-friendly generation in the national power grid is expanded by 2030 and national technology goals are set for low-energy catalyst technology and the commercialization of high-value solid carbon, turquoise hydrogen is expected to grow into a core pillar of the clean hydrogen ecosystem, rather than just a bridge technology for green hydrogen.