28 September 2022

Australia is on track to be one of the world’s largest hydrogen suppliers by 2030

As the world moves towards net zero emissions, there is growing demand for green hydrogen as an alternative to fossil fuels – and that spells a tremendous market expansion opportunity for Australia’s renewable energy businesses and for investors.

Already ranked 6th in the world for renewable energy investment and deployment opportunities, Australia has over 70 announced hydrogen projects in the pipeline. More than 90 per cent of production will be green hydrogen, and PwC analysis shows this will require over A$250 billion in investment.

“We see enormous potential in hydrogen, and Australia has all the ingredients needed to become both a major hydrogen producer and a global exporter,” says Australian Prime Minister Anthony Albanese.

Green hydrogen is one of the government’s priority technologies expected to be critical to achieving its emissions reduction goals and positioning Australia as a clean energy superpower.

Global and Australian companies alike are tapping into this potential.

Hydrogen on the periodic table of elements with yellow colouring

Spanish energy giant and green hydrogen leader Iberdrola recently announced a further A$3 billion investment in Australia’s clean energy sector, adding to the A$2 billion already invested. “There is huge global demand from industry for new climate solutions such as green hydrogen, green ammonia and green steel,” says Iberdrola CEO Ignacio Galan. “With abundant natural resources and the skilled energy workforce needed to develop these products at a large scale – as well as established energy trading partners – Australia can quickly lead the way in these new clean economy technologies.”

French-based company ENGIE is also investing heavily in Australia, with plans to build an industrial-scale renewable hydrogen plant in Western Australia. When completed in 2024, the Yuri project will be one of the largest of its kind in the world, marking an important step in Australia’s mission to export green hydrogen to the rest of the world.

Regional Western Australia is also the location for CWP Global’s massive wind-and-solar-to-hydrogen Asian Renewable Energy Hub. In June, UK-based energy giant bp announced it would take a 40.5 per cent stake in the project – demonstrating the potential bp sees for Australia to become a major renewable energy exporter.

CWP is also developing another hydrogen project on the coast of southern Australia. “We are attracting the interest of very large energy and investment players as the pace of transition in the energy sector accelerates,” says CWP Development Director Andrew Dickson. “We have the vision – and we are now securing strategic partners to help us to build these complicated projects, and to commercialise the offtake.”

Fortescue Future Industries has begun constructing a A$1 billion manufacturing plant in northern Australia to make hydrogen electrolysers – a project that is expected to more than double current global production of green hydrogen.

Further south, Australian startup Hysata has recently secured A$42.5 million from Australian and global investors to build a pilot plant for what it says will be the world’s most efficient hydrogen electrolysers. Formed last year with funding support from the government-owned Clean Energy Finance Corporation, Hysata was spun out of the University of Wollongong to commercialise breakthrough Australian hydrogen electrolyser technology. “Green hydrogen is forecast to be a trillion-dollar industry, with the backbone of this industry being the electrolyser,” says Hysata CEO Paul Barrett. “Given the urgency to reach net zero, we are gearing up to scale up as quickly as possible.”

Australia has a strong research base in clean energy, primed for working with industry. National science agency CSIRO has launched a Hydrogen Industry Mission that will see it working with public and private partners on more than 100 clean hydrogen projects around the country. A key aim of the mission is to enable hydrogen to be produced at scale while driving down the cost to under A$2 a kilogram. To this end, A$68 million will be spent over the next five years on the mission collaboration, including A$12 million from the Australian Government.   

Governments at federal, state and territory level are all playing their part to develop Australia’s clean hydrogen industry through funding programs, grants to develop hydrogen hubs in regional Australia and international partnerships to drive investment in Australian-based projects. Among the countries that have announced low emissions technology partnerships with Australia to date are Singapore, Germany, Japan, the UK and South Korea – complemented by bilateral cooperation on hydrogen with the US.

The Australia–UK Free Trade Agreement, due to come into effect in the coming months, will see the two countries working together to accelerate low and zero emissions technologies like green hydrogen. “Green hydrogen is a really important area as part of the clean energy revolution,” said the then UK international trade secretary Anne-Marie Trevelyan during recent FTA talks in Australia. 

According to the Australian Renewable Energy Agency (ARENA), demand for hydrogen exported from Australia could be over three million tonnes by 2040, adding A$10 billion a year to the economy.

Head of ARENA Darren Miller says global interest lies in hydrogen’s potential to solve the emissions reduction challenge across sectors such as industry, transport, manufacturing and electricity production. “No single technology in the clean energy industry has received more attention than green hydrogen in the past few years,” he adds.