• Oli Capital

Green hydrogen in Australia - the progresses towards a new industry

Updated: Oct 19, 2021

Australia is part of a global race for nations to position themselves as major players in the “green” hydrogen industry. Industry experts forecast a massive future demand for “green” fuels from multiple sectors, including in co-firing in power generation, the shipping sector, heavy industry such as steel, chemicals and mining, as well as the heavy transport and aviation sectors and for industrial feedstocks and heating. Some commentators predict the “green” hydrogen industry will become a USD2.5 trillion market by 2050.

In a recent report, Standard & Poor’s has commented that it expects clean hydrogen to emerge as a fuel for buses and heavy trucks possibly in the second half of this decade, but for cars it would lose out to batteries which are “significantly more energy-efficient”. S&P has also voiced doubts about the pace that hydrogen would emerge in sectors such as steelmaking, noting that net zero commitments imply the full decarbonisation of hard-to-abate sectors which cannot be easily electrified such as steel, but using hydrogen to do so would be extremely costly. According to S&P, it expects existing end markets for hydrogen such as oil refining, chemicals and later on possibly fertilisers to be among the early adopters of hydrogen. It also sees hydrogen playing an important role beyond 2030 in power generation to provide storage and firm back-up power as the share of electricity generated through renewables increases.

To become a global player, Australia will need to build renewable energy supplies, hydrogen and ammonia production facilities, large scale and import export facilities suitable for bulk hazardous liquids, ports, ships and logistics facilities to get the product to the countries where the demand exists. It will also need to demonstrate that a domestic market exists for hydrogen.


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