The Federal Government has committed to a review of its National Hydrogen Strategy to ensure Australia remains internationally competitive in the market for the clean energy fuel, writes Greg King-Evans.
The strategy was formed in 2019 and sets a vision for a clean, innovative, safe and competitive Australian hydrogen industry. However, the global hydrogen landscape has changed significantly in the past four years, and the upcoming review aims to reflect this and shape the nation’s strategy to 2030.
The US Government’s Inflation Reduction Act 2022 has had a profound impact on the global renewable energy market as the country forges ahead with colossal investment in clean energy, making the international landscape extremely competitive.
“Globally, competition for hydrogen projects is fierce,” says Dr Fiona Simon, CEO of the Australian Hydrogen Council.
“Significant financial incentives have been announced by various countries, with each jostling for first-mover advantage.
“The international funding and policy approaches announced to date demonstrate governments’ recognition that a profound restructuring of the energy system is required and that this is about maintaining economic prosperity for their nations.
“The energy and industry transition will be materials intensive, as well as capital intensive. It will connect complex systems and require fundamental change, planning and creativity across sector, departmental and political boundaries.”
A recent report from international professional services firm Deloitte outlines that Australia’s global competitiveness on clean energy is declining, and if Australia does not swiftly respond to the Inflation Reduction Act, significant production of hydrogen will unlikely begin until the 2030s, resulting in 65 per cent less hydrogen exports per annum by 2050, compared to before the Act was passed.
“We are already hearing that Australian projects are being deprioritised where there are choices,” says Dr Simon.
“The Inflation Reduction Act means we are now in a race because there is limited land, equipment and people to deliver this energy transition.
“Australia has some vital ingredients, but we will be relying on other nations to support the scale-up of the hydrogen industry.
“We welcome the Federal Government’s commitment to revise the National Hydrogen Strategy to respond to local and global changes since 2019, and provide a plan for the transition.
“We hope to see a strategy that will reconsider the best range and combination of long-term economic mechanisms to develop the hydrogen industry, including grants, debt and underwriting.”
Australia’s existing National Hydrogen Strategy aims to position the nation’s industry as a major global player by 2030 – both in terms of exports and the decarbonisation of domestic industries – including:
- Exploring Australia’s clean hydrogen potential.
- Considering future scenarios with wide-ranging growth possibilities.
- Outlining an adaptive approach that equips Australia to scale up quickly.
- Showcasing from each Australian state and territory.
- Detailing nationally coordinated actions involving governments, industries and communities.