Australia’s opposition climate and energy minister has hit out at the federal government’s “lack of ambition” in building the nation’s hydrogen industry.
Speaking at an Australian Hydrogen Council event on Friday, Chris Bowen claimed Australia was currently at a crossroads as to whether or not it will fulfil its undoubted potential for hydrogen production.
Claiming the Australian government was continuing to drag its feet on climate change, Bowen said many countries around the world had accepted the need to decarbonise their economies.
“They are finally tackling the scientific and economic barriers to hydrogen – because they now have an existential imperative to do so, and carbon-intensive exporters have a second imperative: to diversify their offerings during the greatest economic transformation since the Industrial Revolution,” Bowen said.
“I’m sorry to say that Australia — or more accurately the Australian government — is yet to accept those imperatives.”
Bowen highlighted the Australian government's tardiness in committing to a net zero emissions target by 2050, which he said placed the nation behind more than 130 other countries.
Bowen also echoed sentiment he claimed was coming from Australia’s hydrogen industry that there was a need for the government to help stimulate demand.
“That demand could — should — start with a credible ambition to reduce our national emissions. It should be backed by plans to decarbonise each existing sector, using hydrogen where that makes sense. And it should be complemented by urgent action to build a new hydrogen export industry,” he said.
“But hydrogen demand simply will not grow as it should while our national government tries to pretend that we can maintain a carbon-intensive economy indefinitely.”
Need for urgency
Australia’s National Hydrogen Strategy, established in 2019, envisages an Australian hydrogen industry worth at least A$11 billion (US$8 billion) per annum and employing 7600 people by 2050.
However, Bowen questioned if the current government was acting urgently enough to achieve that ambition, noting that the upper end estimates of the national strategy envisage a hydrogen industry worth A$15 billion per annum and employing 10,000 people.
“While the government’s budget announcements on hydrogen hubs are very welcome, it is not expected to even announce the location of those hubs until next year,” Bowen stated.
“That’s three years after the importance of hubs was emphasised in the National Strategy. And it’s years behind some competitors, like Europe with its hydrogen ‘valleys’.”
Bowen said Labor had taken a pledge to the 2019 federal election — which it lost — to launch a A$1 billion National Hydrogen Plan, including plans to support a hydrogen hub near an established liquefied natural gas export industry in Gladstone, Queensland.
“Under Labor’s policy, the CEFC [Clean Energy Finance Corporation] would already be investing hundreds of millions of additional dollars in hydrogen,” Bowen added.
Bowen stated that funding to stimulate Australia’s hydrogen industry should not come at the expense of other low-emissions technologies.
He used his speech to attack the government’s recent move to allow the CEFC, as well as the Australian Renewable Energy Agency (Arena), to fund carbon capture and storage projects and, by extension, blue hydrogen.
“They [Arena and the CEFC] don’t have the money, the expertise or frankly the appetite to invest in fossil fuel technologies,” Bowen said.
“It’s a bad fit all round. But this is part of a broader effort by the government to conflate green and blue hydrogen as ‘clean’ hydrogen. I think that does a disservice to both. They’re different technologies, with different commercial propositions as a result.”
Blue hydrogen is produced from natural gas feedstocks, with the carbon dioxide by-product from hydrogen production captured and stored. However, the process is not emissions free.
Green hydrogen is made using electrolysis powered by renewable energy to split water molecules into oxygen and hydrogen, creating an emissions-free fuel.
“It may be, for example, that blue hydrogen plays a stronger role in the short term, and green hydrogen in the medium to long term. In any case, we should be honest, clear-eyed, and evidence-based, not ideological in either direction.”
In response to Bowen’s comments on Friday, the head of the Australian Petroleum Production & Exploration Association (APPEA) cited a recent EnergyQuest report which noted that blue hydrogen offered a greater potential for near-term decarbonisation compared to green hydrogen, with the latter currently more expensive to produce.
“Hydrogen is an immense opportunity for Australia to fast-track its transition to a lower emissions economy but all types of hydrogen should be in the mix when discussing a cleaner energy future,” APPEA chief executive Andrew McConville said.
“Australia’s upstream oil and gas industry is well placed to assist in the development in one of the pathways to a large-scale and innovative commercial hydrogen industry. This is both in using natural gas to produce hydrogen and using gas infrastructure to process and transport hydrogen.”
McConville highlighted the success of Australia’s LNG export industry, claiming that it could build on its technology, expertise, commercial and trade relationships to make Australian hydrogen exports a reality.
“This means Australia is well placed to capitalise on our already abundant natural advantage. Hydrogen is already being produced from Australian LNG exports,” he added.
"Developing a local hydrogen industry could enable lower emissions both in Australia and internationally, reduce energy costs, deliver energy security, together with new employment and manufacturing opportunities.”