The Australian government has been urged to set up a A$10 billion (US$7.2 billion) net zero fund as part of a strategy to establish a viable hydrogen industry.

In a white paper released this week, Unlocking Australia’s Hydrogen Industry, the Australian Hydrogen Council (AHC) said the country “urgently” needs a national approach to the nascent industry.

In addition to the initial A$10 billion fund, the council would like to see it topped up with an additional A$1 billion each year to 2030.

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Australia has about 69 gigawatts of proposed green hydrogen projects in the pipeline, placing it well ahead of other countries. However, funding for development appears to be lacking compared with other regions.

Norwegian consultancy Rystad Energy recently claimed Australian government spending in support of green hydrogen has totalled only US$290 million, well behind countries such as Germany and France, which have stumped up about US$10.5 billion and US$9.7 billion, respectively.

Where would the funding go?

Under the AHC proposal, the fund would be managed by a new Net Zero Authority that would combine and extend the functions of the government’s Australian Renewable Energy Agency and Clean Energy Finance Corporation green bank.

“We can expect this kind of public investment will unlock several times its value from the private sector,” the white paper said.

Funding would be decided “in response to planning and market soundings”, with the Net Zero Authority allocating money covering research to commercialisation, as well as grants and finance.

The AHC said priorities for the net zero fund, in regard to hydrogen, should be applications that require clean hydrogen to decarbonise and that are more likely to achieve large scale.

Early hydrogen-related priorities identified by the council include at least A$565 million for trials of heavy vehicles, lighter trucks and buses.

It also called for at least A$1 billion for a “hydrogen readiness programme” for industrial processes that cannot easily be electrified, such as steel, ammonia and aluminium production.

It wants projects that protect or create local jobs and have a detailed plan for skilling and re-skilling to be prioritised.

The white paper also calls for a government body to “develop an evidence-based approach to planning and coordinating the transition to net zero”, which would include the development of hydrogen infrastructure.

This body should be “explicitly tasked with addressing how gas and electricity infrastructure can be co-optimised for delivering lowest-cost hydrogen to end consumers”.

The AHC urged the government to set a target of a 10% mix of hydrogen in national gas networks by 2030.

Under pressure

Australia faces increased pressure to improve its emissions targets. It still lacks a target date to reach net zero emissions, while its 2030 emissions reduction target is only 26% — 28% below 2005 levels.

A poll by the Lowy Institute this year indicated that 78% of Australians support a net zero by 2050 target.

There have been signals from the government that it could be preparing to set such a target ahead of the United Nations COP26 summit in Scotland in November.

However, Prime Minister Scott Morrison is reportedly facing opposition from a number of National Party parliamentarians, with whom his Liberal Party forms a coalition government.

Nationals George Christensen and Matt Canavan have said in recent days that they oppose a net zero emissions target. Resources Minister Keith Pitt, a National MP, has also indicated his opposition.