Greater incentives and funding to support hydrogen industry development, including more support for decarbonisation projects, is needed to compete with other international jurisdictions, the Australian Hydrogen Council says.
The peak body for the hydrogen industry made the recommendation in policy brief on Wednesday to put Australia in a position to compete with global hydrogen incentives around the world, such as the Inflation Reduction Act in the United States. It also highlights significant measures taken in China, the European Union, India, Canada, and Japan.
The brief follows an agreement by federal and state Energy ministers last Friday to review of the national hydrogen strategy, in part to respond to the IRA.
While a revised hydrogen strategy should be developed that at the very least helps incentivise hydrogen uptake in areas “where Australia has a competitive advantage, such as the production of iron”, the council also says immediate funding support is needed.
The government should begin underwriting demand for “domestic production of critical chemicals and metals that are of strategic and economic importance to Australia, such as iron, alumina, ammonia, urea, methanol and key derivatives” within 12 months, the group said.
The council states that this is similar to support packages available under the Inflation Reduction Act and in Canada.
Former chief scientist Dr Alan Finkel, who led the development of the existing hydrogen strategy, has similarly suggested a revision of the hydrogen strategy focus on value-added hydrogen products.
Immediate support should also include “[increasing and expanding] ARENA funding for trials and demonstrations looking at decarbonisation of the production processes for carbon intensive, trade exposed industries such as aluminium and iron ore refineries”.
AHC chief executive Dr Fiona Simon said the “market urgently requires a signal to show Australia is serious”.
“A renewed focus on job creation, building sovereign manufacturing capabilities and helping heavy industry decarbonise should be a key focus of an updated strategy,” she said.
“We welcome the Government’s commitment last week to review the National Hydrogen Strategy and hope to see a cohesive plan that reduces uncertainty and complexity for investors.
“This cannot be left to chance, or to the whims, complexities, and uncertainties of a nascent market. Governments must be market makers at this stage of the energy transition.”
Joint support packages between Australia and its prospective export partners Japan, South Korea, Germany, and the Netherlands, should also be formed to support hydrogen infrastructure development, the council said.
Explicit valuation and support for the development and commercialisation of new technologies and industries is also recommended, in alignment with the priorities of the Commercialisation Action Plan and the National Reconstruction Fund.
The policy brief cautions against underestimating the need to develop a domestic hydrogen equipment, technology, and services (HETS) sector, adding that there is currently a “lack of regulatory consistency for the import of new technologies, such as electrolysers to Australia”.
Clean Energy Council chief executive Kane Thornton told an industry roundtable on Tuesday that despite Australia’s “vast untapped potential” it is currently at risk of falling behind in the global clean energy arms race and has only “a small window of time” to stake its claim.
“If we want to compete for private investment in a competitive global environment, we need long-term policy settings that incentivise private capital to invest in Australia,” he said.
“The production of green hydrogen and the rollout of renewable energy in the United States is now backed by enormous new incentives. Protecting Australia’s competitiveness will require a strong national response, including incentives for green hydrogen production and renewable energy investment.”
Earlier this week, InnovationAus.com revealed that a green hydrogen and ammonia production hub planned for Newcastle late last year after a feasibility study found it was “not commercially viable”. The hub had received a $41 million grant earlier in the year that has since been returned to the government.
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