Deal comes less than two weeks after French city revealed that H2 buses would be six times more expensive to run than battery-electric ones
The South Korean government is to subsidise the purchase of 624 hydrogen buses that will be in operation in the south of the country by the end of 2025.
The Ministry of Environment and local authorities will each contribute 150m won towards every 630m-won ($530,000) fuel-cell bus, with Korean auto manufacturer Hyundai offering a 10m-won bulk-purchase discount on each unit.
This means that local private bus companies in Busan, Ulsan and Gyeongnam province will only pay 320m won per zero-emission vehicle to replace their existing diesel and compressed natural gas buses.
The subsidies for the project add up to 187.2bn won ($157m) of taxpayer money.
The announcement comes less than two weeks after the French city of Montpellier scrapped long-standing plans to buy 51 hydrogen buses after realising they would cost six times as much to run as battery-electric equivalents.
According to a recent article in the Korea Herald newspaper, a fully electric bus in the country would cost about 400m won ($336,000) without subsidies.
Read the most up to date Fuel Cell and Hydrogen Industry news at FuelCellsWorks