Australia to export hydrogen by 2030 in $5 billion plan – BNN Bloomberg

(Bloomberg) — Australia, one of the world’s largest exporters of natural gas, expects to start shipping green hydrogen overseas this decade, seeking to spur slow progress in global trade in the low-carbon fuel.

Government incentives of about A$8 billion ($5.4 billion) over the next decade are expected to unlock A$50 billion in private investment, according to the updated National Hydrogen Strategy released on Friday. This would allow for annual production of at least 500,000 tonnes of hydrogen generated from renewable energy and a minimum export of 200,000 tonnes by 2030.

Australia is pushing ahead with green hydrogen production — seen as key to reducing emissions in energy-intensive industries like steelmaking. While its vast open spaces give it a geographic advantage in building the solar farms and wind turbines needed to power electrolyzers, BloombergNEF predicts that the U.S., Europe and China will account for 80% of supplies by 2030.

“Hydrogen will play an important complementary role to electrification, opening up net zero pathways for hard-to-abate industries,” said Energy Minister Chris Bowen. “By using our world-leading renewable energy resources to produce renewable hydrogen, we can deliver new domestic manufacturing opportunities, such as green metals and chemicals, low-carbon liquid fuels and energy exports to our international partners.”

Still, the country has struggled to develop a green hydrogen sector. Billionaire Andrew Forrest — founder of iron ore miner Fortescue Ltd. and one of the fuel’s biggest advocates — in July postponed a production target of 15 million tons per year until 2030, citing high energy prices.

Demand is also falling. Only about 12% of the capacity scheduled to come online by the end of the decade currently has a buyer identified, and only a small percentage of those deals are binding, BNEF said in a May report.

Australia published its first version of its hydrogen strategy in 2019. The updated plan includes four goals for the country’s market, including identifying the most promising demand sectors and building an industry that is cost-competitive.

The government also signed an agreement with Germany that will unlock A$660 million of joint investment in Australian hydrogen projects.

–With assistance from Dan Murtaugh.

(Updates on industry challenges in paragraphs five and six.)