Mr Taylor announced $300 million for the Clean Energy Finance Corporation last year and instructed it to invest in new hydrogen energy projects – including those powered by fossil fuels. He also committed $70 million for green hydrogen project development through the Australian Renewable Energy Agency.
The government has committed $70 million to help develop a regional hydrogen export hub and Mr Taylor will tell the hydrogen industry it can become a “global partner of choice” for major fuel importers.
Australia has signed agreements with Japan, Korea, Germany and Singapore to investigate hydrogen supply chains to provide those countries with clean fuel, and the Asian Renewable Energy Hub is developing plans for a whopping 26 gigawatt green hydrogen export project in the Pilbara.
Australia’s trade partners are expected to be in the market for clean fuel like hydrogen. About 70 per cent of Australia’s two-way trade is with countries that have net zero commitments. The US, Japan, Britain and South Korea are aiming to be carbon neutral by 2050, and China by 2060.
But competition for hydrogen exports will be fierce.
In June, Germany announced a $15 billion hydrogen strategy, Saudi Arabia has a $7 billion plan to build the world’s biggest green hydrogen plant, and countries including Japan, South Korea, Canada and the European Union are ploughing billions into the green industries including hydrogen in the wake of the coronavirus.
Hydrogen is a rare element which means it needs to be manufactured. The energy and materials can be provided by either renewable power and water, or coal and gas.
There are three methods to extract hydrogen. One is electrolysis that uses electricity to ‘split’ water, which can be powered by renewables in an emissions-free process and is known as green hydrogen.
Thermochemical reactions drive the other two methods. One uses gas and the other uses coal or gas, and for either to be a clean energy source they require carbon capture and storage to stop the emissions from the fossil fuels entering the atmosphere. These are known as blue hydrogen.
The Morrison government’s low emissions investment roadmap is “technology neutral” which means public funding is available to green and blue hydrogen. For fossil fuel production to be ‘clean’ carbon capture has to be tacked on to capture the emissions.
Proponents of renewable energy and some business leaders have raised concerns that financial support for hydrogen production powered by fossil fuels could artificially prolong the operation of the nation’s ageing fleet of coal-fired power stations, or create demand for gas which would be better directed to wind and solar projects.
Mike is the climate and energy correspondent for The Age and The Sydney Morning Herald.