Under pressure: Australia's green hydrogen dream

A new thought leadership report, published by AFRIntelligence and Westpac Institutional Bank and written by The Action Exchange, examines Australia’s push to become a green hydrogen superpower. 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.

"We're asking governments to do a pretty difficult thing—to pick some winners and put real dollars into it before we have all the data. There's a capital reallocation piece where we will have winners and losers. It's going to be difficult" - Dr Fiona Simon, CEO, Australian Hydrogen Council

The report features interviews with:

• Flor De La Cruz , principal research analyst, hydrogen and derivatives, Wood Mackenzie
• Alan Finkel, Australia’s chief scientist from 2016 to 2020 and chair of the National Hydrogen Strategy
• Mark Hutchinson, chief executive officer, Fortescue Energy
• Fiona Simon , chief executive officer, Australian Hydrogen Council
• Deger Saygin, industry programme lead, Clean Energy Finance and Investment Mobilisation Programme, OECD - OCDE

Want to know more?

1. Read the full report
2. Read coverage in the The Australian Financial Review
3. Read more about hydrogen at Westpac Institutional Bank
4. Learn more about The Action Exchange's thought leadership capabilities