Under pressure: A reality check for Australia’s hydrogen dream
Fever-pitch hype, billions in federal funding and unbridled optimism all suggest that Australia has the potential to develop a lucrative hydrogen industry that will boost the sluggish domestic energy transition, grow export markets, and spark a thriving new industry.
This new thought leadership report, written by The Action Exchange and published by AFRIntelligence and Westpac, asks: Is it time for a reality check?
Key Findings:
Australia has distinct natural advantages that support a domestic and export-focused hydrogen industry. But it is not unique and faces competition from better-funded markets like the US, the Middle East and Europe.
Hydrogen’s success remains unproven and is an evolving technology. A lack of infrastructure and cheaper alternatives for low-emission energy supplies make its future uncertain.
Australia’s hydrogen industry progress is starting to stagnate compared to its global competitors. The Federal Government is updating its hydrogen strategy to determine priority investment areas, but industry remains split on whether domestic use or exports are the best place to focus.
Global demand for green hydrogen is growing, driven in some cases by ambitious government targets. Yet, as an export, price will be the ultimate determinant of Australia’s success. At present, the costs of production and transport far exceed what is needed to make the industry viable, although this is expected to change rapidly.
Green hydrogen has the potential to underpin the decarbonisation of hard-to-abate domestic sectors and could give rise to new industries such as onshore green steelmaking. Yet for other sectors, such as household use and transport, renewables such as wind and solar will continue to be more efficient, making hydrogen’s domestic use case less clear.
Download the full thought leadership report or read The Australian Financial Review’s coverage.
