New plan reveals Australia’s hydrogen dream remains to be alive – Uplaza

Producing hydrogen stays important to Australia’s prosperity by means of the net-zero transition, in accordance with a significant technique that lays a nationwide pathway to turning into a worldwide chief in low-emissions know-how.

The brand new Nationwide Hydrogen Technique, launched at present by Federal Local weather Change and Power Minister Chris Bowen, goals to make sure Australia produces inexperienced hydrogen at a aggressive value. It is also designed to information funding and sign Australia’s daring ambitions for the world.

The doc updates the primary nationwide hydrogen technique, launched in 2019 by then Chief Scientist Alan Finkel. I helped devise that technique in my earlier job as a federal public servant. I used to be additionally a part of a panel convened to advise the federal government on the technique launched at present (though it was as much as the federal government whether or not the recommendation was accepted).

In my opinion, this new model of the hydrogen technique improves on the previous one, and responds to altering circumstances. However a lot stays unclear, together with how the technique interacts with present insurance policies, and whether or not taxpayer cash will probably be used to fund hydrogen tasks doomed to fail.

What’s hydrogen?

Hydrogen is the smallest, lightest and most ample component within the universe. It is often discovered as a gasoline, or bonded to different components.

The component is used to make merchandise reminiscent of fertilizers, explosives and plastics. Sooner or later, it could even be a zero-emissions substitute for fossil fuels in industries reminiscent of metal and chemical manufacturing.

Hydrogen may retailer electrical energy—so it could sooner or later be used to shore up home electrical energy provides, or be transported in liquid kind to nations much less in a position to produce renewable vitality.

Australia at present makes very low volumes of hydrogen utilizing pure gasoline, which produces greenhouse gasoline emissions.

We’re well-placed to provide “green” or zero-emissions hydrogen, by means of a course of powered by renewable vitality which releases hydrogen from water.

However creating a big inexperienced hydrogen trade will not be simple. Right this moment’s technique—led by the federal authorities in collaboration with the states and territories—seeks to discover a path by means of.

Aiming for a brand new goal

The price of producing inexperienced hydrogen is at present larger than what most consumers are keen to pay. The brand new technique seeks to beat this by scaling up manufacturing.

It units manufacturing targets: 500,000 metric tons of inexperienced hydrogen a yr by 2030, and 15 million metric tons a yr by 2050.

The technique additionally units extra bold “stretch targets” of 1.5 million metric tons by 2030 and 30 million metric tons by 2050. Attaining this may require discovering new clients for the hydrogen we produce.

The brand new technique dispenses with a earlier goal set by the Coalition authorities in 2020, to provide hydrogen for lower than $2 a kilogram.

As I’ve written earlier than, that concentrate on didn’t account for the excessive prices of transferring and storing hydrogen, and switching to new know-how that may use it.

Manufacturing and worth targets can each be efficient, if they’re practical. However whether or not these targets are achieved comes all the way down to governments’ coverage decisions.

Time to prioritize

The technique identifies three industries—iron, alumina and ammonia—the place hydrogen might finest be used to construct new export industries. It additionally identifies three areas the place hydrogen reveals promise in chopping emissions: aviation and transport, electrical energy storage and freight vehicles.

These priorities present governments are coming to grips with hydrogen’s limitations, in a technical and financial sense. For instance, in passenger automobiles, hydrogen has misplaced out to electrical automobiles. And utilizing hydrogen to interchange pure gasoline in houses is much costlier than merely going electrical.

What’s not clear is how the brand new priorities will information authorities choices. For instance, will precedence sectors get first dibs on funding or infrastructure help? And can governments cease funding hydrogen tasks as soon as it turns into clear they don’t seem to be aggressive?

With out steering on these and different questions, traders might discover it onerous to determine the place to place their cash.

A nuanced view of exports

The 2019 technique was squarely targeted on exporting liquid hydrogen to potential consumers in Japan and South Korea.

Now, the seemingly huge consumers are in Europe. In truth, Bowen at present introduced Australia and Germany are working in the direction of a A$660 million deal, funded equally by the 2 nations, to ensure European consumers for Australia’s inexperienced hydrogen.

Importantly, nevertheless, hydrogen could be very troublesome and costly to move. As my colleagues and I’ve written, Australia ought to as a substitute give attention to utilizing hydrogen to provide inexperienced iron from iron ore.

The brand new technique treads a tremendous line on the query of exports. It identifies precedence sectors and goals to develop these new industries in Australia. But it surely does not rule out liquid hydrogen exports.

Getting communities on board

The 2019 technique emphasised the necessity for group acceptance of hydrogen applied sciences—significantly in relation to security. Abroad expertise confirmed communities feared the chance of explosions and fires from this unstable gasoline.

Security stays a significant concern within the technique. However the brand new model additionally emphasizes group advantages, reminiscent of jobs and extra numerous regional economies.

Particularly, the doc seeks to make sure correct session with First Nations folks and to handle impacts on water.

Cart earlier than the horse?

This technique interacts with two measures the Albanese authorities introduced in current months: the $2 billion Hydrogen Headstart grants program, and a tax credit score for hydrogen producers.

The credit are solely accessible for ten years, and there is nothing of their design to make sure they assist the precedence sectors. It will be a disgrace in the event that they had been taken up by producers pursuing hydrogen know-how that can by no means work.

Extra broadly, it is not clear whether or not these measures had been calibrated to attain the technique’s manufacturing and export targets. It is also unclear whether or not governments would pull the plug on help for applied sciences that become much less promising than first thought.

The place to subsequent

The hydrogen technique will probably be reviewed once more in 2029. Its success may be measured by looking ahead to the next developments:

• massive hydrogen tasks attracting finance and beginning building
• hydrogen suppliers signing multi-year contracts with customers, probably together with exports
• the constructing of hydrogen storage amenities, and wind and photo voltaic farms to provide electrical energy for hydrogen manufacturing
• commitments and timelines from home heavy trade to interchange fossil fuels with hydrogen.

If these indicators do not emerge within the subsequent decade, Australia may have to regulate its hydrogen technique, and international ambitions, accordingly.

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