Following the release of the National Hydrogen Strategy, the Federal Government has announced that it is launching a funding package focused on growing an innovative, safe and competitive hydrogen industry in Australia.
On 21 November 2019, Australia’s Energy Ministers met in Perth for the 22nd Council of Australian Governments (COAG) Energy Council meeting.
At the event, Ministers agreed to the National Hydrogen Strategy, which sets a path for Australia to become a major global player in the hydrogen industry by 2030 through removing market barriers, ensuring regulatory consistency and building international trade partnerships.
The Strategy looks to encourage the creation of ‘hydrogen hubs’ – clusters of large-scale domestic demand that will help to establish the skills and investment needed for Australia to develop a globally competitive hydrogen export industry.
On 23 November 2019, the Australian Government announced that, in addition to the $13.4 million which has already been provided to implement and coordinate the Strategy, it plans to reserve $370 million from existing Clean Energy Finance Corporation (CEFC) and ARENA funding to back new hydrogen projects. These funds will come from within the existing allocations to the CEFC and to ARENA.
The CEFC will commit $300 million of concessional finance through a new Advancing Hydrogen Fund and ARENA will provide $70 million to kick-start electrolyser projects. This package takes the Government’s commitments to the hydrogen industry to over $500 million since 2015.
Minister for Energy and Emissions Reduction, Angus Taylor, said with the Strategy released it was important to give the sector a boost to help Australia realise its potential for hydrogen production. Several scientific and government reports have found that hydrogen produced in Australia could be sold to the world.
“The National Hydrogen Strategy maps out the steps we can take to develop a sustainable and commercial hydrogen industry,” said Minister Taylor.
“The Government is backing that through project investment to promote our outstanding potential as a hydrogen supplier to the world.”
Hydrogen is the most common chemical in the universe. It can be produced as a gas or liquid, or made part of other materials and has a variety of uses such as fuel for transport or heating, a way to store electricity, or a raw material in industrial processes.
Like the rest of the world, the main use of hydrogen in Australia is as a raw material for industrial processes. The Australian Renewable Energy Agency (ARENA) states that renewable hydrogen use in Australia would also help to reduce emissions in high-temperature industries as well as some transport sectors.
Opportunities for Australia from Hydrogen Exports has calculated that global demand for hydrogen exported from Australia could be over three million tonnes each year by 2040, which could be worth up to $10 billion each year to the economy by that time.
Minister for Resources and Northern Australia, Matt Canavan, said Australia was positioned to become a major global player by 2030, having the resources and experience to take advantage of increasing global momentum for clean hydrogen.
“There is potential for thousands of new jobs, many in regional areas, and billions of dollars in economic growth between now and 2050, with key energy export markets such as Japan, South Korea, Singapore and Taiwan taking action to diversify their energy sources,” Minister Canavan said.
“We can help them do just that. Australia is already one of the world’s largest and most reliable and trusted energy suppliers and hydrogen will be one more energy export we can supply to existing and new markets.”
“All levels of government, private industry and the research community will now have the opportunity to help us realise our hydrogen potential and reap rewards for the economy, the community and the environment,” he commented.
Finance Minister, Mathias Cormann, added that while the CEFC is already able to invest in hydrogen technologies, the creation of the Advancing Hydrogen Fund sends a clear signal to the market that the Government is committed to investments in hydrogen projects.
“Significant levels of new investment will be needed to successfully commercialise and scale a global hydrogen industry. We believe Australia is well placed to help contribute to the growth of this emerging industry,” he said.
“In establishing the Advancing Hydrogen Fund, we are creating the appropriate policy and regulatory settings to drive increased investment in hydrogen.”
More information on the National Hydrogen Strategy can be found here.