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| Wed, 10th May 2023 9:52:00 |
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Labor’s hydrogen pledge a ‘great start’ but more needed to become global player, experts say |
Australian Hydrogen Council welcomes $2bn funding but MP Sophie Scamps calls it ‘a drop in the ocean’ compared with US
The Albanese government’s $2bn commitment to nurture a hydrogen industry in Australia has been welcomed by sector experts as a “great start” but one that must be accompanied with a clear strategy for it to have a chance to succeed.
The 2023-24 budget, released on Tuesday, earmarked $7.3m in the coming fiscal year for its “hydrogen headstart”, climbing to $151.2m by 2026-27.
It also allocated $38.2m to a “Guarantee of Origin scheme” to track and verify the carbon emissions of hydrogen and other products made in Australia and support renewable energy certification.
Guy Debelle, a director of Fortescue Future Industries who in February warned of the threat to Australia posed by huge renewable energy subsidies in the US, welcomed the budget commitments as “a great start” on hydrogen, which can be used to power vehicles, generate electricity and power industry.
Debelle said making hydrogen in Australia at about $3/kg – the rough forecast for the outcome of the US subsidies – was “in the vicinity” after the budget.
FFI is considering five hydrogen projects, four of which are in the US or Europe. But Debelle said the government’s pledge was “clearly helpful” for the firm’s plans for a possible hydrogen production site at Gibson Island, near Brisbane.
Chalmers on Wednesday said “hydrogen is a big, big chance for Australia”.
“With the Americans piling in so much cash into grants and subsidies that Canadians to Europeans following suit in one way or another, we’re got to work out what is our slice of the action here,” he told the National Press Club.
When releasing the federal budget on Tuesday evening, Chalmers: “Hydrogen power means Wollongong, Gladstone and Whyalla can make and export everything from renewable energy to green steel.
“Seizing these kinds of industrial and economic opportunities will be the biggest driver and determinant of our future prosperity.”
Australia’s relative abundance of solar and wind energy gives Australia the opportunity to be a renewable energy superpower, economists including Ross Garnaut have argued.
The University of Sydney’s Prof François Aguey-Zinsou, who is also director of the Australian Association for Hydrogen Energy, said “anybody can produce hydrogen – there’s nothing special about Australia”.
Aguey-Zinsou said the nation had “been quite slow in reacting” on hydrogen. While the budget allocation was welcome, “it will take a lot more money for Australia to take a piece of the cake”.
He said as Australia currently has no customers for any locally produced hydrogen, nor a clear view as to prioritising any particular part of the supply chain. Storage and distribution for what is particularly leaky gas would be among the challenges, he said.
Another problem was the absence of a national strategy, with the states competing for investment, Aguey-Zinsou said. States such as New South Wales may be better off working on the testing and manufacturing technology, leaving the large-scale electrolyser plants for South Australia or the country’s north.
Victoria and the commonwealth spent $100m on a venture to produce hydrogen from brown coal in the Latrobe Valley for export to Japan. But as Guardian Australia reported last month, the project may be at risk of failing due to demands for extra subsidies and a lack of willingness from Japanese customers to sign up for long-term deals.
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