Producing hydrogen stays important to Australia’s prosperity by means of the net-zero transition, based on a serious technique that lays a nationwide pathway to changing into a worldwide chief in low-emissions know-how.
The brand new Nationwide Hydrogen Technique, launched immediately by Federal Local weather Change and Vitality Minister Chris Bowen, goals to make sure Australia produces inexperienced hydrogen at a aggressive value. It is also designed to information funding and sign Australia’s daring ambitions for the world.
The doc updates the primary nationwide hydrogen technique, launched in 2019 by then Chief Scientist Alan Finkel. I helped devise that technique in my earlier job as a federal public servant. I used to be additionally a part of a panel convened to advise the federal government on the technique launched immediately (though it was as much as the federal government whether or not the recommendation was accepted).
For my part, this new model of the hydrogen technique improves on the previous one, and responds to altering circumstances. However a lot stays unclear, together with how the technique interacts with present insurance policies, and whether or not taxpayer cash will probably be used to fund hydrogen initiatives doomed to fail.
What’s hydrogen?
Hydrogen is the smallest, lightest and most considerable factor within the universe. It is often discovered as a gasoline, or bonded to different parts.
The factor is used to make merchandise similar to fertilizers, explosives and plastics. Sooner or later, it could even be a zero-emissions alternative for fossil fuels in industries similar to metal and chemical manufacturing.
Hydrogen may retailer electrical energy—so it could at some point be used to shore up home electrical energy provides, or be transported in liquid kind to nations much less in a position to produce renewable power.
Australia presently makes very low volumes of hydrogen utilizing pure gasoline, which produces greenhouse gasoline emissions.
We’re well-placed to provide “green” or zero-emissions hydrogen, by means of a course of powered by renewable power which releases hydrogen from water.
However creating a big inexperienced hydrogen business will not be simple. Right now’s technique—led by the federal authorities in collaboration with the states and territories—seeks to discover a path by means of.
Aiming for a brand new goal
The price of producing inexperienced hydrogen is presently greater than what most patrons are prepared to pay. The brand new technique seeks to beat this by scaling up manufacturing.
It units manufacturing targets: 500,000 metric tons of inexperienced hydrogen a yr by 2030, and 15 million metric tons a yr by 2050.
The technique additionally units extra bold “stretch targets” of 1.5 million metric tons by 2030 and 30 million metric tons by 2050. Reaching it will require discovering new clients for the hydrogen we produce.
The brand new technique dispenses with a earlier goal set by the Coalition authorities in 2020, to provide hydrogen for lower than $2 a kilogram.
As I’ve written earlier than, that concentrate on didn’t account for the excessive prices of shifting and storing hydrogen, and switching to new know-how that may use it.
Manufacturing and worth targets can each be efficient, if they’re life like. However whether or not these targets are achieved comes all the way down to governments’ coverage selections.
Time to prioritize
The technique identifies three industries—iron, alumina and ammonia—the place hydrogen might finest be used to construct new export industries. It additionally identifies three areas the place hydrogen reveals promise in reducing emissions: aviation and delivery, electrical energy storage and freight vans.
These priorities present governments are coming to grips with hydrogen’s limitations, in a technical and financial sense. For instance, in passenger autos, hydrogen has misplaced out to electrical vehicles. And utilizing hydrogen to switch pure gasoline in houses is way dearer than merely going electrical.
What’s not clear is how the brand new priorities will information authorities choices. For instance, will precedence sectors get first dibs on funding or infrastructure help? And can governments cease funding hydrogen initiatives as soon as it turns into clear they aren’t aggressive?
With out steerage on these and different questions, traders might discover it exhausting to determine the place to place their cash.
A nuanced view of exports
The 2019 technique was squarely targeted on exporting liquid hydrogen to potential patrons in Japan and South Korea.
Now, the doubtless large patrons are in Europe. Actually, Bowen immediately introduced Australia and Germany are working in direction of a A$660 million deal, funded equally by the 2 nations, to ensure European patrons for Australia’s inexperienced hydrogen.
Importantly, nonetheless, hydrogen could be very troublesome and costly to move. As my colleagues and I’ve written, Australia ought to as a substitute give attention to utilizing hydrogen to provide inexperienced iron from iron ore.
The brand new technique treads a superb line on the query of exports. It identifies precedence sectors and goals to develop these new industries in Australia. However it does not rule out liquid hydrogen exports.
Getting communities on board
The 2019 technique emphasised the necessity for group acceptance of hydrogen applied sciences—notably in relation to security. Abroad expertise confirmed communities feared the danger of explosions and fires from this unstable gasoline.
Security stays a significant concern within the technique. However the brand new model additionally emphasizes group advantages, similar to jobs and extra numerous regional economies.
Particularly, the doc seeks to make sure correct session with First Nations folks and to handle impacts on water.
Cart earlier than the horse?
This technique interacts with two measures the Albanese authorities introduced in latest months: the $2 billion Hydrogen Headstart grants program, and a tax credit score for hydrogen producers.
The credit are solely out there for ten years, and there is nothing of their design to make sure they assist the precedence sectors. It might be a disgrace in the event that they had been taken up by producers pursuing hydrogen know-how that can by no means work.
Extra broadly, it is not clear whether or not these measures had been calibrated to attain the technique’s manufacturing and export targets. It is also unclear whether or not governments would pull the plug on help for applied sciences that become much less promising than first thought.
The place to subsequent
The hydrogen technique will probably be reviewed once more in 2029. Its success will be measured by looking forward to the next developments:
- giant hydrogen initiatives attracting finance and beginning development
- hydrogen suppliers signing multi-year contracts with customers, presumably together with exports
- the constructing of hydrogen storage services, and wind and photo voltaic farms to produce electrical energy for hydrogen manufacturing
- commitments and timelines from home heavy business to switch fossil fuels with hydrogen.
If these indicators do not emerge within the subsequent decade, Australia might have to regulate its hydrogen technique, and world ambitions, accordingly.
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