Government sinks another 150 million into hydrogen industry

An extra $150 million will be sunk by the federal government into hydrogen industrial hubs that all but guarantees a project in every state and territory across the country.

As the government boosts its environmental credentials ahead of an increasingly tough United Nations climate conference in Glasgow in November, Prime Minister Scott Morrison and Energy Minister Angus Taylor on Monday will announce the additional cash into hydrogen related industries.

Hyundai’s Nexo is the first hydrogen-fuelled vehicle to be certified by the Australian government for use on the road. The federal government is sinking more money into the developing hydrogen industry.

Hydrogen has emerged as a key element of the federal government’s emissions reduction strategy with a stated aim of producing hydrogen at $2 a kilogram. At that price, it is expected hydrogen is competitive with alternative energy sources.

The government has already committed more than $300 million towards four hydrogen hubs that will bring together producers, users and exporters in one location to reduce cost.

The most likely hubs were identified to come from Bell Bay in Tasmania, Darwin, South Australia’s Eyre Peninsula, the Hunter Valley in NSW, Victoria’s La Trobe Valley and the Pilbara region of Western Australia.

These locations have expressed interest in the concept, building on existing infrastructure and resources available in each region.

The extra $150 million will enable the development of two more hubs.

Mr Taylor said the hubs were crucial to the government’s hopes to turn Australia into a major hydrogen production and export country by 2030.

“We are looking to partner with industry, and work with state and territory governments to make
this a reality,” he said.

“Australia has the potential to be a world leader in the production of affordable and clean
hydrogen, and our hydrogen industry could create around 8000 new Australian jobs and
generate over $11 billion a year in GDP by 2050.”

Australia has pledged to reduce its greenhouse gas contribution by at least 26 per cent by 2030, based on 2005 emissions, but has not set a deadline to hit net zero. Most other developed nations have committed to roughly half their emissions by 2030 and to reach net zero by 2050 or earlier.

The government is offering grants of between $500,000 and $3 million towards hydrogen development and design grants. Grants of between $30 million and $70 million will be offered to establish the hubs.

The extra cash for hydrogen was announced after the government launched a campaign to explain its efforts to reduce greenhouse gas emissions.

The “Australia’s Making Positive Energy” campaign includes general media advertising.

Greenhouse gas emissions fell 5 per cent through the first year of the coronavirus pandemic, figures released by the government last month showed, with deep drops in electricity.

Critics argued the fall was due to one-off factors associated with the pandemic, including the shutdown of many industries and work-from-home orders, warning emissions were likely to rebound as the economy recovered.

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Shane Wright â€" Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.Connect via Twitter or email.

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