A clean hydrogen industry will drive down emissions, and power job creation.
Hydrogen is a transformative fuel.
It can be used to power vehicles, generate heat and electricity, and serve as a feedstock in industrial applications.
It also allows for the export of renewable and low emissions energy – either as clean hydrogen or a hydrogen derivative, such as clean ammonia.
Australia’s competitive advantages – abundant land and energy resources, extensive carbon storage reservoirs, and excellent reputation as a trusted energy exporter – mean we are well positioned to be a world leading hydrogen producer.
Conservative estimates developed for the National Hydrogen Strategy indicate a domestic industry could generate over 8,000 jobs and $11 billion a year in GDP by 2050.
Setting the stretch goal
At $2 per kilogram, clean hydrogen becomes competitive in applications such as producing ammonia, as a transport fuel and for firming electricity.
Achieving ‘H₂ under 2’ at the site of production will be a key step in unlocking hydrogen industry growth.
To achieve this stretch goal, industry will need to scale up quickly and cost effectively while reducing input and capital costs.
Clean hydrogen from off-grid gas with CCS, and coal gasification with CCS might be the lowest cost clean production methods in the short-term, although renewable production methods will come down in cost as clean hydrogen demand grows.
Establishing domestic demand for hydrogen will help the industry to scale up and prepare Australia to be a global exporter to emerging international markets.
Using clean hydrogen in heavy vehicles, as industrial feedstocks, blended into gas distribution networks, for export as clean ammonia, and for power generation at remote sites, offer early hydrogen growth opportunities.
For example, cost-effectively deploying hydrogen in remote mine sites could avoid expensive supply of diesel and reduce associated emissions.
The National Hydrogen Strategy sets out the initial actions needed to support this emerging industry.
A range of actions can accelerate industry growth, such as encouraging hydrogen hubs, developing international supply chains, ongoing research and investment in both proven and emerging production technologies, and domestic incentives to create hydrogen demand.
The Government’s new $1.9 billion investment package in new energy technologies includes new commitments that will support hydrogen, including $1.6 billion in new funding for ARENA, a $74.5 million Future Fuels package, and a $70.2 million to activate regional hydrogen export hubs.
This will build on over $500 million committed towards hydrogen projects by the Government at the launch of the National Hydrogen Strategy in 2019.
Establishing hydrogen as a priority technology and working towards this stretch goal will reinforce these commitments and ensure Australia can capture a significant share of the growing global export demand for this technology.