Deal targets bus-focused hydrogen infrastructure amid policy uncertainty and execution challenges
Sylvan Group, a Singapore-based private equity firm backed by members of South Korea’s Hyundai family, has partnered with SK Innovation to invest about US$300 million to expand a hydrogen mobility business in South Korea. The partnership aims to accelerate the rollout of hydrogen refuelling infrastructure and increase the adoption of hydrogen-powered public transport, according to a statement released on Tuesday.
The capital will be invested through SK Hyverse, a hydrogen mobility platform planning a nationwide rollout of 29 liquefied hydrogen refuelling stations and the deployment of more than 6,000 hydrogen-powered buses by 2029. The stations are designed to be sited near large bus depots to support consistent utilisation and smoother operations.
Why the focus is on buses and depots
Industry observers say the decision to anchor the rollout around bus depots reflects a pragmatic approach to hydrogen mobility. Bus fleets offer predictable routes, high daily utilisation and centralised refuelling needs, making them better suited for hydrogen than private vehicles at the current stage of market development. Capital will be committed in phases as fleet numbers and hub utilisation increase, reducing upfront risk.
Hydrogen-powered buses are also seen as more competitive in heavy-duty and high-usage settings, where battery-electric alternatives can face constraints around charging time and range.
Sylvan’s investment thesis and regional ambitions
Sylvan Group co-founder and chief executive Scott Jeun described the transaction as a buyout-style partnership with SK Innovation, under which both sides will jointly manage and scale the platform.
“For Sylvan Group, this reflects our broader strategy of backing sustainability-driven businesses where operational execution and scale are as critical as capital,” Jeun said. He added that South Korea is one of the most advanced markets globally for hydrogen-powered commercial vehicles, making it a logical starting point before considering expansion into other Asian markets over time.
SK Innovation’s role in the hydrogen value chain
SK Innovation contributes operational know-how across the hydrogen supply chain, from upstream production to liquefaction and end-use deployment. For SK Hyverse, hydrogen will be sourced under long-term contracts from SK Group’s liquefied hydrogen facilities in Incheon, helping ensure reliable supply and more predictable fuel costs.
One of its affiliates, SK E&S, already operates a liquefied hydrogen plant in Incheon with an annual capacity of about 30,000 tonnes, enough to fuel roughly 5,000 buses. As the platform scales beyond that level, additional multi-year offtake agreements and new supply arrangements are expected to be required.
Policy backdrop adds uncertainty
The investment comes at a time of mixed signals for South Korea’s hydrogen sector. The government cancelled its 2025 clean hydrogen power tender, and the 2024 round fell well short of its original targets. Industry participants say this has raised questions around long-term demand visibility and subsidy support, particularly as coal-fired power is set to be phased out by 2040.
While hydrogen mobility benefits from different policy drivers than power generation, analysts note that regulatory consistency will still play a key role in sustaining investor confidence and fleet adoption.
Execution challenges beyond capital
Beyond fuel supply, operating a nationwide network of hydrogen refuelling hubs will require significant operational capabilities. These include station monitoring software, IoT-based safety systems, real-time payment platforms and strong cybersecurity for operational technology.
Agencies such as the Korea Gas Safety Corporation and the Korea Gas Technology Corporation are already issuing related tenders, creating opportunities for technology and infrastructure providers as the hydrogen ecosystem develops.
A measured bet on hydrogen mobility
Taken together, the Sylvan–SK Innovation partnership reflects a cautious but sizeable bet on hydrogen mobility, focused on segments where the technology is most viable today. Success will depend not only on capital deployment, but also on securing long-term supply, navigating policy uncertainty and executing complex infrastructure operations—factors that will determine whether the model can be scaled beyond South Korea to the rest of Asia.
