National Hydrogen Strategy 2024

2024 National Hydrogen Strategy. Hydrogen is central to the Australian Government’s vision for a Future Made in Australia. It is a vital part of the generational economic opportunity presented to Australia to ensure our future prosperity through the net zero transformation. Australia’s renewable energy resources are the envy of the world, and this transformation is underpinned by clean, cheap renewable power. Along with our mature innovation ecosystem, our experience making large export industries, and our record as a stable and trusted trading partner, we have the elements to be a global hydrogen leader. This revitalised National Hydrogen Strategy is another step towards unlocking Australian hydrogen’s world-class potential. The enthusiasm of investors, businesses, communities and workers for hydrogen in Australia gives increasing confidence that we have what is needed to establish a world leading hydrogen industry with bright opportunities ahead. We can decarbonise new and existing manufacturing industries, like green metals and chemicals. We can set up new, large-scale clean exports. And we can bring safe, secure and well-paid jobs to Australians, especially in our regional powerhouses. They have the people and the skills to make sure the places that have powered Australia’s prosperity for generations continue to do so through the net zero transformation. Investors value clarity and a clear plan. That’s why, in 2022, we legislated Australia’s greenhouse gas emission reduction targets for both the medium and long term. This strategy, which identifies targets and stretch potential for producing and exporting Australian hydrogen, strengthens that clarity. And with the substantial policy and Budget measures delivered by the Australian Government, we have a resounding message to the world: Australia is ready to be a global hydrogen leader. New policies including the Hydrogen Production Tax Incentive and an expanded Hydrogen Headstart program unequivocally position Australia as one of the best places in the world to make green hydrogen. The challenge is now over to our emerging hydrogen industry to seize the moment. I thank industry, investors, unions, universities, and others for their extensive input and support in developing Australia’s 2024 National Hydrogen Strategy. We invite companies, investors, workers, all levels of government and our communities across the country to take up the challenge and be part of this important opportunity. The Hon Chris Bowen MP Minister for Climate Change and Energy 3 What is hydrogen? Electrolysers, which use Approximately 58 kg electricity to split water into of hydrogen is required to hydrogen and oxygen, are a produce 1 tonne of Direct critical technology for producing Reduced Iron low-emission hydrogen Hydrogen is colourless, tasteless, 100,000 tonnes of odourless, non-toxic, hydrogen per year and highly combustible could fuel two green iron production plants Hydrogen is the most abundant Using hydrogen element in the universe instead of On a mass basis 1 kg combusting natural gas avoids of hydrogen contains On Earth it is mostly bound to the equivalent as much energy as 2.4 kg of natural gas, however other elements in molecules such as of 6.2 tonnes of when transported as a gas carbon dioxide in a pipeline, hydrogen is water. When two hydrogen atoms emissions for every tonne of about 8.5 times less dense bind to each other it is referred to as hydrogen than natural gas hydrogen gas or molecular hydrogen 1 tonne of hydrogen can be used to make around 5.6 tonnes of ammonia, 10 tonnes of urea or 28 tonnes of diammonium phosphate (DAP) fertiliser Hydrogen’s energy can be released as heat through 1 kg of hydrogen A hydrogen fuel cell combustion or electricity contains as much car has travelled using hydrogen fuel cell energy as 3.2 kg 1360 km on road technology where the only of petrol using a single fuel by-product is water tank containing 5.65 kg of hydrogen 4 National Hydrogen Strategy Executive summary The 2024 National Hydrogen Strategy Australia already has a globally significant project provides the framework for Australia to pipeline of more than 100 projects announced since 2019. The IEA reports that 20% of all announced become a global hydrogen leader.1 projects globally are in Australia.5 This pipeline is larger than for any other single country. It represents Hydrogen is a critical element of the global energy approximately half of all export oriented projects transition. This transition is well underway. The announced globally. The pipeline is growing yearly. International Energy Agency (IEA) is both authoritative It is currently valued at $225 billion or more.6 The and clear. The high share of global energy held by pipeline is overwhelmingly focused on renewable fossil fuels is expected to decrease by 2030, for the hydrogen production as Australia’s extensive wind and first time in decades. Under commitments already solar resources provide the foundation for producing made, the IEA finds that demand for coal, oil and gas low-cost renewable hydrogen (refer Figure ES-1). falls by 74%, 43% and 42% in volume, respectively, by 2050.2 As countries increase their efforts to meet net However, most projects remain at the feasibilty or zero, these falls will be even larger. engineering stage. Many other countries also have excellent renewable resources. The 2024 National Australia’s renewable energy advantages mean the Hydrogen Strategy is tailored to the development of nation is well-placed for export and manufacturing an Australian industry. It accepts that Australia will opportunities in the energy transformation. For need to actively compete with other nations to be example, the global hydrogen market is forecast to considered a global hydrogen leader. reach US$1.4 trillion in 2050. This includes around US$280 billion of interregional trade.3 Australia must While most renewable hydrogen projects will likely capture the significant economic opportunities that be developed off-grid, on-grid projects will provide a are becoming available. flexible source of electricity demand and like batteries, allow electricity to be stored. Both characteristics Australian hydrogen can be exported as an energy could support Australia’s transition to 82% renewable carrier to countries less able to generate renewable electricity by 2030, and the ongoing decarbonisation of electricity. It can also be exported through the electricity system. In addition, having a domestic low-emissions products that have been manufactured hydrogen industry will limit Australia’s exposure to locally using hydrogen as a chemical or heat input increases in the cost of natural gas and imported to the production of green metals, ammonia and liquid fuels. low-carbon liquid fuels. The emergence of large-scale off-grid renewables Focusing on large-scale export and manufacturing presents a new opportunity for renewable energy industries will help bring down the cost of producing generation project developers. This type of project renewable hydrogen in Australia. It will also support will have the benefits of scale, lower transmission our national emissions reduction goals. Hydrogen will and network connection costs and may not require play a role in decarbonising existing hard-to-abate generation to be firmed prior to supply to a hydrogen sectors such as long-haul transport and aviation. production facility. It could also potentially support power generation. Under the production targets in this strategy, Australian hydrogen could avoid emissions of between 93 and 186 million tonnes of CO2 per year by 2050.4

1 The strategy’s primary focus is on developing renewable hydrogen, though many hydrogen industry development activities (such as responsible safety regulation) are relevant to broader ‘clean hydrogen’ production pathways. The 2019 Strategy defined clean hydrogen as having been produced via electrolysis with renewable energy, or via fossil fuel pathways with substantial carbon capture (greater than 90%). Where hydrogen is created using unabated fossil fuels, this is specified. See also Box 2 regarding hydrogen production pathways.

2 IEA 2023, World Energy Outlook. www.iea.org/reports/world-energy-outlook-2023

3 Deloitte 2023, Green hydrogen: Energizing the path to net zero. www2.deloitte.com/content/dam/Deloitte/at/Documents/presse/at-deloitte-wasserstoffstudie-2023.pdf. Unless otherwise specified, monetary values in the strategy are expressed in Australian dollars.

4 Assuming annual hydrogen production displaces the emissions from natural gas at a rate of 6.2 million tonnes/CO2-e for each 1 million tonnes of hydrogen – 2019 National Hydrogen Strategy.

5 IEA 2023, Global Hydrogen Review. www.iea.org/reports/global-hydrogen-review-2023

6 DISR 2023, Resources and energy major projects 2023. www.industry.gov.au/publications/resources-and-energy-major-projects-2023 Note a revised valuation methodology was used, compared with previous years, that excluded projects that were at an ‘Advanced Feasibility’ stage. The preceding report from 2022 valued the pipeline at $230 to $303 billion. 5 Figure ES.1: Australia’s hydrogen production potential Source: Geoscience Australia.7 Large-scale underground hydrogen storage can Our proximity to Asian and Indo-Pacific markets is an guard against production and demand fluctuations. advantage for new hydrogen-based export industries. Australia’s unique geography presents many options Our trading partners value our proven track record of for exploring this opportunity. It also provides stability and reliability. seasonal storage capability to support our electricity network. This will be important as we transition to a renewables-dominated grid.

7 Geoscience Australia 2023, Australia’s hydrogen production potential. www.ga.gov.au/scientific-topics/energy/resources/hydrogen/australias-hydrogen-production- potential - Current hydrogen projects (shown as colour coded circles on the map) are predominately located in highly prospective ‘red’ regions indicating the alignment of the HEFT modelling with real world data. The map includes salt accumulations and depleted onshore gas, which represent potential locations for geological hydrogen storage. (Geoscience Australia, 2022). 6 National Hydrogen Strategy These widespread development and investment Australia’s 2024 National opportunities will offer new job and business prospects across many regional areas of Australia. Hydrogen Strategy Australia’s renewable hydrogen exports could create The 2024 Strategy vision is for a clean, innovative, tens of thousands of direct and indirect jobs by 2040. safe and competitive hydrogen industry that benefits These exports could also provide opportunities for Australia’s communities and economy, enables our existing workers in declining fossil fuel industries net zero transition, and positions us as a global to transition to new resource and manufacturing hydrogen leader. The strategy identifies 4 objectives. businesses that use hydrogen.8 Australia’s hydrogen The strategy’s objectives are supported by specific industry will also deliver benefits to regional actions, targets, collaboration across governments communities in the form of new infrastructure to and associated enablers that will underpin support the industry to grow. their delivery. Renewable hydrogen is a priority industry in the government’s $22.7 billion Future Made in Australia plan, through which it is the focus of targeted investment and other assistance. This long-term commitment, combined with the actions, targets, milestones and the monitoring and review framework detailed in this strategy, provides the necessary platform to take the next step to develop a successful Australian hydrogen industry. Vision A clean, innovative, safe and competitive hydrogen industry that benefits Australia’s communities and economy, enables our net zero transition, and positions us as a global hydrogen leader Objectives Supply Demand Community Trade, benefit investment and H2 partnerships Australia’s Identify and Communities Establish trade at hydrogen industry support the are aware of scale and leverage is globally most prospective and realise purposeful cost-competitive hydrogen demand the benefits of partnerships (Chapter 2) sectors hydrogen (Chapter 5) (Chapter 3) (Chapter 4)

8 Accenture 2021, Sunshot: Australia’s opportunity to create 395,000 clean jobs. https://assets.nationbuilder.com/climateaction/pages/3147/attachments/ original/1660717384/Clean_exports_detailed_report_vf.pdf?1660717384 7 Objective 1: Supply - Australia’s hydrogen H2 industry is globally cost-competitive Success against this objective The strategy also sets a long-term hydrogen target out to 2050, will see Australia produce consistent with Australia’s net zero emissions target, supported by sufficient volumes of 5-yearly milestones. These structures will help guide infrastructure hydrogen at a price that will planning and provide a long-term signal to investors about the role attract demand from domestic hydrogen will play in the Australian economy. and international buyers. Renewable energy is the biggest component of the hydrogen cost At this early stage, the cost of stack, so reducing the cost of renewables is essential to building viable renewable hydrogen production is Australian hydrogen businesses. Multiple initiatives are now in place high. The industry is nascent and to drive cost reductions, including support for innovation to bring public investment for early movers through the next generation of technologies, and for renewable energy will generate learnings to reduce deployment to deliver economies of scale. the production cost over time. Other actions targeted at hubs and infrastructure, workforce, supply The Australian Government will chains and innovation will also reduce project costs and enable the implement significant production industry to grow. support through the Hydrogen Chapter 2 of this strategy details the target, milestones and actions. Production Tax Incentive and These are summarised below. Hydrogen Headstart programs. These will help drive deployment, build experience in the hydrogen and finance sectors with large- scale projects, and help bridge 2050 production target and milestones the commercial gap. These are Setting 5-yearly production milestones out to 2050 will key strategic investments that provide the trajectory we will need to realise our goal will deliver on this objective and to be a global hydrogen leader, with hydrogen providing ensure Australian hydrogen both a critical component to our domestic decarbonisation projects are globally cost- strategy, and enabling new economic opportunities competitive. to emerge. Australia will target producing at least 15 million tonnes of hydrogen annually, with a stretch potential of 30 million tonnes annually, by 2050. 8 National Hydrogen Strategy Hydrogen Production Tax Incentive The $2 per kilogram Hydrogen Production Tax Incentive will provide time-limited, demand-driven production support to eligible producers of renewable hydrogen through Australia’s tax system, forming the basis of government support to the sector to 2040. Hydrogen Headstart The Hydrogen Headstart program represents an early strategy action to address the current financial gap between the production cost and sale price of renewable hydrogen. It is focussed on industry early-movers with well developed projects. Future Made in Australia Innovation Fund Renewable hydrogen is a National Interest Priority industry under a Future Made in Australia. The Future Made in Australia Innovation Fund will fund deployment of innovative technologies and facilities linked directly to priority industries. Hydrogen Hubs The Australian Government’s existing investment in hydrogen hubs in regional Australia remains an important building block to a large scale hydrogen industry, with expanding linkages to our future clean energy export industries. ARENA support The Australian Renewable Energy Agency (ARENA) will continue to play an important role in funding clean energy technology research, development and deployment (RD&D). ARENA will support improvements in hydrogen technologies and projects and renewable energy generation. Concessional finance Concessional finance through government special investment vehicles, including the Clean Energy Finance Corporation and the National Reconstruction Fund, will continue to play an important role in enabling large scale projects to proceed, prove new commercial models and provide confidence to capital markets. Strengthened approval processes Streamlined and prioritised approvals processes at all levels of government are essential to the development of the clean hydrogen industry and the broader transformation of our economy to meet our 2050 decarbonisation goal. Infrastructure planning Working with states and territories to analyse specific infrastructure needs for the hydrogen industry, as well as regular broad-based assessment at a national level to inform infrastructure prioritisation. Workforce, skills and training Assuring the availability and safety of a suitably trained workforce will be central to the growth of the hydrogen industry. 9 Objective 2: Demand and decarbonisation – Identify and support the most prospective hydrogen demand sectors Hydrogen has many potential Green metals (iron & alumina) applications, but the strategy Global demand for green iron and steel is forecast to grow focuses on the use-cases significantly by 2050. Hydrogen can provide a clean source that are currently most of industrial process heat to the refining of our mineral prospective. These demand resources and enable the export of hydrogen embodied sectors are more likely to green metals, such as iron and alumina. support the hydrogen sector to scale up, contribute to domestic decarbonisation, Ammonia and contribute to our Clean hydrogen is the only viable pathway to economy through large-scale decarbonising current ammonia production, which export. is essential to manufacture fertilisers and explosives. Ammonia also represents a viable means to transport These use-cases align with hydrogen to other countries and will play a role as a fuel priority industries in the Future in a decarbonising maritime industry. Made in Australia agenda and will create new jobs and opportunities for our country. Long haul transport (heavy road, aviation, shipping) Chapter 3 of this strategy details There are good prospects for hydrogen to play a role either the actions supporting this directly or indirectly through the production of low-carbon objective. liquid fuels in the decarbonisation of the long-haul road, aviation and shipping sectors. Power generation & grid support Internationally, Australian hydrogen can support other countries to reduce emissions from their power sectors and achieve energy security goals. Domestically, the ability to produce hydrogen with excess renewable generation and store this energy for use in peak demand also presents an opportunity for hydrogen to support the increased use of renewables in our electricity grids. H2 Safeguard Mechanism The Safeguard Mechanism provides a strong incentive for large industrial companies to decarbonise their operations, including by adopting hydrogen technology. 10 National Hydrogen Strategy Objective 3: Community benefit - Communities are aware of and realise the benefits of hydrogen A hydrogen industry will First Nations benefits sharing provide jobs and economic The expansion of the First Nations Renewable Hydrogen benefits to Australia. It Engagement Fund pilot will enable First Nations can help diversify regional communities that live near projects supported by the economies affected by the Hydrogen Headstart program to access the due diligence global energy transition. and advisory services needed to support their engagement with hydrogen project developers. Governments can play a role in developing workforces and ensuring they are sufficiently Regional jobs & business opportunities mobile to address shifting demand NZEA The Australian Government is establishing a national Net across the country. Best practice Zero Economy Authority to ensure the workers, industries engagement and responsible and communities that have powered Australia for conduct by the businesses will generations can seize the opportunities of Australia’s net ensure that projects gain the social zero transformation. licence required. Governments are also responsible for delivering appropriate infrastructure Australian Energy Infrastructure planning and regulatory Commissioner frameworks for safety and The independent Australian Energy Infrastructure environmental protection. Commissioner will promote best practices for industry and government to adopt in regard to the planning and The clean energy transition operation of projects. provides an opportunity to reset the historic approach large projects have taken to engage Voluntary Industry Code of Conduct with First Nations people. In Best practice engagement with communities that are near addition to direct funding of First new energy projects can underpin mutually beneficial Nations communities to improve outcomes. Setting clear expectations of all parties negotiations, governments can including through a hydrogen industry code of conduct hard-wire the importance of best provides an important foundation for these enduring practice engagement into their relationships. funding programs. In this way, governments can encourage Planning for sustainable water use industry to partner directly with Water is an essential resource for many communities, First Nations communities to particularly in regional Australia. Australian governments develop the industry. will consider principles and actions that will help plan for Chapter 4 details the actions and manage demands for water, including from hydrogen, supporting this objective. in a new National Water Initiative. 11 Objective 4: Trade, Investment and Partnerships - Establish trade at scale and leverage purposeful partnerships Capturing a share of 2030 export target developing international A base export target of 0.2 million tonnes of renewable hydrogen markets represents hydrogen per year with a stretch potential of 1.2 million a significant economic tonnes per year. opportunity for Australia. Setting an early export target provides a strong signal of We are well-placed for this Australia’s intention to continue supplying energy to the opportunity. However, our global market. This matches the ambition of some of our renewable resources alone existing trade partners who already have 2030 hydrogen will not be enough with other targets. countries also possessing solar and wind resources moving to Investment attraction compete for global hydrogen As a large country with a small population, we will continue opportunities. The key to realising to welcome international investment in order to develop significant economic benefit new industries like hydrogen. Austrade and NZEA will play from our hydrogen industry will active roles in attracting this investment. be establishing large-scale and enduring trade relationships. In parallel, strategic international Guarantee of Origin expansion engagement will help ensure The Guarantee of Origin (GO) is an internationally aligned Australia remains competitive in scheme to measure and verify the emissions intensity of the the next phase of global market hydrogen we produce. development. The scheme will be both scalable and expandable, enabling similar verification of products produced from hydrogen Chapter 5 details the targets and including green metals and low carbon liquid fuels. actions supporting this objective. Secure supply chains We will build on our international clean energy bilateral partnerships and multilateral engagement to secure supply chains for our hydrogen industry. International partnerships & co-investment Major international energy companies and investment houses are already participating in Australian hydrogen project development. International partnerships fulfil a range of functions including knowledge sharing, RD&D collaboration, supply chain development and are the precursor to trade arrangements. 12 National Hydrogen Strategy States and territories Collaboration across governments to capture the hydrogen opportunity The 2024 National Hydrogen Regulatory approval improvements Strategy reflects the deep Streamlined state and territory regulatory and planning commitment to developing the approval frameworks will provide certainty to business Australian hydrogen industry at and confidence to communities, as well as complement all levels of government. Environmental Protection and Biodiversity Conservation Act Each of Australia’s states and territories (EPBC Act) process reforms. has ambitious hydrogen initiatives or strategies that leverage local advantages. Safety – best practice regulation All are also actively participating in Nationally consistent best practice regulation for safety projects coordinated nationally. This facilitates both project design and financing decisions includes, for example, providing by investors. All jurisdictions are developing a consistent a nationally consistent regulatory national approach through the production of National Codes environment for hydrogen projects. of Best Practice. Delivering the National Hydrogen Strategy relies on complementary and Complementary funding and planning consistent actions from the states and The states and territories will deliver locally-focused territories. They will play an important hydrogen industry development funding measures that role in planning and developing new complement the support provided by the Australian infrastructure, such as for water; while Government. The states and territories will also incorporate noting the emerging challenges of a growing hydrogen industry needs into their policy planning, changing climate, population growth for example infrastructure planning. and increasing water demand. In many cases, jurisdictional governments are Hubs & precincts also responsible for planning approvals and regulating large projects. All levels States and territories have the regulatory and legislative of government will need to ensure structures in place to establish hubs, zones or precincts that efficiency in assessing projects to ensure provide an advantageous operating environment for new the growth of the hydrogen industry and existing industries to thrive. and broader energy transition. State and territory governments have a particularly Workforce development important role in ensuring the progress Governments will continue to work together to deliver the of projects as they typically have a training necessary to build the hydrogen workforce. At the more direct relationship with individual same time, it will be important for states and territories communities. to enable the mutual recognition of skills, licences, and registrations across jurisdictional boundaries to enable Developing large-scale industrial projects workers to relocate to new centres of activity as they will place considerable demands on emerge. Australian workforces. Ensuring the relevant workforces are available and mobile will enhance the efficiency with which they can be deployed. 13 Underpinned by Regular policy review and broader integration The Australian Government’s Capacity Investment Scheme long-term hydrogen vision Support for renewable energy deployment, such as the is set in the context of Capacity Investment Scheme, will help drive down the cost a much larger national of renewable energy which will in turn drive down the cost of energy transformation. The producing hydrogen. complexity of the transition will require concerted effort, monitoring and adjustment Research, development and innovation over many years. Investments in RD&D through ARENA, CSIRO, Australia’s universities and other bodies will support technology Central to this monitoring and advances and breakthroughs in hydrogen and renewable adjustment will be the continued energy, which will help bring through the next generation of publication of an annual State technologies, including ultra low-cost solar. of Hydrogen report. This report is centred on an assessment Annual reporting and 5-yearly reviews of progress. This assessment will extend to include reporting The Australian Government will expand the monitoring, against the strategy’s targets, and benchmarking and public reporting of industry development milestones as well as other metrics through the annual State of Hydrogen report. of interest to a broader range of A regular planned strategy review every 5 years will provide a stakeholder issues, such as water. significant opportunity to work with states, territories and the A more in-depth review will be industry to review progress and refresh our national strategy. undertaken at 5-yearly intervals, ahead of Australia’s Nationally Sectoral decarbonisation plans Determined Contribution under The 2024 National Hydrogen Strategy has been developed Article 4 of the Paris Agreement with a view to Australia achieving net zero emissions by being updated. 2050. However, specific plans to achieve that target are being separately developed and will incorporate analysis and actions that have contributed to this strategy. Carbon leakage review The current price premium associated with using hydrogen provides some incentive for the import of products with a lower cost but higher emissions intensity. The Australian Government is reviewing additional policy options to address carbon leakage. 14 National Hydrogen Strategy Taking the next step Our collective actions since Australia’s inaugural The production incentives will also ensure Australian

2019 Strategy have focused on the early foundations projects remain competitive in a rapidly evolving for industry growth. But to date we have lacked international policy environment and fill a significant the incentives needed to drive economies of scale gap in Australia’s policy mix. They will help the current and build industry experience. The 2024 National pipeline of projects achieve final investment decision Hydrogen Strategy builds on this early work and leans and unlock the next wave of investment. into the adaptive approach it established to refocus on accelerating growth through supporting development Technologies, markets and the international policy at scale. The strategy sets a growth trajectory through landscape have evolved rapidly in the past 5 years. production targets and milestones and identifies the Australia has many advantages that could be put most prospective hydrogen use cases that will be the to work towards becoming a global hydrogen focus for ongoing policy support. leader, but until now has not had the policy support needed to unlock the hydrogen opportunity and be Hydrogen production incentives represent the competitive globally. The Australian Government centrepiece of Australia’s revitalised strategy. These has responded through this revitalised strategy and will help bridge the commercial gap and enable the the unprecedented support announced through sector to achieve scale by supporting early movers and the 2024-25 Budget. The challenge now is for all building familiarity within the hydrogen and finance elements of our emerging hydrogen industry to sectors with large scale projects. seize the moment. Driven by our focus on priority sectors, international partnerships, and wider policy acions that anchor hydrogen in our net zero plan H2 Increased demand Driven by production incentives for early movers and Driven by innovation H2 investments in the wider enabling and large-scale environment deployment (workforce, supply chains, infrastructure) Falling Economies of scale, hydrogen learning from costs experience Figure ES.2 Policy to drive industry development. 15 Strategy on a Page Vision – A clean, innovative, safe and competitive hydrogen industry that benefits Australia’s communities and economy, enables our net zero transition, and positions us as a global hydrogen leader Objectives Supply H2 Australia’s hydrogen industry is globally cost-competitive 2050 production Hydrogen Hydrogen Future Made in Hydrogen target and Production Tax Headstart Australia Hubs milestones Incentive Innovation Fund ARENA Concessional Strengthened Infrastructure Workforce, skills support finance approval processes planning and training Demand and decarbonisation H2 Identify and support the most prospective hydrogen demand Green metals Ammonia Long haul transport Power Safeguard (iron & alumina) (heavy road, generation & Mechanism sectors aviation, shipping) grid support Community benefit Communities NZEA are aware of and realise the benefits of hydrogen First Nations Regional jobs Australian Energy Voluntary Planning benefits sharing & business Infrastructure Industry Code for sustainable opportunities Commissioner of Conduct water use Trade, investment and partnerships Establish trade at scale and leverage purposeful 2030 export Investment Guarantee of Secure supply International target attraction Origin expansion chains partnerships & partnerships co-investment States and territories Collaboration across governments to capture the hydrogen Regulatory Safety – Complementary Hubs & Workforce approval best practice funding and precincts development opportunity improvements regulation planning Underpinned by Regular policy review and broader integration Lower cost renewables Annual Sectoral Carbon Capacity Research, reporting and decarbonisation leakage Investment development 5-yearly reviews plans review Scheme and innovation 16 National Hydrogen Strategy Australia’s National Strategy supporting opportunities across the nation H2 17 New South Wales New South Wales World-leading policy: $3 billion NSW Hydrogen Strategy (NSW) combines its The NSW Hydrogen Strategy is the state’s plan to become a global natural advantages and hydrogen superpower. Delivering 60 cross-sectoral actions and providing extensive industrial a clear policy pathway to achieve competitive green hydrogen production, infrastructure with including incentives of up to $5/kg. The strategy includes: world-leading incentives to create a clear pathway • $1.5 billion in NSW network charge discounts to cost-competitive • $1 billion in incentives in the NSW Renewable Fuel Scheme hydrogen and projects • $109 million awarded for 3 green hydrogen hubs in the Hunter, Port Kembla, and Moree of global scale. • $25 million for a Hydrogen Centre of Excellence The NSW advantage: ready • $10 million to establish freight refuelling infrastructure. infrastructure and a deep These strategy initiatives are designed to drive innovation, support talent pool industry growth, and contribute to a large-scale hydrogen industry in the state. NSW is a world-leading location for hydrogen industry development and investment. State Further NSW support: from innovation to operation infrastructure includes deep water NSW’s commitment to a sustainable future is underscored by substantial import and export ports, existing investments and resources aimed at advancing hydrogen projects from ammonia production, Australia’s innovative ideas to operational realities. These initiatives represent a largest integrated steelworks and strategic push to position NSW as a leader in clean technology, low carbon three major interstate highways. manufacturing, and renewable energy production, ensuring achievement NSW is Australia’s most populous of our net zero ambitions. Below are the key programs propelling this state with a large, highly skilled vision forward: workforce to enable large scale projects. NSW is leveraging its • Up to $25 million accelerating Clean Tech Innovation in NSW. world-class, abundant renewable energy resources by supporting • Up to $100 million expanding the state’s Low Carbon Product Manufacturing capacity. the development of generation and transmission infrastructure • Up to $150 million to increase local Renewable Manufacturing, including electrolysers. for dedicated Renewable Energy Zones. Additionally, comprehensive Hydrogen regulatory guide and planning resources are available to streamline the development and implementation of hydrogen projects. Find out more about the vision and opportunities for hydrogen in NSW at: www.energy.nsw.gov.au/business-and-industry/ways-get- started-business/hydrogen-nsw 18 National Hydrogen Strategy NSW Hydrogen Hubs initiative The hydrogen hub initiative is a key action under NSW is supporting the development of 3 hydrogen the NSW Hydrogen Strategy, which sets out the hubs to increase the production and availability of NSW Government’s plan to develop a green green hydrogen across the state. The hydrogen hydrogen industry. hubs are foundational projects that will help enable the first phase of the NSW Government’s Hydrogen hubs are regions where producers plan to become a hydrogen superpower in the and users of green hydrogen across industrial, region. So far, $109.3 million has been granted to transport and energy markets are co-located. The 3 hydrogen hub projects: NSW Government is supporting the development of hubs to: • Decarbonizing agriculture with hydrogen: Good Earth Green Hydrogen and Ammonia • unlock a green hydrogen industry and workforce to transform NSW regional (“GEGHA”) - Hiringa, Sundown Project Co – Moree plains ($35.8 million). economies and prepare NSW for the future as global markets decarbonise • Zero emissions hydrogen heavy transport: The Illawarra hydrogen technology hub – BOC • reduce the cost of hydrogen infrastructure development and supply chain costs to make Limited - Cringila ($28.5 million). hydrogen commercially competitive with • Decarbonising industry and manufacturing: The Hunter Valley Hydrogen Hub – Origin existing fuels Future Fuels, Orica – Kooragang Island, • create new jobs, encourage innovation, improve energy security, and provide Newcastle ($45 million). This project is also supported with a $70 million grant under the businesses with more choices to increase Australian Government’s Regional Hydrogen revenue while reducing emissions. Hubs Program. Hydrogen hubs will help NSW shift to a low View onto Kooragang industrial area, Newcastle. carbon economy. This supports NSW’s plan to cut emissions by 70% by 2035 and achieve net zero by 2050. 19 Victoria Victoria is building Hydrogen grants and investments the foundations Breakthrough Victoria for a thriving renewable hydrogen Breakthrough Victoria is an independent investment management economy-ensuring the company established in 2021, to invest and manage the Victorian Government’s landmark $2 billion Breakthrough Victoria Fund. state can capture the benefits of this emerging Over the next 10 years, the fund will invest in five priority sectors: clean energy source. • Clean Economies Victorian Renewable • Advanced Manufacturing Hydrogen Industry • Digital Technologies Development Plan • Agri-food Victoria has many advantages • Health and Life Sciences when it comes to establishing a For more information, visit breakthroughvictoria.com renewable hydrogen economy. These advantages include: Hycel Technology Hub • renewable energy resources Supported by $9 million in Victorian Government funding, Deakin • renewable carbon sources University’s Hycel Technology Hub at Deakin University’s Warrnambool campus will be a regional hub of expertise for researching, testing, • an extensive gas network optimising and scaling technologies that use hydrogen, with a focus on • amanufacturing highly skilled workforce and sector mobility applications and the transport sector. The facility will support training, education and social licence to ready the Australian workforce for • world class education institutions the hydrogen and clean energy jobs of the future. Due to be opened in late 2024, Hycel will be a new 4.5 hectare precinct • sustainable water sources within Deakin University’s Warrnambool campus, co-located with South • nationally significant transport networks and deepwater ports. West TAFE. Its location in South-west Victoria is positioned to support the increasing industry activity in this region by supporting skills, training and technology testing to grow the sector. The Victorian Renewable Hydrogen Renewable Hydrogen Worker Training Centre Industry Development Plan sets out a blueprint for how the The Victorian Government is providing up to $8 million in an open Victorian Government supports competitive selection process for the delivery of a Renewable Hydrogen the growth of this emerging Worker Training Centre. The training centre will promote renewable high potential sector using these hydrogen workforce development to support the skilled workforce needs advantages. It sets out how the of the growing domestic renewable hydrogen industry. This initiative has Victorian Government will drive been boosted by a co-funding commitment of up to $10 million from the the development and establish Australian Government outlined in the 2024-25 Federal Budget. the renewable hydrogen economy in the state through a principles-based approach. Find out more: Victoria is focused on supporting www.energy.vic.gov.au/renewable-energy/renewable-hydrogen high-value hydrogen end uses such as heavy transport, shipping and aviation, industrial decarbonisation, and supporting long-duration energy storage and backup generation. 20 National Hydrogen Strategy Hydrogen Park Toyota Hydrogen Murray Valley Centre Hydrogen Park Murray Valley is a renewable Toyota Australia, with funding assistance hydrogen production facility that involves the from ARENA, commissioned Victoria’s first development of a 10 MW electrolyser to produce commercial-grade permanent hydrogen hydrogen for initial use of gas-blending into the production, storage and refuelling facility at Albury-Wodonga Gas Network. The facility will its former manufacturing site at Altona in be located alongside Northeast Water’s West Melbourne’s west. Together with the hydrogen Wodonga Wastewater Treatment Plant. Operated production, storage and refuelling facility, the by Australian Gas Infrastructure Group (AGIG), Toyota Hydrogen Centre also incorporates an the $65.46 million facility will produce renewable Education Centre to provide information on the hydrogen using renewable electricity purchased opportunities that exist with the introduction of from a Victorian wind farm. a hydrogen economy in Australia. The facility has received funding from the Hydrogen is produced on site by a 200 kW Victorian Government ($12.3 million) and ARENA electrolyser that uses electricity to split water into ($36 million) with additional financial backing hydrogen and oxygen components and has the from the CEFC. Wodonga’s strategic location on capacity to produce up to 80kg of hydrogen per the Hume Highway, a major road-freight route, day. Power for the electrolyser is drawn from a also provides access to other end-use markets, combination of an 87 kW solar array, a 100 kW particularly heavy-freight. battery storage and mains grid depending on what’s available at the time. Credit: Toyota. Toyota Hydrogen Centre at Altona. 21 Queensland The Queensland The Queensland Hydrogen Industry Strategy and associated initiatives have directed significant Queensland Government resources and funding Government has towards hydrogen and renewable energy industry development activities. committed to developing These include: a sustainable hydrogen industry to supply an • Building international partnerships through actively pursuing international technology partners and promoting investment established domestic opportunities. For example, government owned corporations including market and export Stanwell Corporation and CS Energy are progressing projects in partners with a safe, partnership with major international investors. sustainable and reliable supply of hydrogen. • Supporting private sector investment through project facilitation that supports projects to progress technical and commercial studies and development approvals, the $35 million Hydrogen Industry Queensland’s close proximity Development Fund and the Queensland Hydrogen Investor Toolkit. to Asia, established port In addition, the $4.5 billion Renewable Energy and Hydrogen Jobs infrastructure, manufacturing Fund enables energy government owned corporations to partner with capabilities and renewable the private sector to develop both domestic production and use and energy potential presents an large-scale export projects. exciting opportunity for world- leading production and export of • Strategic planning for infrastructure and services in partnership with the private sector, including the $15 million Supercharging Hydrogen renewable hydrogen that supports Hubs program, the $8.5 million Abbot Point Activation Initiative and an our collective decarbonisation $8 million desalination detailed business case for Gladstone. ambitions. Queensland’s renewable hydrogen • Supporting hydrogen research and innovation through the work of a number of Cooperative Research Centres. project pipeline is developing at pace, with more than 60 projects at • Investing in training and skills through the Hydrogen Industry Workforce Development Roadmap 2022–2032. The Roadmap is the various stages of development. first dedicated workforce development plan for the hydrogen industry and sets a path to achieving a clear vision – a strong and adaptable workforce for a safe and thriving Queensland hydrogen industry. • The Hydrogen Safety Code of Practice which provides a consolidated compliance framework for relevant safety requirements under the Petroleum and Gas (Production and Safety) Act 2004. The Queensland Energy and Jobs Plan further recognises the opportunity renewable hydrogen presents in transforming the energy system, through actions such as: • Legislation to support hydrogen development and use, including passage of the Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Act 2023 to provide a clear pathway for a proponent to apply for a pipeline licence for the transmission of hydrogen and hydrogen carriers. • Building community awareness of hydrogen through rolling out a $5 million renewable hydrogen awareness program. • Reviewing the Queensland Hydrogen Industry Strategy to continue to support the sector’s growth and contribute to the state’s renewable energy targets. Find out more about the Queensland Energy and Jobs Plan at www.energyandclimate.qld.gov.au 22 National Hydrogen Strategy Central Queensland Hydrogen Project (CQ-H2) Case Study Queensland Government owned corporation At its peak, the CQ-H2 Project is expected to and electricity generator Stanwell is leading an support more than 8,900 new jobs. The project international consortium to develop the global- will also deliver $17.2 billion in hydrogen exports scale Central Queensland Hydrogen (CQ-H2) and $12.4 billion to Queensland’s Gross State Project in Gladstone, Central Queensland. Its Product over its 30 year life. consortium partners include Japanese foundation partners – Iwatani Corporation and Marubeni – In addition to the CQ-H2 Project, Stanwell is and Singapore’s Keppel. The project aims to export leading the Central Queensland Hydrogen renewable hydrogen via its carriers to Japan and Hub (CQ Hydrogen Hub), which was awarded Singapore and supply large industrial customers $69.2 million in funding from the Australian domestically to support local decarbonisation. Government under the Regional Hydrogen Hubs Program. The hub consortium partners will match The CQ-H2 Project is undertaking its Front-End this funding and are working to develop their Engineering Design study with a commitment of projects and associated infrastructure to further $117 million from government and consortium the renewable hydrogen industry in the Central partners, including $20 million from ARENA and Queensland region. $15 million from the Queensland Government. Stanwell is also developing a Future Energy The project includes a hydrogen production facility, Innovation and Training Hub adjacent to a hydrogen pipeline, a hydrogen liquefaction its Stanwell Power Station where hydrogen facility and ship loading facilities at Gladstone technologies will be tested. This includes Hysata Port, and supply of hydrogen to an ammonia demonstrating their next generation Australian- production facility. Operations are planned to made hydrogen electrolyser technology at commence in 2029 and scale up to 800 tonnes per commercial scale with funding from ARENA and day from the early 2030s. Stanwell. Credit: Stanwell Corporation. CQ-H2 artist impression. 23 Western Australia Western Australia’s (WA) Western Australian Renewable Hydrogen Strategy vision is to be a globally In 2019, the WA Government announced its Renewable Hydrogen Strategy significant producer, (WA Strategy). A refreshed Strategy is currently underway, which will detail user and exporter of the state’s continued commitment to support and develop a renewable renewable hydrogen. hydrogen industry in WA. The refreshed WA Strategy outlines the establishment of renewable WA Advantages hydrogen hubs in WA with investment in supporting infrastructure and • High-intensity renewable energy resources – with one of the use of renewable hydrogen to decarbonise processes to produce green products (including ammonia, iron and alumina) and use in other the highest solar irradiance in WA priority sectors. The refreshed WA Strategy describes how WA is well- the world and excellent wind placed to export renewable hydrogen products and technologies globally. resources. • Land and existing infrastructure Key actions of the refreshed WA Strategy include: – with an area one-third of the Australian continent, low • Streamlining approvals. population density, world-class • Supporting the delivery of common-use and other enabling infrastructure, and Strategic Industrial Areas (SIAs). industrial and export infrastructure, WA is an ideal • Promoting skills and research, development and demonstration. location to develop large-scale renewable energy generation. • Empowering Aboriginal People. • Skilled workforce – WA has a • Strengthening strategic partnerships for investment and trade. technically skilled workforce, Developing domestic capabilities and applications of renewable hydrogen, expertise across the energy thereby improving local hydrogen industry expertise, will contribute to sector and relevant research decarbonising global and WA economies. capabilities. To date, the Australian and WA governments have committed over • Established industry with strong international $3 billion in funding to expand and modernise electricity grids in Perth, the South West, as well as in the North West Pilbara region. The WA partnerships – many of the Government has committed $500 million under the Strategic Industries world’s largest mining and oil Fund (SIF) to unlock WA’s SIAs and pave the way for WA to become a global and gas companies have a local clean energy powerhouse. The SIF is on top of the $160 million in lease presence in WA and are looking incentives scheme to attract clean energy projects to the SIAs. $13 million at transitioning to a hydrogen was allocated to renewable hydrogen projects in the initial round of the future. Investment Attraction Fund (IAF), with a $60 million IAF New Energy Round • Proximity to global markets – WA is Australia’s western including provision for hydrogen projects. gateway to Asia and has a long The 2019 WA Strategy established a $15 million Renewable Hydrogen Fund term partnership with major (RHF) that led to the delivery of several innovative projects in Western Asian economies, in particular Australia, including: in the energy sector. • The Yuri Renewable Ammonia Project (under construction) which demonstrates the potential to produce green ammonia for export using renewable hydrogen. • The ATCO Gas Blending Project that incorporated hydrogen into a portion of the natural gas network to provide lower carbon gas to areas of Perth. • The ATCO Refueller for a refuelling facility for hydrogen fuel cell electric vehicles in Perth. • Horizon Power’s Denham Micro-grid project which provided hydrogen-based firm capacity to up to 100 residential houses in Denham. 24 National Hydrogen Strategy Hydrogen Hubs Fast-track Approvals • Extensive work has been undertaken to develop hydrogen hubs in the Pilbara, Mid • The WA Government has committed $44.3 million to speed up approvals on West and Kwinana. Hydrogen hubs are job-creating projects for WA, established a intended to improve competitiveness by Green Approvals team and an Office of the co-locating demand and supply and attract Coordinator General to assist in streamlining investment through infrastructure provision. approvals for green energy projects including • The Australian and WA Governments have a $140 million agreement to build the Pilbara renewable hydrogen. Hydrogen Hub, a major centre for hydrogen Legislative Reforms production and export. The WA Government has also committed $60 million to develop the • The introduction of diversification leases under the Land Administration Act expands Mid West Hydrogen Hub and the Australian the legislative framework for land access for Government has announced $70 million for renewable energy projects. Reform is also H2Kwinana. underway to increase approval efficiency under the Environmental Protection Act. Credit: Hazer Group Limited © 2022 – All Rights Reserved Find out more: www.wa.gov.au/government/publications/western-australian- renewable-hydrogen-strategy-and-roadmap 25 South Australia Through the State The Port Bonython Hydrogen Hub is anticipated to be South Australia’s first large-scale clean hydrogen production precinct for both export and Prosperity Project, The domestic markets. The South Australian Government is collaborating Government of South with the Commonwealth and private sector to deliver the project, located Australia is making a 16 kilometres from Whyalla. once-in-a-generation First movers are expected to export clean hydrogen by 2030, before scaling investment along with up to maximise the economic return to South Australia. An Expressions world leading legislation of Interest process commenced in June 2024 seeking involvement from to unlock industrial businesses to jointly investigate the development of a hydrogen-based scale renewable energy, Direct Reduction Iron plant in South Australia. This will form part of the water and hydrogen South Australian Government’s Green Iron and Steel Strategy. production to enable The Northern Water project aims to provide a new, climate independent green manufacturing water source for the Far North, Upper Spencer Gulf and Eastern Eyre and exports and attract Peninsula regions of South Australia, to enable the growth of industries investment. crucial to achieving net zero, including expansion of copper and magnetite production and the emerging green hydrogen industry. The final decision The South Australian Government’s to proceed with the construction of the desalination plant and 600km Hydrogen Jobs Plan will deliver transfer pipeline is expected in late 2025. a world-leading hydrogen power plant, electrolysers and storage Private sector hydrogen developments are progressing in South facility in Whyalla. The project Australia with a range of state, Commonwealth and international includes 250MWe of electrolysers, government funding. 200MW of power generation and a hydrogen storage facility. Operating: Offtake for industrial applications • AGIG HypSA Project – 1.25 MW electrolyser and up to 10% hydrogen blend network injection, powering around 4000 homes and businesses. is a key objective of the project to enable green manufacturing Under Development: opportunities which have the potential to transform the • AGIG Hyp Adelaide Project – Hydrogen gas to be produced by a 60 MW electrolyser and be blended at up to 20% by volume into Adelaide’s gas Upper Spencer Gulf. The South networks for over 350,000 residential and business customers. Australian Government has signed an agreement with the GFG • Marubeni (Bolivar) – 150 kW electrolyser and 5 MW battery to demonstrate renewable hydrogen production and storage to transport Alliance to explore opportunities for renewable hydrogen offtake hydrogen via metal hydride technology to Indonesia. from the facility to support the decarbonisation of the Whyalla • Iron Road / Amp Energy (Cape Hardy) – Up to 10 GW electrolyser (initially 1 GW) over the next decade to produce green hydrogen for Steelworks. The Australian green ammonia production and other hydrogen derivatives. Government awarded $63.2 million towards the purchase and • Vast Solar SM1 Solar Methanol Project (Port Augusta) – 10 MW electrolyser producing hydrogen and combining with 15,000 tonnes commissioning of a low carbon per annum CO2 (from co-located Calix lime plant) to produce up to electronic arc furnace to support 7500 tonnes per annum of methanol. green steel manufacturing. • Hallett Group Green Cement Project (Port Augusta) – $125 million green cement transformation project in collaboration with Korean company, Elecseed with 6 MW hydrogen electrolyser. Legislation The South Australian Government has legislated the Hydrogen and Renewable Energy Act 2023 which streamlines processes for companies to invest in South Australian projects. The Act provides a ‘one window to government’ licensing and regulatory system for the whole lifecycle of large-scale hydrogen and renewable energy projects. 26 National Hydrogen Strategy Hydrogen Jobs Plan The Government of South Australia has The 250 MWe electrolysers will be one of the committed more than half a billion dollars to world’s largest, providing additional grid stability the Hydrogen Jobs Plan, to build a world-leading for homes and businesses around the state by hydrogen power plant, electrolyser and storage utilising excess renewable energy generated from facility near Whyalla, in the state’s Upper Spencer large-scale wind and solar farms to produce green Gulf region, in 2026. hydrogen. The 200 MW renewable hydrogen power plant will be a new source of flexible power The Hydrogen Jobs Plan aims to: providing firming services for industrial customers • provide jobs for South Australians in South Australia. The associated storage facility • enhance South Australia’s grid security, through new dispatchable generation will store hydrogen for the operation of the power plant and potential use by local industry looking to decarbonise their operations. • prove large-scale hydrogen production and generation technology The South Australian Government has entered • help unlock pipelines of renewable energy developments and business opportunities into Early Contractor Involvement agreements with an ATCO Australia and BOC Linde consortium, as well as EPIC Energy for the • activate other hydrogen projects in development, including export-focused project. projects • support South Australia’s continued clean energy transition and decarbonisation. Artist’s impression of the proposed Hydrogen Jobs Plan facility. Find out more: www.hydrogen.sa.gov.au 27 Tasmania Tasmania is uniquely Local Market Activation - Tasmanian Renewable placed to assist in the Hydrogen Industry Development Fund transitioning energy Feasibility Studies - The Tasmanian Government provided $2.6 million to landscape in the export support 3 feasibility studies investigating large-scale renewable hydrogen and local use of green projects in Tasmania, including green ammonia and green methanol hydrogen and its export scale projects, and the use of hydrogen to replace natural gas in a derivatives, such as minerals processing plant. Knowledge sharing reports from these studies are available at www.recfit.tas.gov.au/hydrogen. green methanol and green ammonia. The Green Hydrogen Price Reduction Scheme (GHPRS) was launched in late 2023 and will allocate up to $8 million to incentivise the production, Importantly, developing a green sale and use of green hydrogen within Tasmania. The scheme aims to hydrogen economy is consistent bring the sale price of green hydrogen down to a level that is competitive with Tasmania’s clean and green with other energy or fuel sources. The GHPRS will support small-to- reputation where the Tasmanian medium-scale green hydrogen production projects within the range of Government has legislated a new

5-10 MW. The successful applicant was announced on 13 May 2024. emissions reduction target for Tasmania of net zero emissions, Green Hydrogen Bus Trial - The Tasmanian Government has allocated or lower, from 2030 across all $11 million to Metro Tasmania’s Zero Emission Bus (ZEB) Trials. The industries. hydrogen fuel cell bus trial will commence later in 2024 and includes 3 buses in Hobart and a new hydrogen refuelling station. Like the rest of Australia, export scale projects will need to be supported by the build out of new Tasmanian Green Hydrogen International Engagement renewables. However, Tasmania and Export Strategy is one of a few places in the world that can offer 100% renewable The strategy was released in May 2022 and the Tasmanian energy through its hydropower Government has established the following international partnerships and wind resources to help power in green hydrogen: export scale projects, as well as access to existing deep water ports • Memorandum of understanding (MoU) with the Port of Rotterdam to work together to investigate the feasibility of future exports of green in industrial precincts, and has hydrogen from Bell Bay, Tasmania, to the Port of Rotterdam in the abundant fresh water. Netherlands. A supply chain study has been finalised and is available at www.recfit.tas.gov.au/hydrogen. More information is available in the Tasmanian Renewable • MoU with the region of Flanders, Belgium, on green hydrogen cooperation. The agreement focuses on the development of Hydrogen Action Plan released in 2020. international supply chains, research and development and project collaboration. • Ahydrogen Joint Declaration of Intent for collaboration in relation to green with the state of Bremen in Germany. The scope of this agreement includes sharing of knowledge on green hydrogen, climate change and Antarctic cooperation. Work has commenced on the development of an MOU with the Australian Antarctic Division to cooperate on understanding the role of green hydrogen in decarbonising Antarctica. A Tasmanian Renewable Hydrogen Industry Network was formed in a partnership between the Tasmanian Government and the Bell Bay Advanced Manufacturing Zone to: • help local businesses engage with industry experts and other Tasmanian businesses with interest in the hydrogen space • feature hydrogen industry experts speaking about the importance of hydrogen to the Tasmanian economy and the opportunities that will arise for Tasmanian business as it grows. 28 National Hydrogen Strategy Tasmanian Green Hydrogen Hub In January 2024, the Australian and Tasmanian It will provide open access infrastructure in governments announced a Grant Agreement the areas of electricity transmission, water and for the Tasmanian Green Hydrogen Hub (TGHH), ports and will include local market activation which unlocked $70 million of Australian projects. This announcement further supports Government funding towards the $300 million the vision of the Tasmanian Renewable Hydrogen TGHH project at Bell Bay. The Tasmanian Action Plan. A hydrogen-powered marine vessel Government has partnered with TasPorts, will be delivered as the first demonstration TasNetworks, TasWater, Tasmanian Irrigation and project under the market activation stream of the Bell Bay Advanced Manufacturing Zone Pty the TGHH. The first stage of this project aims to Ltd to deliver this project over the next 4 years. support up to 300 MW in electrolyser capacity, then scale up over time. Photo of Bell Bay Advanced Manufacturing Zone. The aim is to transition the Bell Bay Advanced Manufacturing Zone to a Zero Emission Industrial Precinct through integration with the TGHH. Find out more: www.recfit.tas.gov.au/future_industries/green_hydrogen 29 Northern Territory Hydrogen will play Northern Territory Renewable Hydrogen Master Plan a crucial role in the In 2021, the NT Government released its Renewable Hydrogen Northern Territory (NT) Master Plan, outlining the key foundational activities it is undertaking achieving its target of to enable private sector investment and support the establishment of net zero emissions by a local and export renewable hydrogen industry, including through: 2050 and in realising its ambition to facilitate • fit-for-purpose hydrogen regulations and legislation global decarbonisation. • territory-wide renewable energy resource assessments • strategic water and land use planning The Territory is well-placed to support the establishment of a • workforce skills and capability development local and export-scale hydrogen • fostering research and innovation industry, leveraging the Territory’s • assessment of early commercial applications to grow demand. competitive advantages including: • Abundant renewable energy resources, including globally Enabling Infrastructure In addition to industry development, the Territory is also undertaking competitive solar and wind a master-planning approach to key enabling infrastructure to support resources and large areas large-scale hydrogen projects: of land with potential for development. Middle Arm Sustainable Development Precinct • Demonstrated experience and capability in delivering The NT Government is working with industry and the Australian Government to transform 1,500 hectares at Middle Arm, adjacent to world-scale energy production Darwin Harbour, into a globally competitive, sustainable industrial and export projects, and the precinct. The precinct will include processing, production and export ability to adapt these skills to facilities with a focus on low emission, clean hydrogen, carbon capture hydrogen projects. and storage and critical minerals processing. • Strategic location in close geographical proximity to key The NT Government has committed $28 million to support detailed design, strategic environmental assessments, business case international export markets. development and preliminary infrastructure works. Additionally, the • Anetwork well-developed infrastructure to support an export- Australian Government has committed $1.5 billion in planned equity to support the construction of common user marine infrastructure, scale hydrogen industry, including modular offloading facility, a common user wharf, and including deep-water port widening of shipping channels, to fast track precinct development. electricity, and gas networks, road and rail. Find out more: www.territoryrenewableenergy.nt.gov.au 30 National Hydrogen Strategy Project Facilitation To facilitate the significant interest in the Darwin H2 Hub Territory as a hub for hydrogen production, the In January 2024, the NT Government awarded NT Government is taking a proactive approach Major Project Status to the Darwin H2 Hub, a by streamlining environmental and regulatory new export-scale green hydrogen project, which approvals for coordinated proponent outcomes is being developed by international renewable and maximum value for the Territory. energy company TE H2 (formerly Total Eren). Proposed to be located at the Middle Arm The NT Government’s Investment Territory team Precinct, the Darwin H2 Hub is expected to supports and facilitates projects of economic produce more than 80,000 tonnes per year. significance from development through to operation. Major Project Status is granted to Credit: Northern Territory Government. Across the significant, complex projects with strategic and NT there is strategic land use and resource planning underway, economic impact. including for key enabling infrastructure and renewable energy resource assessments (including solar and wind) for potential large-scale energy generation. 31 Australian Capital Territory Net Zero Emissions Hydrogen for Transport – Australia’s first public hydrogen Territory refuelling station The Australian Capital Territory In March 2021, Hyundai, ENGV, ActewAGL, the ACT Government and (ACT) Government has a legislated renewable energy developer Neoen Australia collaborated to open and target of achieving net zero operate Australia’s first public hydrogen refuelling station. The station was greenhouse gas (GHG) emissions designed and built by Pacific Energy and the station was then acquired by by 2045 at the latest under the Pacific Energy in April 2024 – it produces and stores hydrogen on site and Climate Change and Greenhouse can currently refuel up to 30 vehicles with plans for expansion in place. Gas Reduction Act 2010. The ACT Climate Change Strategy 2019– The ACT Government operates 20 hydrogen fuel cell vehicles, the first and 2025 sets out the next steps in largest government fleet of hydrogen vehicles in Australia. The lessons how the ACT Government will work learned through this trial will serve as a base to expand the number of with the community to respond zero emissions vehicles in the ACT. to climate change and achieve Transport is the largest source of emissions in the ACT, contributing over net zero emissions by 2045. 60% of all greenhouse gas emissions. Opportunities for hydrogen to Since achieving the 100% support emissions reduction from transport, especially for commercial renewable electricity target in fleet operators, are present in the ACT owing to its small footprint and 2020, the ACT has focused efforts road links to NSW and Victoria. on reducing emissions from fossil fuel gas use (19.9%) and transport Green Hydrogen Knowledge Economy in the ACT (64.6%) – the two largest remaining contributors to the ACT’s current The $17 million Energy Innovation Fund and the ACT Government’s greenhouse gas emissions*. The renewables auction industry contributions will continue to invest in energy ACT’s Integrated Energy Plan innovation research and development activities, including support for provides a pathway for the ACT’s the development of a green hydrogen knowledge economy in the ACT. energy system transformation Existing grants have supported projects such as large-scale underground and contributes to the Territory hydrogen storage technology, on-demand renewable hydrogen achieving net zero emissions by production technology, and liquid organic hydrogen storage technology. 2045. Electrification will be the best The Australian National University has a broad portfolio of hydrogen option to decarbonise most gas research, including: applications. Renewable hydrogen could play • the development of highly efficient electrolysers, materials, and devices for hydrogen storage in liquid organics and layered materials an important, but targeted role in decarbonising the ACT’s niche • innovative use of renewable hydrogen in industrial processes applications that are difficult or • social licence issues, certification, governance, and economics to address prerequisites and underpinnings of an emerging Australian currently impossible to electrify. These applications include those hydrogen economy. that require high temperatures to support production, such as asphalt producers and glassworks Find out more about the ACT’s Integrated Energy Plan: facilities. Heavy equipment, plants www.climatechoices.act.gov.au and machinery may also face challenges to electrification. There is also opportunity to explore the role of renewable hydrogen to decarbonise heavy road transport in the ACT. * ACT Greenhouse gas Inventory for 2022-23 www.climatechoices.act.gov.au/__data/assets/pdf_ file/0003/2329824/ACT-Greenhouse-Gas-Inventory-Report-2022-23.pdf 32 National Hydrogen Strategy Australia’s first liquid hydrogen storage facility Industry contributions from the ACT Government’s It not only includes the technology renewables auction industry commitments continue development but also the regulatory study to support renewable energy research, development on how to remove barriers for the future and investment in the ACT. commercialisation and deployment of the LOHS technology at scale. This $1.4 million project aims to develop an innovative Liquid Organic Hydrogen Storage (LOHS) Led by ARC Laureate Fellow Professor technology and prove its energy industry potential. Yun Liu from the Australian National Liquid organic hydrogen storage is a solution to University in collaboration with a team of store hydrogen at room temperature and ambient academics and industrial engineers from the pressure, a solution for the storage and transport University of New South Wales (Canberra) of large-scale renewable energy. and Hydrogenia, this project is supported by an Australian Research Council grant, The project expects to expand and validate the and industry contributions from Global performance, safety and scale-up potential of this Power Generation Australia (GPG Australia) new technology in an industrial context to support the as part of the ACT Government’s renewables development of the hydrogen economy in Australia. auction industry commitments. Credit: ACT Government 33 Credit: ENGIE. Wide angle shot of the ENGIE Yuri Green Hydrogen Project site, showing where solar panels will be installed, with the Yara Pilbara Fertilizers plant in the background. 34 National Hydrogen Strategy 1. Why develop an Australian hydrogen industry? 1.1 Global demand for hydrogen Key points is Australia’s opportunity • Hydrogen will play an essential complementary role to electrification in decarbonising the Global momentum for hydrogen has steadily built global economy, particularly in hard-to-abate over the past 5 years as countries seek to reduce sectors. their emissions in line with Paris Agreement goals. • Global momentum for hydrogen has accelerated over the past 5 years, with many This trend will continue. The International Energy Agency’s (IEA) Announced Pledges Scenario forecasts countries lifting their ambition, and increasing low-emission hydrogen production will rise from international competition for investment. 30 million tonnes in 2030 to over 250 million tonnes • Australia by 2050. Global demand under the IEA’s Net Zero is well-placed to produce hydrogen Emissions by 2050 Scenario is even bigger, at due to our natural advantages and capabilities. around 420 million tonnes, more than 4 times • Australia aspires to be a global hydrogen leader, playing an important role as a global existing demand.9 hydrogen supplier, supporting energy security Most of Australia’s largest trading partners, covering for our trade and strategic partners and the bulk of Australia’s exports by value,10 have enabling international emissions goals to committed to achieving net zero emissions by around be met. the middle of this century. Many of our partners • Australia’s have signalled an intention to make hydrogen a hydrogen project pipeline is central component of their future energy strategy. significant – around 20% of the global total. Significant hydrogen users and import target announcements include: • Japan: targeting the use of 3 million tonnes per year of hydrogen by 2030, 12 million tonnes by 2040 and 20 million tonnes by 2050.11 • Republic of Korea: targeting the use of 3.9 million tonnes of hydrogen per year by 2030, up from 220,000 tonnes in 2021. • European Union: targeting the import of 10 million tonnes of hydrogen in 2030 (plus 10 million tonnes of domestic production). Although the level of competition is rising around the globe, Australia’s renewable energy resources position Australia well for hydrogen production and related export and manufacturing opportunities.

9 IEA 2023, Hydrogen Net Zero Emissions Guide. www.iea.org/reports/hydrogen-2156

10 CCA 2021, Trade and Investment trends in a decarbonising world. www.climatechangeauthority.gov.au/sites/default/files/Trade%20and%20investment%20trends%20 in%20a%20decarbonising%20world_0.pdf

11 METI Ministry of Economy, Trade and Industry 2020, Green Growth Strategy Through Achieving Carbon Neutrality in 2050. www.meti.go.jp/english/policy/energy_ environment/global_warming/ggs2050/index.html 35 Why Australia for hydrogen? Australia’s comparative advantages in the global hydrogen economy World-class renewable Political and economic stability energy which represents low sovereign risk for investors • Largest producer of solar energy per person, and 6th largest in absolute terms, • Good governance, strong institutions in 2021 and the rule of law • 3rd lowest cost for generating solar power • Transparent regulation and open markets among major solar-power producers • Sophisticated financial markets and a large • In the top 15 global onshore wind energy managed funds sector producers, with 6 priority areas for offshore wind industry development • 6th most attractive country for renewable Ready to supply global energy investment hydrogen markets • 262,000 km2 of land highly suitable for hydrogen production using renewable • Committed to the Paris Agreement’s goals electricity and global climate leadership - backed by legislated emissions targets that will see • Over 100 hydrogen projects in the pipeline hydrogen used locally and the first country to ship liquified hydrogen • Predicted by the International Energy Agency to be the 2nd largest net-exporter of low-emissions hydrogen by 2030 and the largest by 2050 Skilled workforce and globally • Becoming a renewable energy superpower, recognised innovation ecosystem with 17 free trade agreements and bilateral agreements on clean energy and hydrogen • One of the highest ratios of renewable with major trade partners in Asia, Europe, energy patents in the world – on par with the United States and the United Kingdom the United States and Germany – and almost 40,000 renewable energy patents • Proximity to, and close economic ties with, in the last 2 decades key importing countries including Japan and the Republic of Korea • One of the world’s most highly skilled workforces and #1 ranking as most • Long-standing track-record as a reliable and attractive place for talent in the world trusted resources and energy supplier • High-impact research across multiple fields, including materials science and engineering, and 7 institutions in the world’s best 100 universities For sources, refer to Austrade’s Benchmark Report 2023 and Australian Hydrogen Equipment, Technology and Services capability directory, available at: www.globalaustralia.gov.au 36 National Hydrogen Strategy 1.2 Australia’s 2024 National Achieving Australia’s 2030 emissions reduction target Hydrogen Strategy of 43% below 2005 levels is a critical step towards the long-term objective of net zero emissions by 2050.13 While electrification will play a central role in Australia’s In February 2023, the Australian Government, with net zero transition, hydrogen will need to play an the support of all states and territories, committed to important complementary role to help decarbonise review the 2019 National Hydrogen Strategy.12 This existing hard-to-abate sectors (see Box 1). decision reflected: • that further concerted effort will be needed if Australia is to realise our hydrogen export The 2024 Strategy also considers the hydrogen industry’s vital role as the basis of future investment opportunity, which is central to our ambition to and exports. Global hydrogen demand represents a become a renewable energy superpower significant economic opportunity for Australia and a way through which we can contribute to global • the need to explicitly consider the role of hydrogen in Australia’s decarbonisation pathway and energy decarbonisation. Hydrogen can be exported as an energy carrier to countries less well-placed to generate transformation. renewable electricity. Box 1: Hydrogen’s decarbonisation potential Australia has a legislated commitment to achieve net zero emissions by 2050. To support • Electricity and Energy - Hydrogen intersects with this sectoral plan as: this, the Australian Government is preparing – A substitute for and complement to decarbonisation plans for 6 key sectors. The 2024 natural gas-based power generation. National Hydrogen Strategy intersects closely with Hydrogen will be used as a fuel for peaking 3 of these sectoral plans: power generation to firm the grid, including • Industry - Hydrogen represents a prospective chemical feedstock or high-temperature fuel under the South Australian Government’s Hydrogen Jobs Plan. for several hard-to-abate industrial sectors. – A source of new load and load flexibility. Ammonia produced with hydrogen also offers Large-scale hydrogen production using a pathway to reduce upstream emissions electrolysis will require substantial amounts from fertilisers and explosives. Green metals of renewable energy. As such, even a small (specifically iron and alumina) are likely amount of load flexibility in grid connected hydrogen users and sectors that align with facilities will potentially provide substantial the principles included in the National Interest benefits to maintaining grid balance. Framework. – Long duration energy storage. Hydrogen • Transport - While less likely to be used widely in small vehicles, hydrogen presents a real can be a medium for static energy storage; for example, when intermittent renewable opportunity to decarbonise heavy duty and energy is used to produce hydrogen. long-haul transport – heavy road, rail, maritime Underground storage of gases is common and aviation fuels. practice and large quantities of hydrogen could be stored in salt caverns or depleted gas reservoirs. Pipelines are another significant storage option.

12 ECMC 2023, Energy and Climate Change Ministerial Council Communique. www.energy.gov.au/sites/default/files/2023-02/ECMC%20Communique%20-%2024%20 February%202023.docx

13 The Climate Change Act 2022 legislated Australia’s emissions reduction targets of 43% below 2005 levels by 2030 and net zero by 2050 37 Australia can also export low-emissions products For these reasons, the 2024 National Hydrogen manufactured locally using hydrogen such as iron, Strategy outlines our revitalised national effort to alumina, ammonia and low carbon liquid fuels. This unlock our hydrogen potential. It is the strategic domestic production capacity will also support the policy framework underpinning the Australian resilience of our supply chains in the face of potential Government’s substantial hydrogen investments global disturbances. through the 2024-25 Budget and under the Future Made in Australia agenda. Global momentum has steadily built in recent years and many countries are positioning to capture the In the 5 years since Australia’s inaugural strategy, opportunity from hydrogen and downstream sectors Australia’s governments have focused efforts on such as green metals. Australia has advantages the early foundations for industry growth (Figure 1). in terms of our renewable energy and geological But to date we have lacked the incentives needed to endowments, but these alone are not enough. Without drive economies of scale and build experience. The further action, Australia risks ceding this opportunity 2024 National Hydrogen Strategy moves beyond to our competitors. early industry activation measures to focus on what is necessary for industry to develop, invest in and deliver large-scale hydrogen production-and-use projects. As a result, delivering both environmental and economic advantages for Australia. International partnerships Guarantee of origin and engagement certification scheme Review supporting use of hydrogen in Australian gas Legal framework reviews networks State of Hydrogen report H2 Skills and training needs review H2 Support for pilots, trials Hydrogen Hubs and demonstrations National Hydrogen Community education Infrastructure Assessment program Figure 1 Early actions and policies to activate Australia’s nascent hydrogen industry 38 National Hydrogen Strategy 2. Unlocking cost-competitive hydrogen production 2.1 Hydrogen production Key points targets • Australia will adopt a long-term national hydrogen production target to signal our Targets provide focus, greater certainty for investors, hydrogen ambitions, help attract investment, signal intention, drive coordinated action and set the and support infrastructure planning. Australia basis for measuring success. Many countries have will target producing at least 15 million tonnes established hydrogen production or use targets as of hydrogen annually, with a stretch potential part of their hydrogen strategies with clear linkages to of 30 million tonnes annually, by 2050. their decarbonisation policies.14 • Australia will set 5-yearly milestones to track progress against the national target. The first Targets can bolster investor confidence by sending 5-yearly milestone in 2030 is 0.5 million tonnes a clear signal to trading partners about the of production annually, with a stretch potential future marketplace in Australia for hydrogen and milestone of producing 1.5 million tonnes hydrogen-based fuels. Through a national production annually. target, the Australian Government can demonstrate to business and investors, both domestically and • Hydrogen production incentives, particularly the Hydrogen Headstart program and the overseas, that Australia is committed to building its hydrogen industry and providing investment Hydrogen Production Tax Incentive announced and regulatory certainty consistent with the goal. A under the Future Made in Australia agenda, hydrogen production target can outline the scale and will catalyse the investment needed to achieve timing for Australia’s hydrogen ambitions, giving both these targets. producers and users of hydrogen the confidence and • Related initiatives supporting ultra low-cost renewable energy – the biggest component certainty they need to plan and invest. of hydrogen production costs – will also A national hydrogen production target can also contribute to hydrogen industry development. help inform wider planning and investments by governments. This includes helping infrastructure • Australia’s governments will work together to plan and deliver key infrastructure, including planners across all levels of government to consider when and where long lifetime assets, such as for hydrogen storage, transport and water. renewable energy and ports, may be needed. A target Governments will also progress place-based can support coordinated action across and within measures that integrate hydrogen hubs governments by providing confidence on the scale and with decarbonisation of broader industrial timing for hydrogen’s availability, which can in turn precincts. inform the design of emissions reduction policies and standards. This includes the sectoral decarbonisation plans that will inform Australia’s net zero plan. Modelling for the National Hydrogen Strategy considered hydrogen’s expected role across the Australian economy in 5-yearly increments. Each scenario enables the Australian economy to reach the legislated target of net zero carbon emissions by 2050.

14 IEA Clean Energy Ministerial Hydrogen Initiative, Global hydrogen targets. www.cleanenergyministerial.org/content/uploads/2022/07/aspirational-targets- briefing-150722.pdf 39 Credit: Hysata. Hysata electrolyser manufacturing facility at Port Kembla. To aid comparison with existing analyses each scenario Realising the stretch potential would be significantly adopted a range of assumptions that were generally more ambitious. It would reflect a much bigger aligned with those used to underpin: investment in Australia by partner countries, as well • the Australian Industry Energy Transitions Initiative 15 as the opportunities provided by the energy transition and global decarbonisation, and striving to become a hydrogen powerhouse on a global scale. Realising • the Australian Energy Market Operator’s (AEMO’s) Integrated System Plan. 16 this stretch potential would mean Australia capitalising on markets beyond our borders in relation to the export of hydrogen, including through the export of Each of these analyses were developed through low carbon liquid fuels or green metals made with extensive consultation and based on the best available hydrogen. information.17 The modelling output was used as a primary input to the formation of a base target and stretch potential. ‘Australia could set production and demand The base hydrogen production target reflects a targets to realise its ambitions to be a hydrogen substantial growth trajectory for the Australian leader by 2030. Setting 2030, 2040 and 2050 hydrogen industry and is the more likely endpoint targets would give the market certainty and reflecting strong levels of policy support and the level accelerate domestic demand.’ of engagement from the various elements of the Copenhagen Infrastructure Partners hydrogen industry.

15 Climateworks Centre and Climate-KIC Australia 2023, Pathways to industrial decarbonisation: Positioning Australian industry to prosper. www.energy-transitions.org/ publications/pathways-to-industrial-decarbonisation

16 Australian Energy Market Operator 2023, 2023 Inputs, Assumptions and Scenarios Report, July 2023. https://aemo.com.au/-/media/files/major-publications/ isp/2023/2023-inputs-assumptions-and-scenarios-report.pdf?la=en

17 CSIRO 2024 Scenario modelling of the production and consumption of hydrogen in Australia, CSIRO, Australia. 40 National Hydrogen Strategy TARGET 1 Australia’s long-term national hydrogen production targets (Figure 2) are aligned with our national Australia will produce at least 15 million emissions reduction targets. The production tonnes of renewable hydrogen per year, target demonstrates the Australian Government’s with a stretch potential of 30 million commitment to building the hydrogen sector to tonnes by 2050. enable decarbonisation domestically and for our trading partners. The production target, coupled with supporting policies and programs such as production incentives, will help signal and substantiate Australia’s hydrogen ambitions, attracting investment in the sector. The target will also support long-term infrastructure planning such as for renewable energy production or ports. 35 2050 hydrogen production stretch potential 30 Hydrogen production (Million tonnes) 25 20 2050 hydrogen production base target 15 10 5 0 2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 2045 2050 2025 2030 2035 2040 2045 2050 Low Central High Figure 2 Modelled hydrogen production for 2025-2050 Showing Australia’s base target and stretch potential for 2050, and associated production trajectory in 5-yearly increments under the 3 scenarios considered. The Low case is informed by the AEMO Step Change scenario; Central was also informed by the Step Change scenario but with additional export driven production; High was informed by the AEMO Green Energy Export scenario with additional export. Source: CSIRO 2024 Scenario modelling of the production and consumption of hydrogen in Australia 41 ACTION 1 Focus government support on renewable hydrogen, complemented by suitable emissions intensity thresholds and other requirements for government-supported hydrogen projects, with GO certificates to form the basis of verification. Box 2: Prioritising support to renewable hydrogen The 2019 National Hydrogen Strategy envisaged the establishment of a ‘clean’ hydrogen industry, • expectation of future offtake preferences for renewable hydrogen in some global markets using a technology neutral approach. This included hydrogen produced through renewable • modular and scalable nature of electrolyser- based production electricity powered electrolysers and/or fossil fuel-based production coupled with substantial • high cost of achieving high carbon capture rates (greater than 90%) carbon capture and storage (capture rates of 90% or more). • expectation that electrolyser-based production will decrease in cost compared to a relatively The Australian policy landscape has subsequently static cost of carbon capture and the increasing shifted, with commitments to a net zero economy by cost of fossil fuels. 2050 and ambitious goals for emissions-reduction and renewable generation in 2030. The Australian The Australian Government will also establish Government has also outlined its ambition to emissions intensity thresholds and other become a renewable energy superpower. requirements for government-supported renewable hydrogen projects. The Guarantee of In light of these commitments, the Australian Origin (GO) scheme certificates will form the basis Government has prioritised its policy efforts and of verification. financial support towards renewable hydrogen projects, which are clearly aligned with Australia’s net zero goals. A range of analyses indicate that renewables are likely to offer the lowest cost, lowest emissions intensity and be most scalable in the long-term. For example, scenario analysis based on the latest efficiency and cost data found electrolysis contributed over 98% of total hydrogen production out to 2050.18 Other factors include the: • Australian project pipeline, based on IEA data, is overwhelmingly focussed on renewable Fossil Fuel + CCUS Electrolyser hydrogen production projects, which is Figure 3 Production pathway of announced consistent with the global trend (Figure 3) projects

18 CSIRO 2024 Scenario modelling of the production and consumption of hydrogen in Australia, CSIRO, Australia. 42 National Hydrogen Strategy 5-yearly production milestones The Australian Government is delivering a combination of initiatives that provide a solid basis for industry, To complement the long-term production target, a investors, communities and workers to achieve series of 5-yearly milestones will provide for short- our first hydrogen production milestone for 2030. term progress monitoring, reporting and ongoing The government will also continue to work with policy development (Figure 4). They will provide our international partners to develop international valuable indicators both of the development of markets and supply chains. Australia will take an Australia’s hydrogen industry and of the pace at which adaptive approach to production milestones and will the global hydrogen opportunity is emerging. reconsider the level of milestones if there is evidence of international demand developing either faster or CSIRO’s scenario analysis and consideration of the slower than anticipated. existing project pipeline suggests production may be around 0.5-1.5 million tonnes by 2030. Achieving these levels of production will depend on a range of factors, TARGET 2 including Australia’s efforts to incentivise production In addition to the 2050 hydrogen and build a supportive enabling environment and production target, Australia’s progress will wider factors such as the development of supply be measured against the following annual chains, markets and international demand for hydrogen and its derivatives. hydrogen base and stretch production milestones: • 2030: 0.5 – 1.5 million tonnes • 2035: 3 – 5 million tonnes • 2040: 5 – 12 million tonnes • 2045: 9 – 20 million tonnes 30 Annual production (million tonnes) Stretch potential 25 Base target 20 15 10 5 0 2030 2035 2040 2045 2050 Figure 4: 5-yearly base and stretch production milestones 43 Achieving the national production target This is consistent with other analyses that have found that, as the sector scales, it will often be more Achieving Australia’s 2050 base production target will efficient for hydrogen production and renewable require significant investment in renewable energy energy to be co-located.21 The hydrogen would be and other infrastructure. With hydrogen production used locally or transported by dedicated hydrogen expected to scale-up over the 2030s and 2040s, pipelines to end users. ‘Moving molecules’ (rather than modelling for the strategy suggests that the near-term ‘moving electrons’) reduces the need for any further impacts on Australia’s energy systems will be modest. investment and construction of electricity transmission infrastructure with the pipelines also offering a short- To achieve the base production target, around 3 GW to-medium term storage solution (‘line packing’). of electrolyser capacity could be needed by 2030, with this subsequently growing to 150 GW by 2050 Where projects are grid connected, they provide a to achieve 15 million tonnes of production. Hydrogen flexible source of electricity demand and could support production, alongside other trends within the energy storage. Both characteristics may be used to Australian economy (such as electrification of transport support grid stability. and manufacturing), will require a substantial build out of Australian electricity supply. Approximately The land required for hydrogen production is expected 1,200 TWh of electricity could be required across the to be significant but manageable in the context of economy for hydrogen production by 2050.19 Australia’s vast landmass (see Figure ES-1). Analysis by Geoscience Australia for the 2019 National Hydrogen Analysis for the strategy suggests that, as the sector Strategy concluded around 262,000 km2 (or around scales, hydrogen production is likely to shift to the 3% of Australia) of coastal areas is highly suitable for highest quality renewable energy regions where hydrogen production using renewable electricity, with electrolysers are not grid connected.20 This will further prospective locations inland. To put this in enable producers to achieve economies of scale context, achieving the base production target in 2050 and take advantage of low renewable-energy costs, could involve a geographical footprint of less than and low transmission-infrastructure costs. At large 7,000 km2, while achieving the stretch potential could production volumes, there are cost benefits to involve around 14,000 km.22 This level of land use producing hydrogen close to the renewable energy indicates the hydrogen sector could use less than source and subsequently transporting by pipeline 0.2% of the Australian landmass by 2050. to the point of use. This represents a significant opportunity for renewable energy project developers to consider off-grid projects. Where hydrogen is used in value added manufacturing (such as in ammonia, iron or alumina production), there may be advantages for industries to co-locate their facilities with hydrogen production to avoid costs associated with transporting hydrogen.

19 DCCEEW 2023, Australian Energy Statistics, Electricity generation by fuel type 2021-22 and 2022. www.energy.gov.au/publications/australian-energy-statistics-table- o-electricity-generation-fuel-type-2021-22-and-2022

20 Arup 2024, Infrastructure to enable hydrogen industry development – additional scenarios building on the National Hydrogen Infrastructure Assessment, Arup, Australia.

21 Clean Energy Finance Corporation 2021, The Australian Hydrogen Market Study. www.cefc.com.au/insights/market-reports/the-australian-hydrogen-market-study/

22 Estimated geographical footprint is based on CSIRO analysis (unpublished) of land requirements for 35 renewable energy projects, which found an average direct impact area of 23.9 km2/GW for solar renewable energy. The National Hydrogen Strategy estimates assume a 25% capacity factor for solar, and no technology improvements over time. The estimates presented here are of a similar order of magnitude to other published estimates, including ARENA 2023, ULCS: How ultra low-cost solar can unlock Australia’s renewable energy superpower - White paper 2023. https://arena.gov.au/assets/2023/04/the-incredible-ulcs-ultra-low-cost-solar-white- paper.pdf 44 National Hydrogen Strategy 2.2 Cost-competitive hydrogen Analysis for the strategy suggests the current cost production of renewable hydrogen production is in the range of $5-10/kg (equivalent to around US$3-7/kg), but this will fall substantially over the period to 2050 (Figure 5). Hydrogen is an emerging industry, both globally and As more projects come online, lower production costs in Australia, and this contributes to higher production will be driven by falling costs for the major elements costs compared to well established fossil fuel of the hydrogen cost stack, namely renewable energy technologies across a range of industries. However, and electrolysers. By 2050, renewable energy costs the rapid increase in the deployment of large-scale are expected to fall by 40-60%, while electrolyser costs wind and solar photovoltaic generation technologies could fall by 88-94%.23 These expectations accord with in recent years, indicates it is possible to rapidly bring other analyses which indicate hydrogen production down production costs as projects are supported to costs at the ‘farmgate’ are projected to fall below realise scale deployment. US$2/kg by 2050 in many locations,24 positioning Analysis conducted for the preparation of the 2024 Australian projects among global leaders.25 Strategy indicated Australian hydrogen production costs will fall substantially over the coming decades. 12 10 Levelised cost of hydrogen 8 6 ($/kg of hydrogen) 4 2 0 2025 2030 2035 2040 2045 2050 SMR Max AE Max PEM SMR+CCS Min AE Min PEM Figure 5 Levelised Cost of Hydrogen production by method over time Source: CSIRO 2024 Scenario modelling of the production and consumption of hydrogen in Australia. Note: PEM =Proton exchange membrane electrolyser. AE = Alkaline electrolyser. SMR = Steam methane reforming, SMR + CCS = Steam methane reforming + Carbon Capture and Storage.

23 P Graham, J Hayward, J Foster and L Havas, 2023, GenCost 2022-23: Final report, CSIRO, Australia, www.csiro.au/en/research/technology-space/energy/GenCost

24 Arup 2024, Infrastructure to enable hydrogen industry development – additional scenarios building on the National Hydrogen Infrastructure Assessment, Arup, Australia.

25 Other analyses suggest globally competitive production costs are likely to be in the range of US$1-2/kg in 2050. For example, McKinsey and Hydrogen Council 2023, Global Hydrogen Flows – 2023 Update. https://hydrogencouncil.com/en/global-hydrogen-flows-2023-update/ 45 Hydrogen costs delivered to international markets Through the 2024-25 Federal Budget, the Australian will also reflect mid-stream processes, such as Government has provided $5.1 billion to boost transmission, compression and shipping. All suppliers ARENA and support it to develop and commercialise will incur these costs, but some countries will have technologies critical to net zero. This funding includes advantages such as proximity to markets. For example, $1.9 billion over 10 years to support ARENA to the shipping component for Australian exports to continue its core investments in renewable energy and Tokyo are estimated to be comparatively low, meaning related technologies over the long term. hydrogen produced in the United States, Algeria and Chile would need to be around US$0.20/kg of Other institutions, including CSIRO and Australia’s hydrogen (or around 10%) cheaper than Australian universities, are also investing in innovative renewable produced hydrogen to be competitive.26 Other studies, energy technologies. such as the HySupply analysis of an Australia-Germany hydrogen supply chain, have found that shipping Bridging the cost gap – hydrogen distance is not a barrier for Australian exports to production incentives and financing Europe.27 To accelerate the development of Australia’s hydrogen industry, the Australian Government is introducing the Reducing renewable energy costs Hydrogen Production Tax Incentive which will offer a Energy is the largest component of the hydrogen time-limited and demand-driven refundable tax offset production cost stack, representing around 70% of of $2/kg to eligible hydrogen producers. In addition, total production costs. The availability of low-cost $4 billion has been committed to the Hydrogen renewable electricity will be vital to reducing hydrogen Headstart program, to provide revenue support for production costs and ensuring Australia’s hydrogen large-scale early movers. These programs are similar and hydrogen products are globally competitive. to the schemes used in other countries and enable large-scale hydrogen projects to proceed with greater Australia is working to unlock ultra low-cost renewable certainty over future revenue streams energy by targeting technology innovations and (see Box 3). breakthroughs and by driving renewable energy deployment to achieve economies of scale. These measures will help drive deployment, build experience in the Australian hydrogen and finance The Australian Government has announced substantial sectors with large scale projects, and help bridge the support to increase renewable energy deployment, commercial gap. By targeting the ‘green premiums’ such as the Capacity Investment Scheme and that are not yet reflected in market prices, they will Rewiring the Nation. These investments will help to help the current pipeline of projects achieve final scale-up renewable energy supply and reduce costs. investment decision and unlock the next wave of The government is also taking action to address investment. These are key strategic investments that bottlenecks and constraints that can increase project will enable the sector to scale up and ensure Australian costs, such as in supply chains (section 2.4), workforce hydrogen projects are globally cost-competitive. (section 2.5) and regulatory processes (Section 4.2). Technology advances will enable further cost ACTION 2 reductions. ARENA is directing significant investments Provide early policy support to enable towards reducing renewable energy costs. ARENA’s the scaling up of the hydrogen industry ambitious 30-30-30 vision for ultra low-cost solar would deliver 30% solar module efficiency at an to achieve production costs that are installed cost of 30 cents per watt by 2030. competitive with incumbent fossil fuels and to secure early offtake agreements.

26 C Johnston, MHA Khan, R Amal, R Daiyan, I MacGill 2022, Shipping the sunshine: An open-source model for costing renewable hydrogen transport from Australia. International Journal of Hydrogen Energy, Volume 47, Issue 47.

27 R Daiyan, I MacGill, R Amal, H Losch and R Schlogl 2023, Final Report of the Australian German HySupply Project, www.globh2e.org.au/_files/ ugd/8d2898_3aa5c4ede91f4f4e9f70c07df13f4243.pdf 46 National Hydrogen Strategy Box 3: Hydrogen Production Tax Incentive and Hydrogen Headstart Hydrogen Production Tax Incentive The Australian Government announced an initial $2 billion for the Hydrogen Headstart program The Australian Government has committed to a in the 2023-24 Budget. Round 1 of the program new Hydrogen Production Tax Incentive (HPTI) to commenced in 2023. The government committed accelerate the deployment of renewable hydrogen additional funds to the program through the production in Australia. The HPTI will provide 2024-25 Budget, bringing total funding available to time-limited, demand-driven production support $4 billion. The program is administered by ARENA. to eligible renewable hydrogen producers. Taken together, the HPTI and Hydrogen Headstart The HPTI will be delivered through Australia’s tax could together bring online 10 to 20 large-scale system, claimable at a rate of $2/kg of eligible renewable hydrogen projects, with over 5 GW hydrogen produced. Support will be provided of electrolyser capacity producing over 1 million for hydrogen produced between 2027–28 and tonnes of hydrogen per year once operational. 2039–40 to projects that reach final investment These estimates are based on the available data decision by 2030. Each facility will have access to from projects under active consideration and the HPTI for a maximum of 10 years from first represent more than double Australia’s current production. annual hydrogen production from fossil fuel sources. Hydrogen Headstart Bringing online this many projects could unlock Hydrogen Headstart is a competitive program over $50 billion of private sector investment in which will provide revenue support to large- Australia’s emerging hydrogen sector. To put this scale renewable hydrogen projects in Australia, in context, the Grattan Institute has separately over a maximum 10 year period. The program identified that this volume of hydrogen could aims to bridge the commercial gap between the be sufficient to decarbonise the equivalent of production costs and sale price of renewable Australia’s total production of ammonia, alumina hydrogen, or derivative products such as ammonia and iron.28 or methanol. The program complements the support provided through the tax system by the HPTI by providing targeted, time-limited support for a small number of early-mover, innovative projects that face higher barriers to deployment. Australian-based hydrogen projects powered by 100% renewable energy are eligible to apply. Projects must be located at a single site with a minimum electrolysis deployment of 50 MW. The program’s merit criteria emphasises deliverability, project maturity, cost competitiveness, emissions abatement, First Nations engagement and inclusion, and broader benefits to the Australian economy.

28 Grattan Institute 2023, Hydrogen: Hype, hope, or hard work?. https://grattan.edu.au/wp-content/uploads/2023/12/Hydrogen-hype-hope-or-hard-work-Grattan-Institute.pdf 47 The novel nature of renewable hydrogen technology 2.3 Hydrogen infrastructure, adds risk to projects, which is directly proportional to a hydrogen project’s financing cost. Businesses also hubs and precincts noted that the risk of realising a return can mean Developing a hydrogen industry of sufficient scale projects struggle to secure sufficient capital to see to support export industries will require substantial them through early development. For example, front infrastructure investments. As well as port end engineering and design (FEED) studies can cost infrastructure, government investment will be needed tens of millions of dollars. in expanding electricity networks, hydrogen pipelines, The Australian Government has engaged a core transport, water and social infrastructure to support of specialist investment groups that can support regional workforces. hydrogen projects, including the: An immediate priority for the Australian Government • Clean Energy Finance Corporation (CEFC) will be to leverage its hydrogen hub investments • Northern Australia Infrastructure Facility (NAIF) (Box 4). • Export Finance Australia (EFA) Hydrogen hubs support low-cost hydrogen production • National Reconstruction Fund Corporation (NRFC). by concentrating delivery of new infrastructure and enabling firms to: These bodies can provide financing options to support Australia’s hydrogen industry. For example, the CEFC • share the initial costs of supporting infrastructure established the $300 million Advancing Hydrogen • benefit from a skilled local workforce Fund in 2020. To date there have been limited viable investment opportunities, due mainly to a mismatch • encourage collaboration. between investment return, investment risk settings and the maturity of the projects. Box 4: Hydrogen hubs in Australia ACTION 3 The Australian Government is investing more than $500 million to support the development Consider reforms that may further enable of hydrogen hubs in regional Australia. specialist investment groups to play a bigger role in supporting the hydrogen Hydrogen hubs are locations where producers, industry to mature and secure further users and exporters of hydrogen work side by finance through traditional capital side to share infrastructure and expertise. They will help the hydrogen industry springboard to markets. scale by: • lowering the cost of production • encouraging innovation • enhancing skills and training efforts. The Australian Government has announced funding, with co-contributions from industry and state governments, for hub projects in: • the Pilbara and Kwinana in Western Australia • the Hunter in NSW • Bell Bay in Tasmania • Gladstone and Townsville in Queensland • Port Bonython in South Australia. 48 National Hydrogen Strategy There are opportunities to expand hydrogen hubs to a broader precinct model that supports regional • Active engagement by governments with industry and the financing sector can help align policies and decarbonisation. These can incorporate the operations funding mechanisms (both existing and new) and of other sectors that align to the principles included in facilitate investment in line with the masterplans the National Interest Framework. and roadmaps. Shared infrastructure and economies of scale would lower the costs for decarbonising existing facilities ‘Co-location of supply and demand when possible within the region as many heavy industries tend to is one of the best ways to reduce costs. Access to be geographically concentrated.29 Efficient approvals, lower-cost, firmed renewable electricity, a skilled reliable energy, pre-existing infrastructure and workforce, bulk materials handling ports and water port access would be equally advantageous for the resources also have economic benefits.’ hydrogen industry and other new industries seeking - Climateworks Centre to establish in Australia, such as green metals, critical minerals processing and clean energy manufacturing. Governments at all levels would need to work in meaningful partnership to develop expanded ACTION 4 hydrogen hubs connected to other industrial decarbonisation opportunities. This work has Support the integration of hydrogen hubs commenced, but is at an early stage. States and into the broader scoping, planning and territories will play a leading role in driving the development by Australian governments of development of individual precincts. The states and industrial precincts. territories can leverage existing zoning arrangements, such as Strategic Industrial Areas, State Development Australian governments are driving changes to AEMO’s Areas and Special Activation Precincts, while the Integrated System Plan (ISP) to ensure that it can best Australian Government could play a coordinating and support the energy transformation. An expanded ISP enabling role. will consider the ongoing electricity (including firming) needs arising from hydrogen production. It will Leveraging hubs to support wider precincts aligns with also include a more thorough examination of how the role of the Net Zero Economy Authority (NZEA), hydrogen can contribute to the National Electricity which will promote an orderly and positive net zero Market (NEM) and its various system requirements. economic transformation for Australia, its regions, Similarly, PoweringWA has been established to industries, workers and communities. The following coordinate delivery of the electricity infrastructure principles may help guide governments and industry needed to support decarbonisation within the in progressing a precinct-based approach: South West Interconnected System. • Clear governance arrangements, including local industry and government partners, to provide The Western Australian Department of Energy, Mines, Industry Regulation and Safety – Energy Policy WA coordination and leadership in developing is leading the implementation of the Pilbara Energy precincts. Transition Plan which seeks to establish a high voltage • Net zero roadmaps, master planning and precinct-level business cases that assess regional common user transmission network to accelerate decarbonisation, limit impact on country and support capability, hydrogen demand and infrastructure new jobs. This will be facilitated by access to (up to) priorities can help integrate precincts with $3 billion of concessional finance allocated to Western wider energy system planning and industrial Australia under the Rewiring the Nation program. transformation. This can guide the long-term infrastructure build on the supply side to enable private investment on the demand side.

29 Climateworks Centre 2023, Renewable energy industrial precincts: Scaling up industrial decarbonisation through a coordinated approach. www.climateworkscentre.org/wp- content/uploads/2023/05/Renewable-energy-industrial-precincts-Scaling-up-industrial-decarbonisation-through-a-coordinated-approach-May-2023-.pdf 49 The Australian Government undertook the inaugural National Hydrogen Infrastructure Assessment Box 5: National Hydrogen (NHIA)30 over 2021 and 2022, and has commissioned Infrastructure Assessment updated modelling scenarios as part of the strategy (NHIA) development.31 For the sector to scale-up, there will be a need to further mainstream Australia’s hydrogen Modelling for the NHIA, completed in 2023, goals within existing institutions and planning includes a range of scenarios that illustrate the frameworks. In that context, the next NHIA will be optimum infrastructure system for an Australian completed in consultation with other key infrastructure hydrogen production sector. Additional planning agencies, including Infrastructure Australia, scenarios were commissioned as part of the the AEMO and state infrastructure planning agencies. strategy development, which included an additional focus on water infrastructure. Taken With hydrogen hubs providing an anchoring focus for together, these modelling scenarios provide broader precinct-based decarbonisation opportunities, a range of insights regarding the potential the next iteration would benefit from being brought evolution of hydrogen related infrastructure forward and completed over 2025 and 2026. in Australia: Consideration will be given to the need for additional analysis to inform the NHIA, which could include: • Hydrogen production is expected to predominantly follow the electrolysis • hydrogen storage needs for different purposes, timeframes and locations pathway using renewable electricity, although steam methane reforming, with • hydrogen alignment pipeline corridors, easements and route CCS, may play a role during the initial phase of industry growth. • water infrastructure needs, underpinned by the • Hydrogen is initially expected to be produced close to demand locations, but as the sector best available science scales up, production is expected to be • port capability and capacity, shipping routes and refuelling requirements located closer to high-quality renewable energy sources (such as Renewable Energy • heavy transport infrastructure needs. 32 Zones), with hydrogen molecules delivered to demand locations by a network of dedicated ACTION 5 pipelines. Deliver the next iteration of the National • Aarerange of hydrogen storage solutions likely to be required, including short- Hydrogen Infrastructure Assessment over term storage such as tanks, and long-term 2025 and 2026 in consultation with key underground storage in salt caverns and infrastructure planning agencies, with potentially depleted gas fields. subsequent analysis conducted at least every 5 years. • Low water availability may be a barrier to hydrogen development in some parts of Australia, particularly dry inland regions. In other areas, new water infrastructure such as desalination plants, recycling, stormwater harvesting, and pipelines will be needed in the long term.

30 ARUP Australia 2023, National Australia Infrastructure Assessment. www.dcceew.gov.au/sites/default/files/documents/national-hydrogen-infrastructure-assessment- final-report.pdf

31 Arup 2024, Infrastructure to enable hydrogen industry development – additional scenarios building on the National Hydrogen Infrastructure Assessment, Arup, Australia.

32 See separate sections on water (Section 4.3) and long-haul transport (Section 3.3.1) for further discussion of related infrastructure issues. 50 National Hydrogen Strategy Analysis and planning initiatives by state and territory Analysis by Frontier Economics found that converting governments are also informing industry scale-up existing gas transmission pipelines for use with needs. These include: hydrogen costs less than new pipelines.34 As with the • The NSW Hydrogen Infrastructure Masterplan – Modelling Assessment Report NHIA and other analyses,35 the modelling generally found it most efficient to produce hydrogen adjacent to sources of renewable generation and to transport the • Queensland’s Hydrogen Production and Export Opportunities Report. hydrogen to the point of demand through pipelines. In all scenarios hydrogen was being used by some industrial customers for high-temperature heat, as Transporting hydrogen chemical feedstock or for electricity generation. The means by which hydrogen is transported over land Analysis for the updated strategy suggests demand is likely to evolve over time and depend on the end for hydrogen transported by low-level blending use. The NHIA found that hydrogen is most likely to be into distribution networks may be lower than was transported by a combination of road and pipelines in the anticipated through the 2019 Strategy. CSIRO’s scenario near and medium term. Dedicated hydrogen pipelines modelling limited blending to a maximum of 10% will be the most economical means of transporting large hydrogen, but found it was not required for residential hydrogen volumes from around 2040.33 and commercial gas customers in the distribution networks by 2050 (Figure 6). While a subsequent shift Inter-regional shipping of hydrogen within Australia to 100% hydrogen may offer some efficiency, other was not considered under the first NHIA. Issues relating analyses have also concluded that electrification is a to transporting hydrogen by ship are discussed in more prospective decarbonisation pathway for gas Section 2.3.3 and Section 3.3.3. use in buildings. This is due to a range of technical, economic and logistical reasons, with electricity already cheaper for many consumers than gas.36 800 700 Final energy use (PJ) 600 500 400 300 200 100 0 2025 2030 2035 2040 2045 2050 Oil Natural Gas Electricity LPG Hydrogen Biomass Figure 6 Modelled energy use across combined commercial and residential buildings over time indicating there may be little hydrogen used in these sectors Source: CSIRO 2024 Scenario modelling of the production and consumption of hydrogen in Australia, central scenario.

33 ARUP Australia 2023, National Australia Infrastructure Assessment. www.dcceew.gov.au/sites/default/files/documents/national-hydrogen-infrastructure-assessment- final-report.pdf

34 Frontier Economics 2023, Economic analysis of hydrogen blending and conversion, Frontier Economics, Australia.

35 A Pascale, M Tabatabaei, S Smart 2023, Downscaling – Hydrogen and synthetic fuel production, transmission and storage, Net Zero Australia. www.netzeroaustralia.net.au/ wp-content/uploads/2023/04/Downscaling-Hydrogen-synthetic-fuel-production-transmission-storage.pdf

36 T Wood, A Reeve, and E Suckling 2023, Getting off Gas: why, how and who should pay?, Grattan Institute. 51 Australian governments have taken steps to remove Underground salt caverns are likely to be among the barriers to transporting hydrogen by pipeline, where lowest-cost long-term storage options for hydrogen this mode of transport makes sense. Governments in Australia. Salt caverns provide benefits in being have reformed the national gas regulatory framework able to achieve relatively high cycling rates, and an which now provides certainty to hydrogen projects environment free of methane impurities. Depleted by supporting efficient investment in new hydrogen oil and gas fields may provide further potential pipelines. These reforms aim to avoid the risk of underground hydrogen storage options in regions pipeline duplication and give confidence that future where thick salt accumulations have not been shippers will have fair terms for third party access identified or do not exist. While not yet a commercially to hydrogen pipelines. Since the 2019 Strategy, mature hydrogen storage option, depleted gas fields governments have also supported hydrogen blending may have the advantages of being close to existing projects, including some still in development, and infrastructure and potential hydrogen demand-and- these are providing early demonstrations of hydrogen supply locations. production and use in Australia. The Australian Government, through Geoscience The 2024 Strategy is focussing on the most prospective Australia, is investing in the pre-competitive domestic demand sectors for hydrogen-based geoscience needed to identify suitable salt decarbonisation, as outlined in Chapter 3. It will be accumulations and demonstrate viability for important to further consider the hydrogen transport hydrogen storage. Through the 2024-25 Budget, the needs of these demand sectors, including in a hub or government has committed an initial $566.1 million precinct context. over 10 years (and further funding to 2058-59) for the new Resourcing Australia’s Prosperity initiative, which ACTION 6 will enable Geoscience Australia to deliver national mapping of resource potential for critical minerals, The Australian Government will work strategic materials, naturally occurring hydrogen and with the states and territories and other other resources to support the net zero transition. experts to improve understanding of Detailed assessment of national hydrogen storage future hydrogen transport needs to needs will be considered through the next NHIA. This inform the next iteration of the National will consider the benefit of hydrogen storage and the Hydrogen Infrastructure Assessment. need for different types of storage within required scales and timeframes. Hydrogen storage ACTION 7 Hydrogen storage will play an essential role in the hydrogen ecosystem, particularly if hydrogen Support Geoscience Australia’s is to provide long duration electricity system precompetitive data program to identify firming services. For example, the South Australia suitable sites for hydrogen storage Government’s Hydrogen Jobs Plan will see the delivery opportunities. of the equivalent of 250 MW of electrolyser capacity,

200 MW of power generation and renewable hydrogen Australia does not currently have nationally storage in Whyalla by late 2025. Various analyses have consistent regulatory arrangements that adequately indicated the respective roles that different storage address underground hydrogen storage. This is a options can play in the future hydrogen economy, potential impediment to industry and infrastructure including hydrogen tanks, pipeline line-packing and development and means that the community may not long-term geological storage.37,38,39 get a fair return from tenements awarded to private proponents.

37 Frontier Economics 2023, Economic analysis of hydrogen blending and conversion, Frontier Economics, Australia.

38 Arup 2024, Infrastructure to enable hydrogen industry development – additional scenarios building on the National Hydrogen Infrastructure Assessment, Arup, Australia.

39 A Pascale, M Tabatabaei, S Smart 2023, Downscaling – Hydrogen and synthetic fuel production, transmission and storage, Net Zero Australia. www.netzeroaustralia.net.au/ wp-content/uploads/2023/04/Downscaling-Hydrogen-synthetic-fuel-production-transmission-storage.pdf 52 National Hydrogen Strategy ACTION 8 It may be possible to refit existing port infrastructure used for liquefied natural gas (LNG) to suit the Support the establishment of storage of ammonia, when the infrastructure is no fit-for-purpose and nationally consistent longer required for LNG exports.41 However, further regulatory arrangements for the assessment of port infrastructure and capacity to geological storage of hydrogen. bunker is required. The change from one dominant fuel (diesel) to potentially several fuels (biofuels, methanol, ammonia) may also challenge some ports ‘Innovation, deployment and cost reductions in which will need to develop the capacity to store and hydrogen storage can benefit not only the cost handle various fuel types. of producing hydrogen but benefit the electricity market, including all consumers.’ Given the lower energy density of alternative fuels, ships running on these fuels may also need to bunker Iberdrola Australia fuel more frequently. New, and potentially more, ports with the capacity to bunker low-emission fuels, may be required along major trading routes. The impact of Port infrastructure (bunkering and export changing marine fuels on domestic marine operations opportunities) will also be important to consider, and the distribution of hydrogen-based fuels by ship may also be viable for other large sources of demand located close to Global seaborne trade of hydrogen and its derivatives port facilities. is projected to grow to make up to one third of all seaborne energy trade in 2050. Australian ports do not Through Mission Innovation, green shipping currently bunker significant volumes of marine fuels, corridors have been identified and knowledge as ships commonly fuel in Singapore before and after resources developed.42 More detailed study of this visiting Australia.40 However, there is an opportunity opportunity will take place as part of the next NHIA for Australia to capture more of this international and the Maritime Emissions Reduction National bunkering activity due to the inherent lower cost of Action Plan under development by the Department refuelling closer to the point of fuel production. of Infrastructure, Transport, Regional Development, Communications and the Arts.

40 The process of bunkering fuels includes the logistics of storing, loading, and distributing fuel among available shipboard tanks

41 Columbia | SIPA 2020, Zero-Carbon Fuels for Marine Shipping 2020. https://cdn.catf.us/wp-content/uploads/2020/06/21092831/2020_SIPA_Zero-Carbon-Shipping.pdf

42 Mission Innovation 2024, Green Shipping Corridor Hub. https://mission-innovation.net/missions/shipping/green-shipping-corridors 53 ACTION 9 The Net Zero Manufacturing Initiative, recently launched by the NSW Government with funding of Consider the readiness and prospects up to $275 million available in its first round, is an of ports to store and export hydrogen, example of the strategic investments being made at import renewable energy components, the state level to enhance sovereign capabilities in and to provide safe marine refuelling electrolyser manufacturing. using low-carbon liquid fuels such as hydrogen, ammonia and methanol. ‘The Strategy can play a significant role in the establishment of long-term sovereign 2.4 Supply chains manufacturing capability, which will bring the necessary supply chain for the hydrogen industry Producing cost-competitive hydrogen will depend to Australia.’ on affordable access to specialised equipment and InterContinental Energy componentry for electrolysers and renewable energy processing. Australian manufacturing of electrolysers is small but showing promising signs with the opening of new production facilities in Gladstone43 and Port Kembla.44 Stakeholders have reported tight supply ACTION 10 chains for technologies like electrolysers. The IEA Support the development of expects supply chains to improve, with ample supply sovereign clean technology and of solar panels and electrolysers to have emerged emissions-reduction manufacturing by 2030, albeit concentrated in a small number of countries and therefore vulnerable to disruption. industries. A Future Made in Australia envisages Australia The Australian Government is also working with maximising the economic and industrial benefits international partners to build resilient global of the move to net zero and securing Australia’s supply chains. Partnering with other countries, place in a changing global economic and strategic including support for research, development and landscape. This underpins the establishment of commercialisation, as well as enabling direct foreign the Future Made in Australia Innovation Fund, to investment can ensure Australia retains access be delivered by ARENA. This program will provide to the technologies it needs. Australia is actively pre-production support to the industries that align engaged to build supply-chain security through the with the principles included in the National Interest Quad partnership and has bilateral relationships Framework. Australian companies and researchers with a focus on clean energy with the United States, have been at the leading edge in developing Germany, India, Japan, Singapore and the Republic high-efficiency renewable energy and electrolyser of Korea. technologies, and there is an opportunity to build sovereign capability by leveraging this expertise. ACTION 11 This builds on other actions the Australian Identify opportunities that leverage Government is taking to improve supply chains and Australia’s research, development and develop sovereign manufacturing. The National demonstration (RD&D) capabilities Reconstruction Fund Corporation (NRFC) will target to advance hydrogen technology investments in Australian projects that diversify manufacturing in Australia. and transform industry. Of the $15 billion allocated to the NRFC, the government has earmarked $3 billion towards renewables and low emissions technologies, one of 7 priority areas identified for NRFC investment.

43 Fortescue 2024, Fortescue officially opens Gladstone Electrolyser Facility. https://fortescue.com/news-and-media/news/2024/04/08/fortescue-officially-opens-gladstone- electrolyser-facility

44 Hysata 2023, Hysata opens new electrolyser manufacturing facility in Port Kembla with $23m vote of confidence from Australian and Queensland Governments. https://hysata. com/news/hysata-opens-new-electrolyser-manufacturing-facility-in-port-kembla-with-23m-vote-of-confidence-from-australian-and-queensland-governments/ 54 National Hydrogen Strategy 2.5 Workforce Significant investments and new dedicated institutions have been established to identify and address For Australia’s hydrogen industry to be competitive, clean energy workforce needs and bring forward it must be supported by an appropriately skilled the development of a skilled workforce to deliver ‘hydrogen-ready’ workforce. Both governments and Australia’s clean energy and hydrogen ambitions. the hydrogen sector itself will play important roles This includes establishing a national network of in building the local workforce needed for hydrogen

10 Jobs and Skills Councils (JSCs) to provide industry production to scale up. with a stronger, more strategic voice in ensuring the Since 2019, significant work has been undertaken VET sector delivers better outcomes for learners and by governments to understand workforce issues employers. The work of JSCs will include identifying and barriers facing hydrogen and the clean energy skills and workforce needs for renewable energy and transition more generally (Box 6). Jobs and Skills acting as a source of intelligence on issues affecting Australia has identified 3 main pathways to meet the the net zero transition. Powering Skills Organisation, growing demand in the hydrogen and renewables Buildskills Australia, and the Mining and Automotive workforce:45 Skills Alliance, in collaboration with other JSCs whose remit touches on hydrogen, will undertake industry-led • education and training through tertiary education and Vocational Education and Training (VET) work on skills, career pathways and training packages for the clean energy workforce, including for hydrogen systems production and use. • migration specialists of skilled workers and international • supporting workers transition from related fields and fossil fuel-based industries.

45 Jobs and Skills Australia 2023, The Clean Energy Generation. www.jobsandskills.gov.au/publications/the-clean-energy-generation. In particular, see Figure 4.1 in Section 4a on page 102. 55 Other investments and institutions include: • Working with AFAC, the Australian and New • The Net Zero Economy Authority (once established), which will support workers to access Zealand National Council for fire and emergency services, to develop pilot training material for new employment, or to acquire skills to improve critical incident first responders. their employment prospects. • Wider investments to strengthen the VET sector • Jobs through the National Skills Agreement. 46 and Skills Australia (JSA), which provides independent advice and information on current, States and territories have announced measures and emerging and future skills needs across the strategies specific to their jurisdictions, such as: economy. • Support for capital-intensive and fit-for-purpose • Queensland’s Hydrogen Industry Workforce Development Roadmap 2022-2032 training facilities through VET facility upgrades and by co-investing with Victoria in a Hydrogen • Victoria’s Hydrogen Hub’s (VH2) Hydrogen Skills Roadmap and Hydrogen Energy Worker Training Technology and Skills Training Centre. Centre • Establishment of the Building Women’s Careers program to advance structural and cultural change • South Australia’s Hydrogen Workforce Taxonomy to improve women’s access to flexible and inclusive and Roadmap vocational education and training opportunities. • NSW’s Hydrogen Centre of Excellence. • The Australian Government’s New Energy Apprenticeship Program, which supports the clean energy workforce in the hydrogen and renewable manufacturing sectors.

46 DEWR 2023, National Skills Agreement. www.dewr.gov.au/skills-reform/national-skills-agreement 56 National Hydrogen Strategy ACTION 12 ‘The production of green hydrogen for the purposes of powering manufacturing with clean, Support workforce development initiatives renewable sources of energy, and the manufacture at all levels of government in line with of clean hydrogen technologies themselves, responsibilities, with reference to analysis present enormous opportunities to aid Australia’s and guidance from key institutions advanced industrial transformation and build entire domestic industries and sectors around including the Department of Employment major export opportunities.’ and Workplace Relations, Jobs and Skills Australian Manufacturing Workers’ Union Australia, and the Jobs and Skills Councils. Governments will continue to consider hydrogen Box 6: Australia’s hydrogen workforce needs, including through the National workforce needs Energy Workforce Strategy. Among other things, that The ‘Clean Energy Generation’ report by Jobs strategy will consider Australian, state and territory and Skills Australia (released in 2023) examined government coordination on energy workforce issues. Australia’s current clean energy workforce and Key institutions, including Jobs and Skills Australia and what it needs to look like to ensure it grows at the Jobs and Skills Councils can also provide workforce the pace and scale required. The report identi- analysis, industry intelligence, guidance and support fies the risk of a shortfall of VET qualified work- in relation to identifying and addressing skills and ers, especially amongst electricians and other training needs. VET qualified workers. Australia will need ap- Jurisdictions could also consider what additional proximately 26,000 to 42,000 more electricians actions may be required to support hydrogen by 2030, and the clean-energy supply workforce workforce mobility, such as work on mutual will likely need to grow from approximately recognition arrangements for hydrogen-related 53,000 workers currently to 84,000 by 2050. job areas. To maximise national consistency, there The ‘Developing Australia’s hydrogen workforce’ will need to be an ongoing focus on improving report delivered by PwC for the then Australian transparency of training development and work Industry and Skills Committee (released to strengthen linkages, both internally between in 2022) estimated that, if Australia was to governments and externally with business and produce 2.5 million tonnes of hydrogen in 2030, relevant professional organisations. it would require between 13,150 and 16,050 full Importantly, governments cannot build this workforce time employees across 46 existing roles. The alone. Looking ahead, there will be an expectation report noted that existing roles will need to be that hydrogen businesses adopt a leadership role by augmented to undertake hydrogen activities. investing in the development of workforce capacity, It was not expected that many roles will require capability and expansion. The Community Benefit significant upskilling or retraining to engage Principles that will be applied to Future Made in in the hydrogen economy. Nevertheless, Australia support include the promotion of safe, some action will be required with the report secure and well-paid jobs and investment in training identifying 26 hydrogen-specific capabilities and skills development. that fall within these roles of which only 15% were assessed as having sufficient coverage within the education and training system. This report estimated the most in-demand roles will be for engineers, technicians and tradespersons. 57 2.6 Research and innovation The Australian Government provides significant support for hydrogen-related RD&D to research Innovation will play an important role for Australian institutions, including CSIRO, Australia’s universities hydrogen producers to be competitive. Australia is a and cooperative research centres. A number of demonstrated global innovation leader in developing institutions, most notably ARENA, direct funding ‘game changing’ ultra efficient electrolysers using a towards the Australian Government’s renewable variety of technologies, direct solar catalysts and the energy RD&D priorities. ARENA has recently been electrolysis of sea water. provided with $1.9 billion for ongoing delivery of its core function to fund the development, CSIRO’s review of Australia’s hydrogen RD&D commercialisation, manufacture and deployment of ecosystem found that there is limited targeted new renewable energy technologies. This work will support for projects aimed at advancing hydrogen be further expanded through the newly established technologies at technology readiness levels (TRLs) Future Made in Australia Innovation Fund through in the range 4–6 (Figure 7).47 Such projects tend to which ARENA will unlock private capital across be higher risk and high cost, and therefore are often new industries like green metals and low carbon underinvested in by the private sector. More targeted liquid fuels. support for TRL 4-6 would act to accelerate the commercialisation of hydrogen technology innovations The government also encourages private sector in Australia, rather than overseas. This could in turn investment in research through tax offsets provided stimulate the development of hydrogen technology for under the Research and Development Tax and component manufacturing in Australia. Incentive. States and territories also operate a range of programs and partnerships focussed on This aligns with the Australian Government’s Future hydrogen research partnerships. Made in Australia policy agenda to build our sovereign manufacturing base, broadening and diversifying Australia’s economy and creating jobs for local, highly trained workers. Technology Readiness Levels

9 System Test, Launch and Operations 8 System / Subsystem Development 7

6 Technology Demonstration 5 Technology Development 4

3 Research to Prove Feasibility 2 Basic Technology Research 1 Figure 7 Technology Readiness Levels (TRLs)

47 CSIRO 2024 Review of priority technologies and RD&D for Australia’s hydrogen industry development, CSIRO, Australia. 58 National Hydrogen Strategy ACTION 13 The Australian Government has explored opportunities to build high value international RD&D collaboration Australia will seek opportunities to with partners overseas. This includes the $5 million increase RD&D investment in the TRL International Hydrogen Research Collaboration 4-6 range through programs and grants, Program, which sent delegations of Australian including through ARENA. hydrogen experts to leading hydrogen research institutions in the United Kingdom, Germany, the United States, France, Japan, Singapore, and the ‘Government can play a valuable role in partnering Republic of Korea. The India-Australia Green Hydrogen with the private sector on R&D activities. An Taskforce may also identify additional opportunities excellent case study in this type of support is the for hydrogen trade and collaboration in research. UK offshore wind sector, which benefited from multiple government agencies supporting ACTION 14 different aspects of research and supply chain development.’ Identify opportunities to work with ENGIE partners on RD&D and position Australia at the forefront of international hydrogen- related research collaboration. Export Heavy Industry Heavy Road Mobility RD&D that optimises domestic RD&D will be critical to de-risking RD&D in hydrogen distribution (e.g. and international common use the use of hydrogen as a feedstock road and pipeline) and refuelling infrastructure (e.g. distribution for chemicals production (e.g. infrastructure (e.g. compression and conversion assets, domestic ammonia and hydrogen derivatives) and dispensing technologies) can ports and international import and the use of hydrogen help reduce costs as refuelling terminals). for combustion to produce infrastructure networks are rolled- high-temperature process heat for out - particularly in support of minerals processing. Australian heavy freight needs. Hydrogen Production and Storage • RD&D in electrolysis, biomass and waste conversion (to fuels and chemicals), fossil fuel conversion (with CCUS) and natural hydrogen production will diversify hydrogen production pathways, help to alleviate pressure on supply chains and support a greater number of end-use cases. • RD&D in compression and liquefaction, underground storage, advanced materials, and hydrogen carriers can help minimise storage costs and requirements to create region-specific, competitive storage options, in addition to existing commercial hydrogen storage options. Hydrogen Technology Manufacturing The manufacture of hydrogen technologies is an emerging global industry creating an opportunity for Australia, but near-term action is required to maximise Australia’s prospects of becoming a leading manufacturer of hydrogen technologies (e.g. electrolysers) and specialised hydrogen components (e.g. end-use separation and purification materials). Actions could support local operations and maintenance capability development and address supply chain risks. Figure 8 Opportunities to advance hydrogen through research and development and subsequent manufacturing opportunities Source: CSIRO 2024 Review of priority technologies and RD&D for Australia’s hydrogen industry development. 59 60 National Hydrogen Strategy 3. Using hydrogen to decarbonise Australian industries and exports 3.1 Targeting the most Key points prospective opportunities • Hydrogen, and other commodities such as green metals and low carbon liquid fuels that A Future Made in Australia identifies the importance will likely rely on hydrogen, are prioritised in of the hydrogen sector due to hydrogen’s potential the Future Made in Australia package. to contribute to domestic decarbonisation, economic • Hydrogen will provide a foundation for new value-added ‘green’ export manufacturing resilience, and domestic security. The renewable hydrogen sector is a priority in the Future Made in industries, with the most prospective being: Australia package. – ammonia Analysis and consultation conducted for the strategy – iron considered the most prospective use cases for hydrogen in Australia. This analysis reinforces – alumina. that Australia can capture significant economic • Domestic users will also benefit from the growth of Australian large-scale export- opportunities and contribute to global decarbonisation by focusing support on large-scale hydrogen focused hydrogen production, which will production to underpin the following new green reduce costs and build supply chains. This will export facing industries: enable hydrogen to play an important role in Australia’s decarbonisation, with the most • ammonia prospective domestic use sectors being: • iron – heavy road freight • alumina. – long-haul transport (aviation, shipping) These sectors align with Australia’s comparative – power. advantages, and with the right support can be • Future Australian Government policies and programs to support hydrogen production internationally competitive. There is strong confidence that global demand for and use will reflect these priorities. Hydrogen these green commodities will emerge in the coming production incentives will reduce costs and years and decades, noting many customers in key increase supply and availability, which will help markets have adopted long-term decarbonisation drive hydrogen adoption, including by many goals. Similarly, there is a growing consensus that safeguard facilities. hydrogen will play a role in decarbonising these • Governments can help overcome hydrogen deployment barriers and bring forward use industries. Both in Australia and overseas, businesses and researchers are working actively to advance by supporting infrastructure development or technologies that use hydrogen to decarbonise these RD&D. industries. A Future Made in Australia points to the benefits associated in developing these domestic manufacturing industries to ensure resilient supply chains and minimise the impact of future global supply chain shocks such as those experienced during the COVID-19 pandemic. Key measures announced through the Future Made in Australia Budget package will support these industries, such as by: • reducing the cost of hydrogen as a major input to production (for example, through the Hydrogen Production Tax Incentive or expanded Hydrogen Headstart program), 61 • research and innovation (for example, through the Future Made in Australia Innovation Fund), or Hydrogen also represents an important decarbonisation technology for: • investments in the enabling environment specific • heavy road freight to those sectors (for example, through the expansion of the Guarantee of Origin scheme to • long-haul transport (aviation, shipping) include green metals). • power. While important to our decarbonisation pathway, the ACTION 15 scale of demand is likely to be smaller than for the Prioritise support for the development of large-scale export-facing sectors. Australian hydrogen for use in prospective Domestic sectors will benefit from growing Australian export-facing industries, particularly green export-focussed hydrogen production through large- ammonia, iron and alumina. scale projects that drive sector-wide cost reductions and supply chain development. Governments can further enable hydrogen use in these domestic ‘The processes that appear to hold the greatest sectors with targeted support or actions to overcome benefits for more immediate “no regrets” barriers or bottlenecks, and through investments in planning and investment include iron, ammonia, research and innovation that bring forward technology methanol and alumina. This is because each of development. these sectors is more dependent on hydrogen for decarbonisation and can also drive large sources of ACTION 16 demand. These are scalable markets and support both direct and indirect growth in jobs.’ Work with industry to understand barriers Australian Hydrogen Council and challenges to hydrogen adoption in prospective domestic sectors, including in the context of developing sectoral decarbonisation plans for energy, industry and transport. Hydrogen as a source of energy or feedstock H2 Large-scale Sectors where hydrogen export-facing may be needed for industries: decarbonisation: Ammonia Heavy road freight Iron Long-haul transport (shipping/aviation) Alumina Power Figure 9 Prospective use cases for hydrogen in Australia 62 National Hydrogen Strategy a) Mt 0 2 4 6 8 10 12 14 16 2030 2035 2040 2045 2050 Hydrogen for domestic use and production of other export products Exports of hydrogen and ammonia as an energy carrier Mt b) 0 1 2 3 4 5 6 2030 2035 2040 2045 2050 Alumina Aviation Road - Freight Iron and Steel Ammonia Rail Shipping Road - Passenger Other chemicals Mining Other manufacturing Figure 10 CSIRO-modelled hydrogen demand over time, showing (a) hydrogen production for exports vs domestic use (including for manufacturing), and (b) domestic hydrogen use by subsector Source: CSIRO central scenario. Note: CSIRO’s modelling assumes around 10 million tonnes per year of hydrogen energy exports in 2050 in the central scenario. The balance between this and exports of hydrogen embedded in green metals and chemicals produced by new facilities could change, and will likely be determined by global market developments. 63 Over time, demand for hydrogen by these industries is expected to increase as firms internalise the cost of Box 8: Safeguard Mechanism and emissions in fossil fuel incumbents. This will be steered hydrogen both by regulatory requirements and customer, investor and shareholder demands. Many companies The Safeguard Mechanism is the key policy to have already adopted ambitious emissions goals or reduce emissions from Australia’s industrial will be seeking to export to countries demanding sector and will be a driver for domestic low-emissions fuels or feedstocks. The Safeguard hydrogen demand. It sets legislated limits Mechanism will play an important role in supporting known as baselines on the greenhouse gas this shift over time, including through the adoption of emissions of Australia’s largest industrial hydrogen (Box 8). facilities. These emissions limits will decline, predictably and gradually, on a trajectory consistent with achieving Australia’s emission reduction targets of 43% below 2005 levels by Box 7: Australia’s Carbon Leakage 2030 and net zero by 2050. Review and hydrogen The Safeguard Mechanism covers many Australia and many other countries are existing users of fossil fuel-based hydrogen, stepping up efforts to tackle climate change, including major ammonia producers and oil but the level of ambition differs between refineries, and may incentivise those sectors to jurisdictions. This creates the potential for switch to hydrogen. Other Safeguard facilities production to shift from countries with more may see hydrogen as a prospective option for ambitious emissions reduction policies to those industrial heat or feedstock. Analysis for the with less robust emissions reduction policies, department’s emissions projections suggest potentially resulting in increased global that Safeguard facilities could drive demand emissions. This risk can create a disincentive of 0.03-0.3 million tonnes of hydrogen by 2030 for Australian projects to bring forward the and 0.2-0.6 million tonnes of hydrogen by 2035. adoption of technologies, including those using hydrogen. The Safeguard Mechanism provides a regulatory obligation to manage and reduce The Australian Government is undertaking emissions, which will help drive hydrogen a review, led by Professor Frank Jotzo, of adoption by some facilities. In addition, additional policy options to address carbon the Australian Government is focused on leakage, including considering the feasibility supporting prospective sectors to adopt of an Australian Carbon Border Adjustment hydrogen and potentially bring forward Mechanism (CBAM), particularly in relation to hydrogen use to create spill-over benefits steel and cement. for broader hydrogen industry development. Hydrogen production incentives will help enable this by reducing hydrogen costs and increasing supply and availability. Facilities not covered by the Safeguard Mechanism may also be able to access incentives to reduce their emissions by switching to hydrogen, through the Australian Carbon Credit Unit (ACCU) Scheme. Those ACCUs can then be sold to private sector buyers and governments to generate income. 64 National Hydrogen Strategy 3.2 Hydrogen to underpin This includes: large-scale export-facing • up to $47.5 million in ARENA funding for the Yuri green ammonia demonstration project in the sectors Pilbara Green ammonia • $70 million Australian Government contribution to the Hunter Valley Hydrogen Hub Project through the Regional Hydrogen Hubs program, Ammonia is a globally traded commodity and is complemented by $45 million in NSW Government the largest consumer of fossil-fuel-based hydrogen funding. in Australia. It is a key input to fertiliser, chemical production and explosives, and is being trialled Five out of six shortlisted projects under the first globally as a fuel for both electricity generation and round of the Hydrogen Headstart program involve the marine transport. production of hydrogen for ammonia. The Hydrogen Production Tax Incentive and the additional funding The IEA anticipates significant growth in global for Hydrogen Headstart will further incentivise demand for clean ammonia.48 Ammonia is versatile, investments in Australian clean ammonia projects. The having applications both as a feedstock or fuel. Safeguard Transformation Stream of the Powering the Ammonia is also an efficient transport vector for Regions Fund is also available to support ammonia hydrogen (noting it has lower energy needs to achieve plants to decarbonise. liquefaction compared to liquid hydrogen). For these reasons, most announced hydrogen export projects – around 80% of potential global production for export ‘Prioritising the decarbonisation of ammonia – are prioritising ammonia for transporting hydrogen. production is indeed a promising strategy for Many of the large-scale hydrogen developments in achieving both hydrogen industry growth and Australia’s project pipeline are targeting ammonia for industrial decarbonisation in the short-term. export, particularly to Japan and the Republic of Korea. However, it is important to note it should be part of a broader approach that includes promoting the Prioritising clean ammonia will help scale-up use of hydrogen in other sectors as well, such as Australian hydrogen production and activate the transport, energy, and steel production.’ broader industry by developing supply chains and building experience and familiarity with new Business Council for Sustainable Development technologies. Large-scale clean ammonia production Australia could also enable an Australian green fertiliser industry. The existing Australian ammonia industry, which Green iron supplies both domestic and export consumers, uses Australia, the world’s largest iron ore producer and around 420 thousand tonnes of grey hydrogen per exporter,49 should play a leading role in decarbonising year across 7 facilities. This production accounts for the iron and steel industry. As highlighted in A Future around 4 million tonnes of Australia’s annual carbon Made in Australia, we have significant comparative dioxide emissions. Replacing grey hydrogen is the only advantages, including world-leading iron ore reserves, pathway for decarbonising this industry. renewable energy resources and a highly skilled The Australian Government will continue to work with resources sector. These position us to be a leading the sector to enable the transition to clean ammonia. global supplier of low-emissions iron to domestic and Significant funds have already been awarded to key global markets. Increasing Australia’s onshore value- projects to support capital costs and infrastructure. adding of our commodity exports to produce green metals is a prospective and relatively low-cost pathway to indirectly export Australia’s renewable energy resources.

48 IEA 2023, Global Hydrogen Review 2023. www.iea.org/reports/global-hydrogen-review-2023

49 DISR 2023, Resources and energy quarterly December 2023. www.industry.gov.au/publications/resources-and-energy-quarterly-december-2023 65 Hematite is mined predominantly in the Pilbara ‘Of Australia’s clean energy export opportunities, and comprises the bulk of Australia’s iron exports. the largest and most economically viable appears Production processes utilising hematite for DRI to be using renewable hydrogen to produce ‘green’ require further research and development to be (near zero-emissions) iron and steel.’ commercially viable.52 This will be a strong focus of Grattan Institute a recently announced collaboration between major Australian mining operators BHP and Rio Tinto and the steelmaker Bluescope.53 Alternative technologies under development can make use of either crushed Using locally produced hydrogen in the production hematite or magnetite ores in a fluidised bed reactor of green iron (and other green metals) can deliver in combination with hydrogen, or with a mix of natural cost and emissions benefits compared to a scenario gas and hydrogen. where the iron ore and energy are shipped separately to international destinations. This is a significant As renewable energy and hydrogen production advantage for Australia, given our renewable energy costs fall, hydrogen may also substitute for existing and resource endowments. The Net Zero Australia natural gas use in wider processes within iron modelling project found that onshoring Australia’s production plants. energy exports using hydrogen offers significant efficiency gains from avoiding the conversion of In the long-term, there may be opportunities for hydrogen to an exportable form, but instead using Australia to integrate its green iron capacity into an it directly in clean mineral processing – iron ore expanded steel manufacturing industry. reduction, alumina refining and aluminium smelting.50 In line with these opportunities, the Australian Established industrial processes, such as direct Government has committed $18.1 million over 6 years reduced iron (DRI) production can use green hydrogen from 2024–25 for foundational initiatives to expedite to replace fossil fuels. Such a step up in manufacturing the emergence of Australia’s green metals industry. will require access to the right type of iron ore. This will be achieved through enhanced industry and Magnetite represents 38% of Australia’s economic research collaboration, exploration of opportunities demonstrated resources of iron ore (primarily located to improve the use of Australian scrap metal and in Western Australia and South Australia) and is undertaking further consultation on incentives to presently well suited to existing direct reduction support the production of green iron, steel, alumina processes.51 With existing magnetite mines, steel- and aluminium. The government has also committed making facilities, and magnetite deposits that are to expanding the Guarantee of Origin scheme to amongst the largest in the world, the South Australian incorporate green metals, including iron, steel and Government is actively investigating the development aluminium (Section 5.3). of a hydrogen-based DRI plant to be established before the end of the decade.

50 D Davis, A Pascale, A Vecchi, B Bharadwaj, R Jones, T Strawhorn, M Tabatabaei, M Lopez Peralta, Y Zhang, J Beiraghi, U Kiri, O Vosshage, B Finch, R Batterham, R Bolt, M Brear, B Cullen, K Domansky, R Eckard, C Greig, R Keenan, S Smart, 2023, Net Zero Australia – Modelling Summary Report. www.netzeroaustralia.net.au/wp-content/ uploads/2023/04/Net-Zero-Australia-Modelling-Summary-Report.pdf

51 Geoscience Australia 2020, Australia’s Identified Mineral Resources 2020 – Commodity Summaries – Iron Ore. www.ga.gov.au/digital-publication/aimr2020/commodity- summaries#iron-ore-section

52 Climateworks Centre and Climate-KIC Australia 2023, Pathways to industrial decarbonisation: Positioning Australian industry to prosper. www.energy-transitions.org/ publications/pathways-to-industrial-decarbonisation/

53 BHP 2024, Australia’s leading iron ore producers partner with BlueScope on steel decarbonisation. www.bhp.com/news/media-centre/releases/2024/02/australias-leading- iron-ore-producers-partner-with-bluescope-on-steel-decarbonisation 66 National Hydrogen Strategy Credit: Rio Tinto. Rio Tinto Yarwun Alumina Refinery. Green alumina The Australian Government has identified green metals as a priority industry in the Future Made in Australia is the world’s largest exporter of alumina, Australia package and has supported projects to trial currently producing around 20 million tonnes of hydrogen use in high-temperature applications. This alumina per year. Australia’s alumina refining industry includes ARENA’s $32.1 million contribution to the uses natural gas for calcination and is estimated to first-of-a-kind pilot project to trial hydrogen calcination be responsible for about 15 million tonnes of carbon technology at Rio Tinto’s Yarwun refinery, near dioxide emissions a year, or 3% of Australia’s total Gladstone.57 ARENA’s 2022 roadmap for decarbonising emissions.54 Hydrogen use in high-temperature Australian alumina highlights near-term opportunities calcination could reduce refining emissions by around for hydrogen use in the calcination process and is 30%.55 Global demand for aluminium (and therefore informing its ongoing investments.58 alumina) is expected to grow through the energy transition due to its use in various low-emissions technologies.56 ‘There is a need for government support for early adopters of decarbonised industrial heat so they Both hydrogen and electrification may play roles can start to develop business cases for change and in decarbonising alumina production. Depending manage financial and/or technology risks.’ on location, hydrogen calcination technology could Australian Hydrogen Council involve lower upfront capital expenditure as it can be cheaper to retrofit to existing plants than electric calcination. However, reducing the cost of hydrogen as a fuel will be important, noting that operating costs Hydrogen is also prospective for other high- could otherwise be higher than electric calcination. temperature heat and chemical applications including green metal processing in established industries, such as copper and zinc, and for new critical minerals industries. An initial focus on alumina will also have cross benefits for these industries.

54 Emma Herd, Dr Steve Hatfield-Dodds 2023, The energy super power opportunity: Can Australia seize the advantage in a net zero world?, Ernst & Young Australia. www.ey.com/en_au/sustainability/the-energy-superpower-opportunity

55 Emma Herd, Dr Steve Hatfield-Dodds 2023, The energy super power opportunity: Can Australia seize the advantage in a net zero world?, Ernst & Young Australia. www. ey.com/en_au/sustainability/the-energy-superpower-opportunity

56 IEA 2030, The Role of Critical Minerals in Clean Energy Transitions. https://iea.blob.core.windows.net/assets/ffd2a83b-8c30-4e9d-980a-52b6d9a86fdc/ TheRoleofCriticalMineralsinCleanEnergyTransitions.pdf

57 ARENA 2023, Yarwun Hydrogen Calcination Pilot Demonstration Program. https://arena.gov.au/projects/yarwun-hydrogen-calcination-pilot-demonstration-program

58 Deloitte 2022, A Roadmap for Decarbonising Australian Alumina Refining. Final report prepared for ARENA by Deloitte, https://arena.gov.au/assets/2022/11/roadmap-for- decarbonising-australian-alumina-refining-report.pdf 67 3.3 Hydrogen to support Heavy road freight Australia’s net zero pathway Hydrogen as a fuel is prospective for Australia’s heavy duty and linehaul road freight transport sector. Transport was responsible for 21% of Australia’s Scenario modelling for the strategy suggests hydrogen emissions in 2023. The decarbonisation pathways use in heavy freight could scale-up by around 2035 are expected to vary across different segments of the and represent almost half of final energy use by 2050 industry. For example, battery electric vehicles (BEVs) (Figure 13). The potential advantages of hydrogen in are currently the leading means of decarbonising light heavy freight include: and medium-sized road vehicles. However, the use of hydrogen fuel cells, or of hydrogen as a feedstock • much shorter refuelling times, being especially important where time-cost is of key importance for ammonia, methanol or synthetic transport fuels, offers advantages to heavy vehicles in the road, air and marine transport sectors. The low-carbon liquid • payload advantages compared to carrying large, heavy batteries fuels sector aligns with the principles included in the Australian Government’s National Interest Framework. • greater range between refuelling stops Hydrogen may also play a role in Australia’s future • reduced need for significant upgrades to electricity infrastructure at depots to facilitate charging or power sector. fast charging loads. a) 0% 20% 40% 60% 80% 100% 2025 2030 2035 2040 2045 2050 b) 2025 2030 2035 2040 2045 2050 Blended biofuels Biofuels Natural gas Petrol Diesel Electricity Hydrogen LPG Figure 11 Proportion of final energy use in the (a) road transport and (b) road freight sectors Source: CSIRO 2024 Scenario modelling of the production and consumption of hydrogen in Australia, central scenario. 68 National Hydrogen Strategy The sector is important to the Australian economy and, Analysis from the CEFC59 and more recently from the like all sectors, will need to reduce emissions to meet iMove CRC60 found hydrogen fuel cell electric vehicle our net zero target. Through targeted investments in (FCEV) trucks may be competitive with diesel vehicles technology, enabling infrastructure and regulation, and BEVs in the near future, but noted the need to governments can help industry identify and prepare resolve: for the most prospective pathways in different applications. • supply from manufacturers of a variety of large trucks to suit Australia’s freight needs and in quantities that can create fleet sizes that justify the hydrogen distribution and refuelling infrastructure Box 9: Hydrogen and electrification in an Australian transport • supply of FCEV trucks that meet industry standards for reliability and have acceptable range context To inform the preparation of the strategy, • proof of fuel consumption and operational cost benefits • low-cost hydrogen distribution CSIRO undertook analysis with its Transport Network Strategic Investment Tool (TraNSIT) to understand the proportion and emissions • appropriate vehicle applications that provide operational benefits versus BEV alternatives. footprint of Australia’s articulated heavy road freight that might be difficult to decarbonise via Existing efforts and investment by Australia’s electrification. governments are helping to overcome such Articulated heavy road freight contributes 13% challenges. For example, the Australian Government of Australia’s transport emissions, or 2.5% of has made up to $80 million available through the our total emissions. The analysis found that Driving the Nation Fund for Hydrogen Highways, to be 15% of all articulated heavy road freight trips matched by co-investments from state and territory modelled in TraNSIT are more than 350 km but governments. This program aims to roll out hydrogen represent over 60% of the annual CO2 emissions refuelling networks on key freight routes. The from modelled articulated heavy road freight. Australian Government, through ARENA and several state governments, has also funded trials of back to While TraNSIT only models a sample of all base applications.61 articulated trips and 350 km is a simplified measure of current battery electric Transport related regulatory reform has been a strong vehicle range, this analysis reinforces that focus, including the development of a National Code of decarbonising the transport sector will likely Best Practice for hydrogen refuelling, and progressive rely on a range of technologies operating in reforms to vehicle mass and width regulations to parallel. The exact mix remains uncertain. enable Australia to import a greater range of new As well as trip length, other factors like vehicle technologies. tonnage, road quality and gradient, and Hydrogen is versatile and provides potential logistical challenges (such as the availability of decarbonisation pathways for other land transport recharging infrastructure at loading/unloading applications. For example, rail transport is another locations) may make hydrogen prospective for heavy transport sector that has shown some promise freight routes. Conversely, future advances in in relation to the use of hydrogen fuel cells.62 battery and recharging technologies may make BEVs prospective for longer routes.

59 Clean Energy Finance Corporation 2021, The Australian Hydrogen Market Study. www.cefc.com.au/insights/market-reports/the-australian-hydrogen-market-study 60 iMove CRC 2023, Prospects for decarbonising freight transport in Australia. https://imoveaustralia.com/wp-content/uploads/2024/05/Prospects-for-decarbonising-freight- transport-in-Australia.pdf

61 For example, Viva Energy Australia 2022, Hydrogen transport future for Geelong. www.vivaenergy.com.au/media/news/2022/hydrogen-transport-future-for-geelong, and; Renewables, Climate and Future Industries Tasmania 2023, Hydrogen Bus Trial. www.recfit.tas.gov.au/what_is_recfit/green_hydrogen/bus_trial

62 R Knibbe, D Harding, E Cooper, J Burton, S Liu, Z Amirzadeh, R Buckley and PA Meehan 2002, Application and limitations of batteries and hydrogen in heavy haul rail using Australian case studies, Journal of Energy Storage. https://doi.org/10.1016/j.est.2022.105813 69 Hydrogen provides a promising sustainable aviation ‘Decarbonisation of the transport sector will mostly fuel (SAF) feedstock – jet fuel made from renewable occur through widespread adoption of battery sources rather than fossil fuels. As a feedstock, electric vehicles. However, hydrogen is likely to hydrogen treatment or hydrogenation converts have a role in decarbonising transport in use cases synthetic fuel feedstock into a product with a with high vehicle utilisation, long distances, and molecular structure that is equivalent to fossil fuels high loads, and especially use cases that have a but with improved performance and emissions. combination of all three’ Hydrogen electric fuel cells (suited to shorter-haul Grattan Institute flights) and direct combustion of hydrogen in turbine engines (larger, medium-distance flying) are also being considered and trialled globally to enable hydrogen powered applications. ACTION 17 Analysis informing the strategy suggests using Support the targeted use of hydrogen hydrogen to make synthetic air fuels may be a for transport, either through direct use prospective option for aviation in the medium and in hydrogen fuel cell vehicles or as a long-term. In the near-term, there is a role for low-carbon feedstock for the production government to support early-stage RD&D to: of low carbon liquid fuels, alongside support for other pathways like • work through technical challenges and prove commerciality electrification and alternative fuels. • consider future aviation demand in planning for infrastructure at airports and connections with Aviation hydrogen hubs. Low-carbon liquid fuels based on hydrogen will play The Australian Government has committed a significant role in decarbonising the aviation sector, $20.9 million over 4 years from 2024–25 (and which generates around 2.5% of the world’s carbon $1.2 million per year ongoing) to undertake further emissions. Under the IEA’s net zero by 2050 pathway, consultation on incentives to support the production hydrogen could comprise 37% of the international of, and demand for, low-carbon liquid fuels. The aviation sector’s final energy consumption by funding will also assist in the development of a 2050, underscoring its potential decarbonisation low-carbon liquid fuels certification scheme through importance. the Guarantee of Origin scheme. The government will also look for opportunities for industry partnership and collaboration, noting hydrogen use in aviation will also be considered through the Australian Government’s Transport and Infrastructure Net Zero Roadmap and Action Plan, the Australian Jet Zero Council, and the Aviation White Paper currently under development.63

63 L.E.K. Consulting Australia Pty Ltd (“L.E.K.”) 2023, Scenario Analysis of the Future of Australian Aviation. Final report prepared for the Department of Infrastructure, Transport, Regional Development, Communication and the Arts, www.infrastructure.gov.au/sites/default/files/documents/aviation-white-paper-scenario-analysis- september-2023.pdf 70 National Hydrogen Strategy Shipping and bunkering The IEA considers green ammonia will be the most widely used fuel in 2050, although shipping companies Shipping emissions make up almost 3% of global currently appear to be favouring vessels that can be carbon emissions. Hydrogen and its derivatives powered by methanol and bio-methane as drop-in (particularly ammonia and methanol) are prospective fuels. Australia is currently developing a Maritime fuels for long-distance shipping (see Figure 12). Emissions Reduction National Action Plan, which can Electrification is expected to remain impractical for support or complement the use of ammonia (and long-haul voyages and there are few alternative hydrogen) as a shipping fuel. The plan will: low emissions options. • set strategic direction for both domestic and international emissions-reduction in the The International Maritime Organization (IMO) regulates emissions for global shipping. The revised maritime sector IMO Greenhouse Gas (GHG) Strategy, adopted in July 2023, has set interim emissions targets for • facilitate the establishment of green shipping corridors from Australia. international shipping for 2030 and 2040, with a goal to reach net zero by or around 2050.64 The IMO GHG Strategy has also set interim targets for adopting zero ‘Green fuels can decarbonise hard-to-abate sectors or near-zero GHG emission technologies, fuels and such as shipping and aviation and drive economic energy sources by 2030. benefits for Australia. Industry and government should work together to position Australia as a leader in this space and create new economic opportunities.’ Copenhagen Infrastructure Partners PJ per year 0 10 20 30 40 50 60 70 80 2025 2030 2035 2040 2045 2050 Hydrogen Diesel Natural gas Synthetic fuels Oil Biofuels Figure 12 Projected shipping fuel (domestic and international) use over time, including hydrogen used both directly and as an input to synthetic fuels (including ammonia, methanol and synthetic diesel) Source: CSIRO 2024 Scenario modelling of the production and consumption of hydrogen in Australia, central scenario. Note: The Australian Energy Statistics splits fuel consumption out for coastal and international bunkers. Although the fuel is refined and/or supplied in Australia, it is consumed by outbound ships and not included in the National Greenhouse Gas Inventory and domestic carbon budget. These categories have been combined for this analysis.

64 IMO 2023, Revised GHG reduction strategy for global shipping adopted. www.imo.org/en/MediaCentre/PressBriefings/pages/Revised-GHG-reduction-strategy-for-global- shipping-adopted-.aspx#:~:text=The%20revised%20IMO%20GHG%20Strategy,points%20for%202030%20and%202040. 71 Power AEMO’s 2024 Integrated System Plan forecasts that almost quadruple the firming capacity from sources Hydrogen represents an option as a clean energy alternative to coal will be required to firm the NEM by source for electricity generation. This is particularly 2050.65 Hydrogen could be co-fired with (or replace) the case in countries that are net energy importers natural gas, in suitably constructed facilities, to reduce with limited scope for domestic energy production. For the emissions from gas-powered peaking plants. example, the Republic of Korea has a plan to introduce Analysis by Frontier Economics suggests hydrogen hydrogen and ammonia as a progressive replacement could be used for electricity production even in for fossil fuels in thermal electricity generation. scenarios where gas distribution networks are not Australian hydrogen exports can therefore play an converted to hydrogen, since hydrogen turbines offer ongoing role supporting other nations to achieve their an opportunity to seasonally shift excess renewable future energy security and emissions reduction goals. generation from summer to winter.66 While Australia’s future power system is expected to The Tallawarra B project near Lake Illawarra is a be dominated by solar and wind generation, there peaking power station capable of being powered by are also opportunities for hydrogen to play a role a blend of gas and hydrogen. Similarly, the South in supporting the reliability of our grids. Hydrogen Australian Government has committed $593 million electrolysers provide a flexible source of electricity in capital funding for the development of a hydrogen demand and hydrogen can also be stored and production, generation and storage facility at Whyalla, provide a replacement for natural gas for firming South Australia. The Australian Government is also generation. As we progress to our 82% renewables working closely with Snowy Hydro to enable hydrogen goal and beyond, long-duration energy storage will use at the Hunter Power Project gas-fired power plant be increasingly important. In the longer term, bulk at Kurri Kurri. underground hydrogen storage, complementing pumped hydro projects such as Snowy 2.0, could cater for this demand. Credit: ATCO. ATCO Jandakot electrolyser

65 AEMO 2024, 2024 Integrated System Plan (ISP). https://aemo.com.au/en/energy-systems/major-publications/integrated-system-plan-isp/2024-integrated-system-plan-isp

66 Frontier Economics 2023, Economic analysis of hydrogen blending and conversion, Frontier Economics, Australia. 72 National Hydrogen Strategy ACTION 18 Support analysis on how hydrogen can optimally support Australia’s transition to renewables, including for energy storage, grid firming and via the flexible use of electrolysers. Hydrogen-powered generators also present a decarbonisation opportunity for remote community and mine sites. The role for hydrogen in most off- grid applications is likely to be as part of a suite of technologies, including renewables and battery energy storage systems to help deliver the achievement of a 100% renewable energy microgrid. Australian governments will continue to assess such early pilot and demonstration projects to gauge the economics and impact of investing in hydrogen for remote power applications. Other applications While light transport and domestic and commercial heating were identified as opportunities in the 2019 Strategy, technology and policy developments have meant that electrification is now likely to be the more dominant technology for these applications. While the Australian Government will not focus its efforts towards driving hydrogen adoption in these sectors, technology advancements may change the viability of hydrogen in some applications or specific circumstances may mean hydrogen is more prospective. The government will continue efforts to remove regulatory barriers to enable hydrogen adoption in such cases. For example, existing and well-advanced regulatory reform processes will enable companies and state and territory governments to progress projects that blend hydrogen in distribution gas pipelines where this enables efficient delivery of hydrogen to users. Similarly, the development of hydrogen refuelling infrastructure and regulation will enable hydrogen use in cars, noting FCEV models are still being developed by international manufacturers, and may be preferred in certain applications, for example, due to refuelling time advantages. 73 74 National Hydrogen Strategy 4. Securing community benefits Building Australia’s hydrogen industry will provide Key points benefits for local communities through jobs and • Many hydrogen projects will be based in regional and remote areas, including on land regional economic growth. As technology costs fall and markets mature over the longer term, the economic and sea Country that have legally recognised benefits of the hydrogen industry will also be shared rights for First Nations people. Best practice more widely across the broader Australian community. engagement with First Nations communities Published modelling has estimated Australia’s will help ensure hydrogen industry renewable hydrogen industry development and development takes community needs into related exports could produce $28.9 billion per year by account and local opportunities are realised. 2040 and create around 33,000 direct and indirect jobs, with further economic benefits from other industries • The Australian Government will work with key industry organisations on a voluntary like green metals.67 In the years ahead, the hydrogen sector can also help diversify regional economies hydrogen industry code of conduct. This can where there is a high concentration of jobs that will be help demonstrate the industry’s commitment affected by the global energy transition.68 to safe, ethical and responsible conduct and ensure it is benefitting communities. The Future Made in Australia Act will outline Community • Implementing appropriate regulation Benefit Principles. These principles relate to the: will provide trust and reassurance to the community regarding safety and • development of skilled, safe and secure workforces environmental risks. Australian governments • collaboration with local communities and First Nations communities directly affected by the will continue with existing regulatory work, transition to net zero explore the next tranche of reform needs, and examine options for providing ongoing advice • strengthening of domestic industrial capability and supply chains on safety risks. • Water is an essential resource for communities. • compliance tax affairs. in relation to the management of Australian governments will consider principles and actions that will help plan for and manage Government decision makers will have regard to demands for water, including from hydrogen the principles when delivering Future Made in production, in a new National Water Initiative. Australia supports such as the Hydrogen Production Tax Incentive scheme. These principles align with the positions and actions contained within this strategy.

67 Accenture 2021, Sunshot: Australia’s opportunity to create 395,000 clean jobs. https://assets.nationbuilder.com/climateaction/pages/3147/attachments/original/1660717384/ Clean_exports_detailed_report_vf.pdf?1660717384

68 Deloitte Australia 2023, Australia’s Hydrogen Tipping Point. www.deloitte.com/au/en/Industries/power-utilities-renewables/perspectives/australia-hydrogen-tipping- point.html 75 4.1 Opportunities for First The government has also expanded its pilot approach Nations communities to First Nations engagement in the emerging hydrogen sector through the First Nations Renewable Hydrogen Engagement Fund to be delivered alongside Many large-scale hydrogen projects are expected to the expanded Hydrogen Headstart program. The be developed in regional and remote areas on land program is intended to support First Nations groups and sea Country that have legally recognised rights located near potential Hydrogen Headstart projects, to for First Nations people, making them important access services and advice to assist them in social and partners in growing the hydrogen industry. The clean- economic benefits from hydrogen projects. energy transition also provides an opportunity to reset the historic approach large projects have taken to It is essential Australian governments and the industry engagement with First Nations people. By embedding is committed to early engagement with First Nations meaningful First Nations benefit-sharing into project communities, and respect for their cultural and development, design and implementation processes, heritage rights and self-determination. communities will realise cultural, social and economic benefits through the growth of a new industry. The ACTION 19 hydrogen industry will also benefit from improved social licence outcomes and greater certainty. Support the coordinated production and dissemination of culturally appropriate and accessible education materials ‘Enabling and empowering First Nations to play a that provide factual information about key and central role in Australia’s renewable energy transition goes beyond just social licence issues - hydrogen production, and the obligations it presents a unique opportunity for Australia to of project proponents. design a system that is fair and just and which can The program guidelines for the first round of the also positively impact and result in other social and Hydrogen Headstart program include merit criteria economic benefits for First Nations’ and information requirements for project proponents First Nations Clean Energy Network – Hydrogen to demonstrate their engagement with First Nations Headstart consultation communities. This includes the extent to which First Nations communities have been, and will continue to be, engaged or involved with the negotiations, There are several initiatives currently underway decision-making and benefit sharing of the project. that aim to ensure First Nations people can share A similar approach could be considered in other in the benefits from the clean energy transition. funding agreements to underpin adoption of The Australian Government is developing the First best practice for First Nations engagement across Nations Clean Energy Strategy to give First Nations the industry. communities a say in energy policies and programs as we transition to net zero. This strategy is supported by ACTION 20 an extensive consultation process with First Nations people, communities and organisations, key amongst Support the inclusion of specific criteria in these being the First Nations Clean Energy and funding program guidance and obligations Emissions Reduction Advisory Committee. in funding agreements with Australian The Australian Government is also developing a governments that require proponents National Environmental Standard for First Nations to adopt best practice when engaging Engagement and Participation in Decision-Making. with First Nations communities including The standard is part of several reforms to Australia’s benefit sharing. national environmental law, the Environment Protection and Biodiversity Conservation Act 1999, and aims to improve the ways in which First Nations communities are included in environmental planning. 76 National Hydrogen Strategy 4.2 Voluntary hydrogen industry ACTION 21 code of conduct The Australian Government will encourage the hydrogen industry to adopt best Communities are generally positive about the benefits practice stakeholder engagement, of hydrogen but are yet to form strong opinions on or gain an awareness about the utility of hydrogen.69 The including through the development of a sector must take the lead to ensure it is safe, ethical voluntary code of conduct, to maintain and responsible and is seen to be contributing to positive interactions with communities communities. and industry. Many industries establish member undertakings or A voluntary industry code of conduct would sit codes of conduct to: alongside other actions the Australian Government • ensure that both members and the public understand what can be expected when interacting has taken to encourage best practice engagement by the renewable energy industry with local communities with the industry as well as the Future Made in Australia Community Benefit Principles. It would also provide a framework • provide guidance to new industry members for communities to consider the economic challenges • provide at least an informal avenue to pursue improvements in behaviour. of developing these projects. The Australian Energy Infrastructure Commissioner (AEIC) has been established to receive and refer complaints from For example, the Clean Energy Council (CEC) requires concerned community members about wind farms, members to agree to a code of conduct in regard to large-scale solar farms, energy storage facilities how they relate to business, government, employees, and new major transmission projects. The AEIC also suppliers, consumers and the community. The CEC promotes best practices for business and government has also established a Best Practice Charter for to adopt the planning and operation of these projects. Renewable Energy Projects, which sets out voluntary commitments for good community engagement and The government is also progressing actions in responsible development.70 These existing codes response to the Community Engagement Review71 are directly relevant to hydrogen projects. The land which identified opportunities to ensure community required to develop new renewable generation support and participation in Australia’s renewable facilities for hydrogen projects mean this may be the energy transition. This includes the implementation of most noticeable component of a hydrogen project for a developer rating scheme, and a regulatory reform many communities. Codes of conduct in relation to package to realise community benefits in regions business interactions with their customers can also be affected by the energy transition. established in regulation under the Competition and Consumer Act 2010.

69 Based on Mitchell Scovell and Andrea Wolton 2024, Blue or Green? Exploring Australian acceptance and beliefs about hydrogen production methods, Journal of Cleaner Production. https://doi.org/10.1016/j.jclepro.2024.141151, and; P Ashworth, K Witt, M Ferguson, & S Sehic 2019, Developing Community Trust in Hydrogen, University of Queensland: Brisbane. https://espace.library.uq.edu.au/view/UQ:4ea6a57

70 Clean Energy Council 2021, Best Practice Charter. www.cleanenergycouncil.org.au/advocacy-initiatives/community-engagement/best-practice-charter

71 Andrew Dyer and Australian Energy Infrastructure Commissioner 2023, Community Engagement Review Report, on behalf of the Department of Climate Change, Energy, the Environment and Water, Canberra, 2 February 2024. 77 4.3 Regulation to build Some jurisdictions have announced significant community trust reforms to accelerate approval processes at the state or territory level. These reforms will enable hydrogen and related renewable energy projects The development of appropriate and nationally to navigate approvals processes more efficiently consistent regulation, codes and standards applicable while giving communities confidence about effective to Australia’s hydrogen production will provide environmental outcomes. confidence, trust and reassurance to the community on safety and environmental standards, and certainty In addition to streamlining environmental controls, to businesses wanting to know how hydrogen projects the development of appropriate and nationally can meet regulatory obligations. Regulation is a consistent regulation, codes and standards applicable core responsibility for governments and there are a to Australia’s hydrogen will provide confidence, range of existing Commonwealth and jurisdictional trust and reassurance to the community on safety regulations relevant to hydrogen production. and environmental standards, and certainty to businesses wanting to know how hydrogen projects Proposed hydrogen projects may require approval can meet regulatory obligations. Regulation is a core under national environment law before they can responsibility for governments and a range of existing go ahead. Environmental impacts associated with regulations are relevant to hydrogen production. hydrogen production could include (but are not limited to): habitat disturbance from land clearing, disturbance to aquatic ecosystems from changes ACTION 22 to water quality or hydrological regimes, and risks Continue efforts across all levels of of environmental contamination from leaks/spills government to improve the efficiency of saline waste or toxic substances (such as during transport). Ancillary infrastructure associated with and effectiveness of regulatory approval hydrogen production may also require approval, processes for safety and environmental including pipelines and new or expanded port protection. facilities. Australian governments have consulted on and The Australian Government has acknowledged the are developing National Hydrogen Codes of Best need for more efficient and effective environmental Practice, with an initial focus on hydrogen production approvals processes to enable the economy’s and refuelling. An objective is to provide greater transition to net zero by 2050. In the hydrogen transparency and national consistency regarding the industry, a slow rate of consideration by regulators will intersection of hydrogen with existing regulatory put Australia at a disadvantage compared with other frameworks, such as work, health and safety (WHS) countries. The Australian Government is progressing obligations. This work has been progressed in a significant reform program for the Environment consultation with relevant regulators and agencies Protection and Biodiversity Conservation 1999 Act across the country, including with Safe Work Australia. (EPBC Act).72 The government recently announced These national codes will provide certainty and funding to strengthen and streamline environmental guidance both to companies and regulators on how approval decisions for priority renewable projects. hydrogen projects can meet regulatory obligations Funded elements include increased regulatory for safety and environmental protection, as well capacity, better guidance for proponents, and research as assurance to communities and workers. Once into localised threatened species. Projects that avoid completed, state and territory governments can sensitive environmental areas through appropriate facilitate hydrogen industry growth by ensuring the site selection have the fastest regulatory pathway national codes are adopted within their existing under the EPBC Act. regulatory agencies.

72 The Australian Government’s Nature Positive Plan sets out the government’s commitment to reform Australia’s environmental laws to better protect, restore and manage our unique environment. DCCEEW 2022, Nature Positive Plan: better for the environment, better for business. www.dcceew.gov.au/environment/epbc/ publications/nature-positive-plan 78 National Hydrogen Strategy ACTION 23 Similar forums for the establishment and dissemination of safety advice already exist. For Support the development and adoption example, Australian governments convene working of the National Hydrogen Codes of Best groups in relation to major hazard facilities, and in Practice in relation to hydrogen and the United States, technical and safety matters are ammonia. considered by the Hydrogen Safety Panel within the Centre for Hydrogen Safety. As markets for hydrogen and associated products develop alongside rapid technological change, expert ACTION 24 advice on safety and environmental protection will need to be developed. Governments, safety Consider the need for expert forums or forums and workers would have an interest in this bodies to advise governments on safety growing body of advice, particularly given this is an and environmental protection issues to emerging industry. ensure that best practice approaches are being employed. 79 4.4 Sustainable water use ACTION 26 To support infrastructure planning by Water is an essential resource for all communities, particularly in regional Australia, and underpins companies and water planning agencies, agriculture and other industries. Water supports future National Hydrogen Infrastructure communities’ physical and mental health through safe Assessments will include a focus on water drinking water, economic opportunities and upkeep of demand and availability for hydrogen community facilities. Water, and the environments that production. depend on it, also hold important cultural and spiritual values, particularly for First Nations people. Developing new water infrastructure comes with high costs that must be seen to be fairly shared by all users. Water consumption for the future hydrogen Securing suitable water supplies amongst competing economy is likely to be considerable but not demands will be critical to growing a sustainable prohibitive, particularly in regions that have sufficient hydrogen sector and building social licence and water sources to support sustainable hydrogen community acceptance. This will be aided where new development.73 Further scenario analysis for the water infrastructure needed for hydrogen production strategy reinforced that low water availability may can be shared by townships, industries and agriculture be a barrier to hydrogen development in some parts to benefit entire communities. of Australia, particularly dry inland regions. In other areas, new water infrastructure such as desalination The 2004 National Water Initiative is the national plants, water recycling, stormwater harvesting and blueprint for how best to balance demands for water pipelines will be needed, as will efforts to maximise from various uses and guides integrated water the use of wastewater. 74 management (including stormwater, recycled water, and desalinated water). Australian governments are In considering future hydrogen industry development, working to renew the 2004 National Water Initiative to planners and proponents will need to consider what ensure water-resource planning better accounts for water is available in different areas, factoring in the impacts of a changing climate and the needs of where water is fully allocated to existing uses, and emerging industries. options to complement with new sustainable water infrastructure. Early planning by governments and Ensuring a complementary relationship between business will help ensure water infrastructure is national initiatives such as a renewed National available as the hydrogen sector scales-up over the Water Initiative and water management policy and coming decades. frameworks in operation at a state/territory level will be crucial to sustainable water supply and usage The Australian Government, in partnership with outcomes for Australia’s hydrogen industry. CSIRO, is developing a nationally consistent approach to understanding water resource and wastewater management requirements needed for future ACTION 27 hydrogen development.75 Further research and Support the consideration of water science, as well as experience gathered as projects are demand associated with hydrogen brought online, will help inform water availability and production in the development of a demand for hydrogen across Australia and support new National Water Initiative as a effective infrastructure planning. complement to water management policy ACTION 25 and frameworks in operation at a state/ territory level. Report annual project water consumption by the hydrogen industry through the annual State of Hydrogen report.

73 The National Hydrogen Infrastructure Assessment concluded that, at a national level, water demand for future Australian hydrogen production could be of a similar order of magnitude in 2050 to current water use in our mining sector. DCCEEW 2023, National Hydrogen Infrastructure Assessment: Final Report. www.dcceew.gov.au/ sites/default/files/documents/national-hydrogen-infrastructure-assessment-final-report.pdf

74 Arup 2024, Infrastructure to enable hydrogen industry development – additional scenarios building on the National Hydrogen Infrastructure Assessment, Arup, Australia.

75 National Water Grid Authority 2023, Securing water for an emerging Australian hydrogen industry. www.nationalwatergrid.gov.au/projects/securing-water-emerging- australian-hydrogen-industry 80 National Hydrogen Strategy 4.5 Ensuring domestic hydrogen Governments expect clear benefits to flow to supply Australian industry from developing hydrogen in Australia, and this includes moving towards abundant hydrogen supply - especially where hydrogen projects As Australia transitions towards net zero emissions by benefit from Australian public investment. Many 2050, the domestic economy will become increasingly industry developments observed so far, including reliant on a stable supply of hydrogen. The goal of those with an export-orientation, are already establishing a hydrogen export industry also brings working with domestic industry to support domestic with it the risk that international market forces could decarbonisation and provide enhanced social and impact Australia’s domestic hydrogen and energy economic benefits. As an initial action to give effect markets. to intended domestic industry benefits, governments Establishing a hydrogen export industry will be may encourage these domestic industry linkages crucial to driving down costs for renewable hydrogen, through funding and program design. Governments securing the foreign investment required to develop intend for hydrogen to be available to Australian the sector and creating economies of scale that industry at competitive prices and volumes, while will enable a thriving domestic industry. Australian honouring contractual agreements with trading governments will ensure domestic hydrogen security partners. is maintained in parallel to the establishment of an Governments do not see a need to apply market export industry. Transparent monitoring of underlying constraints at this time, but will develop lead indicators market conditions, including through broadening the that will be used to monitor the security of domestic National Gas Law to hydrogen, will enable Australian hydrogen supply. These lead indicators will help governments to monitor risk and ensure sufficient governments anticipate whether new steps are needed domestic supply while remaining a reliable supplier to to ensure future supply chains continue developing in international partners. a way that supports Australian industry and matches There are other policy mechanisms that could also government and community expectations. be considered and the Future Made in Australia Community Benefit Principles note that supported ACTION 28 projects should provide community benefits Monitor emerging risks to domestic which includes strengthening domestic industrial capabilities, including through stronger local supply hydrogen supply as part of the chains. This could include supply chains for well-priced independent assessment undertaken domestic hydrogen. for the annual State of Hydrogen report, and the 5-yearly review of the National Hydrogen Strategy. 81 82 National Hydrogen Strategy 5. Shaping international trade and global markets 5.1 Capturing the international Key points trade opportunity • Australia will prioritise its international engagement, including by: – building on existing bilateral partnerships

2030 Export targets and stretch potential – engaging with major importers Australia’s energy exports play a pivotal role in enhancing global energy security, providing a stable – working pragmatically with other emerging and reliable supply of resources to meet the growing key exporters energy demands of our neighbours. A transition to to: clean energy sources must extend to transitioning – shape global hydrogen market rules our energy exports as not all countries have the same ability to produce hydrogen from renewable resources – ensure access to and advancement of key for their future energy needs. technologies – secure early-mover advantage in meeting A significant pipeline of Australian hydrogen projects emerging international demand. are now under development (representing over $225 billion or more in capital investment).76 If this • Australia will set a base hydrogen export target of 0.2 million tonnes and a stretch potential of project pipeline is realised, the IEA has noted Australia would achieve a leading role in international hydrogen 1.2 million tonnes of hydrogen (or equivalent trade flows by 2030.77 in hydrogen embodied products) per year by 2030. Internationally, key trading partners have announced • Australia will work with our international trade partners to leverage international funding or hydrogen use or import targets for 2030, and Australia is well-placed to meet a significant share of this co-finance mechanisms so Australia can help demand. Australia’s comparative advantages mean meet their import needs. we can also meet growing demand for products made • Expanding with hydrogen like green iron and alumina. Australia’s internationally aligned Guarantee of Origin scheme will continue to To signal our intention for Australia’s hydrogen export be a priority so Australian projects making, industry to materially contribute to the import and using and exporting hydrogen, as well as green use targets of potential trade partners, the Australian metals and low carbon liquid fuels, can attract Government is adopting short-term hydrogen export international investment and access global targets. markets.

76 DISR 2023, Resources and energy major projects 2023, www.industry.gov.au/publications/resources-and-energy-major-projects-2023. Note a revised valuation methodology was used compared with previous years that excluded projects that were at an “Advanced Feasibility” stage. The preceding report from 2022 valued the pipeline at $230-$303 billion.

77 IEA 2023, Global Hydrogen Review. www.iea.org/reports/global-hydrogen-review-2023. 83 TARGET 3 ‘Australia is poised to produce clean hydrogen at Australia will export a base amount scale, and export targets would help position the of 0.2 million tonnes and establish a country as a stable export market and enhance stretch potential of 1.2 million tonnes of the standing of Australian-based clean hydrogen producers as a partner of choice in the region.’ renewable hydrogen (or equivalent in hydrogen embodied products) per year Japan Suiso Energy by 2030. ‘Adopt corresponding and specific hydrogen As with the 2050 hydrogen production targets, the export targets (both firm in the shorter term, and base hydrogen export target reflects a small number indicative for longer timeframes) to send a clear of advanced projects known to be targeting the signal internationally of Australia’s anticipated role international market. The stretch potential reflects in the international marketplace.’ Australia’s interest in commencing hydrogen trade CWP Global with partners such as Germany, Japan and the Republic of Korea. 84 National Hydrogen Strategy 5.2 International investment • Austrade is Australia’s investment attraction and trade promotion agency. While Australia stands ready to be an international supplier of hydrogen and hydrogen products, • The Net Zero Economy Authority will liaise with other Commonwealth agencies, state and local significant investment will be needed for energy and governments and associated agencies, the private other economic infrastructure such as ports. As with sector and other organisations to identify, broker previous waves of resources and energy industry and catalyse investment in transformational developments, Australia will seek to partner with our projects. Australia has several agencies, including strategic and trade partners to enable this investment. Export Finance Australia, the Northern Australia Infrastructure Facility, Clean Energy Finance Foreign investment is welcome, recognising that in Corporation and National Reconstruction Fund addition to the funding necessary to support our Corporation, that provide financing support for economic transformation this investment also: infrastructure and other investments. • brings skills, technology, capability and talent to Australian firms and industries • Australia’s Sustainable Finance Strategy will support Australia’s pathway to net zero, by providing a • strengthens Australia’s capability in research, development, and commercialisation framework for reducing barriers to investment into sustainable activities. • improves the economic infrastructure that underpins growth and productivity in key industries Some of our major trading partners are implementing financing mechanisms to kick start progress towards and regions their domestic emission reduction targets. These • orients and prioritises global supply chains towards Australian opportunities. include contract-for-difference schemes and auctions to be administered by the European Union and Japan. Australia will collaborate with partner nations on Consistent support from all levels of government Australian hydrogen projects that establish end-to-end will be vital to securing the levels of international supply chains with those countries. investment required to ensure Australia is competitive, and Australia has a number of faciliatory mechanisms in place: ACTION 29 • Through the 2024-25 Budget, the Australian Government has committed to establish Pursue opportunities to leverage investment from other countries who are a new front door for investors with major, willing to provide co-funding and make transformational investment proposals related to other efforts to build end-to-end global the government’s Future Made in Australia agenda supply chains. to make it simpler to invest in Australia and attract more global and domestic capital. The front door will: – provide a single point of contact for investors and companies with major investment proposals – deliver a joined-up approach to investment attraction and facilitation – identify priority projects related to the government’s Future Made in Australia agenda – support accelerated and coordinated approvals decisions – connect investors with the government’s specialist investment vehicles. 85 5.3 Guarantee of Origin scheme Box 10: German-Australia Hydrogen Innovation and Technology The Guarantee of Origin (GO) scheme is a critical measure that will provide a transparent, verified, Incubator (HyGATE). objective, and trusted emissions accounting The HyGATE initiative was committed to under framework covering hydrogen and related products. the Australia-Germany Hydrogen Accord signed Administered by the Clean Energy Regulator, the GO in June 2021 and was intended to strengthen scheme provides objective and consistent information collaboration with German partners to reduce on production and life-cycle emissions, giving the cost of renewable hydrogen production and consumers of Australian hydrogen and renewable support technology innovation in the industry. electricity confidence in the emissions intensity and other environmental attributes of these products. Funding of up to $50 million from Australia and up to €50 million from Germany will be invested The Australian Government has committed to expand in new projects under HyGATE. Australia is the GO scheme to incorporate green metal production providing the following funding for 4 projects: and low carbon liquid fuels. • $20.74 million to Edify Energy Ptd Ltd. to develop, construct and operate the Edify Australia is working to ensure the GO scheme is accepted by partners as being capable of Green Hydrogen Project in partnership with demonstrating that clean energy exports meet import Siemens to contribute to the Australia– market requirements, including through: • enhancing Germany supply chain in Townsville, government-government bilateral and Queensland. multilateral engagement, such as by establishing • $19.48 million to Vast Solar to develop mutual recognition agreements and joint studies • taking a methanol production plant using heat a lead role in existing and future certification from concentrated solar thermal energy, multilateral forums. including a 10 MW electrolyser producing green hydrogen in Port Augusta, South Australia. ACTION 30 • $8.98 million to Hysata Pty Ltd. to develop a new ‘capillary-fed’ electrolyser to test Implement the Guarantee of Origin scheme in 2025, and progressively increase the delivery of low-cost hydrogen in Port the scope of the scheme to support the Kembla, NSW. expansion of the hydrogen industry. • $800,000 to ATCO Australia Pty Ltd. for a feasibility study into deploying an electrolyser and ammonia facility to make ‘Agreements to ensure consistency between advancements in hydrogen technologies Australia and other nations as to what constitutes and storage in the Illawarra region, NSW. low carbon hydrogen are required.’ Glencore ARENA is administering the HyGATE Initiative on behalf of the Australian Government (through the Department of Climate Change, Energy, the Environment and Water). Projektträger Jülich (PtJ) is administering the HyGATE Initiative on behalf of the German Government (through the German Federal Ministry of Education and Research). 86 National Hydrogen Strategy 5.4 Strengthening international partnerships Hydrogen is a key component in existing clean energy partnerships with major trade and strategic partners, as summarised in Appendix B. Deepening collaboration on RD&D, and supply chain development including with countries like the Republic of Korea, Germany, Japan, India and the United States, can position Australia at the leading edge for innovative hydrogen technologies and help build global supply chain resilience. Australia will also continue to work through multilateral forums to: • progress international governance and certification frameworks • foster innovation and technology transfer • shape and influence trade rules and norms • mobilise and enable a skilled workforce • promote regulatory harmonisation • foster diverse, robust and efficient clean energy supply chains. ACTION 31 Existing partnerships will be prioritised as vehicles for furthering our international hydrogen objectives. Australia will look for opportunities to grow global markets and build end-to-end supply chains. ‘Much of the capital required for Australia’s energy transition will need to come from overseas investors in partnership with Australian businesses and governments...The need for national leadership across multiple fronts cannot be understated.’ Australian Hydrogen Council 87 88 National Hydrogen Strategy 6. Looking ahead ACTION 32 Key Points: Complete a full review of the National • Australia will continue to take an adaptive approach to develop our hydrogen industry. Hydrogen Strategy every 5 years, with the review to include a focus on progress • The National Hydrogen Strategy will be reviewed every 5 years, with the review to against the targets and milestones include a focus on progress against the targets detailed in the strategy, and consideration and milestones detailed in the strategy, and of the need for additional policy measures. consideration of the need for additional policy Chapter 2 of the strategy outlines the path to the measures. progressive reduction in the cost of producing • The annual State of Hydrogen report will highlight emerging trends that may necessitate hydrogen, including efficiencies realised from delivering large-scale, export facing hydrogen projects. minor or urgent policy measures ahead of the The Hydrogen Headstart program and Hydrogen next 5-yearly review. Production Tax Incentive reflect that to achieve scale early and position Australia as a global hydrogen leader, governments will need to provide financial 6.1 An adaptive approach support. However, over time hydrogen businesses will be expected to contribute to the tax base when able and specific government support mechanisms can The current expected development trajectory for be retired. the hydrogen industry to 2050 can be characterised according to the following stages: ACTION 33 • 2020 – 2030: Industry activation and initial scale production Monitor the value of direct revenue support in the hydrogen sector and • 2030 – 2040: Increase scale production and export of hydrogen and derivatives anticipate shifts that allow returns to taxpayers in the future. This will include • 2040 – 2050: Scaling up of export and consolidation of domestic use, including the realisation of more considering trends in technology costs, challenging uses such as aviation. international market developments (including policy support in competitor However, to meet these expectations will require immediate and ongoing action as well as predictable countries) and the pace at which the costs adjustment to meet changes in technology, market of carbon emissions are internalised within dynamics and global politics. Companies are also the most prospective hydrogen using better able to take strategic decisions regarding sectors. long-term investment into technology and projects where there is relative policy stability. A comprehensive policy review every 5 years balances policy stability with responsiveness and will enable the strategy to function as an input to future updates to Australia’s Nationally Determined Contribution. Minor or more urgent policy reforms will be considered annually through the State of Hydrogen assessment and report. 89 6.2 Tracking progress and 6.3 Governance and measuring success institutions The Department of Climate Change, Energy, the Implementation, monitoring and review of the Environment and Water has commissioned annual National Hydrogen Strategy will be led by the independent assessments against the 13 industry Australian Government with accountability to the development signals identified in the 2019 Strategy, Parliament of Australia, most directly through the which has been included in consecutive State of Minister for Climate Change and Energy. However, Hydrogen reports. This publication allows for the as a priority industry under the Future Made in strategy’s implementation to be tracked by external Australia agenda, implementation of the 2024 National stakeholders and complements the Australian Hydrogen Strategy and subsequent monitoring and Government’s internal implementation planning and reporting activities will also be of central interest to governance arrangements to oversee the delivery of this broader government policy framework. the strategy. Australian state and territory governments have also The State of Hydrogen’s assessment framework will be developed hydrogen strategies to guide industry updated and extended to detail industry development development in their respective jurisdictions. This in each priority hydrogen demand area, water strategy provides an overarching framework for consumption from hydrogen production, regulatory communicating Australia’s approach to hydrogen approval times, consideration of the security of sector development from a national perspective. domestic hydrogen supply, and progress towards the Adopting a broadly consistent national approach targets and milestones outlined in this strategy. alongside policy set by state and territory governments ensures Australia’s hydrogen policies can be made clear to the international community and ACTION 34 other audiences while taking regional differences into account. Publish an annual State of Hydrogen report centred around an independent The Australian Government will continue to monitor assessment of progress. This will highlight industry progress and review the National Hydrogen Strategy in collaboration with the states and territories emerging trends that may necessitate and seek to maximise endorsement of the national minor or urgent policy measures ahead policy including through the Energy and Climate of the next 5-yearly review. Change Ministerial Council. 90 National Hydrogen Strategy Appendix A: List of Targets and Strategic Actions Targets Australia will produce at least 15 million tonnes of renewable hydrogen per year, with a stretch potential of 1 30 million tonnes by 2050. In addition to the 2050 hydrogen production target, Australia’s progress will be measured against the following annual hydrogen base and stretch production milestones: • 2030: 0.5 - 1.5 million tonnes • 2035: 3 – 5 million tonnes 2 • 2040: 5 – 12 million tonnes • 2045: 9 – 20 million tonnes Australia will export a base amount of 0.2 million tonnes, with a stretch potential of 1.2 million tonnes of renewable 3 hydrogen (or equivalent in hydrogen embodied products) per year by 2030. Actions Unlocking cost-competitive hydrogen production Focus government support on renewable hydrogen, complemented by suitable emissions intensity thresholds 1 and other requirements for government-supported hydrogen projects, with GO certificates to form the basis of verification. Provide early policy support to enable the scaling up of the hydrogen industry to achieve production costs that are 2 competitive with incumbent fossil fuels and to secure early offtake agreements. Consider reforms that may further enable specialist investment groups to play a bigger role in supporting the 3 hydrogen industry to mature and secure further finance through traditional capital markets. Support the integration of hydrogen hubs into the broader scoping, planning and development by Australian 4 governments of industrial precincts. Deliver the next iteration of the National Hydrogen Infrastructure Assessment over 2025 and 2026 in consultation 5 with key infrastructure planning agencies, with subsequent analysis conducted at least every 5 years. The Australian Government will work with the states and territories and other experts to improve understanding of 6 future hydrogen transport needs to inform the next iteration of the National Hydrogen Infrastructure Assessment. Support Geoscience Australia’s precompetitive data program to identify suitable sites for hydrogen storage 7 opportunities. Support the establishment of fit-for-purpose and nationally consistent regulatory arrangements for the geological 8 storage of hydrogen. Consider the readiness and prospects of ports to store and export hydrogen, import renewable energy 9 components, and to provide safe marine refuelling using low-carbon liquid fuels such as hydrogen, ammonia and methanol.

10 Support the development of sovereign clean technology and emissions-reduction manufacturing industries. Identify opportunities that leverage Australia’s research, development and demonstration (RD&D) capabilities to 11 advance hydrogen technology manufacturing in Australia. Support workforce development initiatives at all levels of government in line with responsibilities, with reference 12 to analysis and guidance from key institutions including the Department of Employment and Workplace Relations, Jobs and Skills Australia, and the Jobs and Skills Councils. Australia will seek opportunities to increase RD&D investment in the TRL 4-6 range through programs and grants, 13 including through ARENA. Identify opportunities to work with partners on RD&D and position Australia at the forefront of international 14 hydrogen-related research collaboration. 91 Using hydrogen to decarbonise Australian industries and exports Prioritise support for the development of Australian hydrogen for use in prospective export-facing industries, 15 particularly green ammonia, iron and alumina. Work with industry to understand barriers and challenges to hydrogen adoption in prospective domestic sectors, 16 including in the context of developing sectoral decarbonisation plans for energy, industry and transport. Support the targeted use of hydrogen for transport, either through direct use in hydrogen fuel cell vehicles or as 17 a low-carbon feedstock for the production of low carbon liquid fuels, alongside support for other pathways like electrification and alternative fuels. Support analysis on how hydrogen can optimally support Australia’s transition to renewables, including for energy 18 storage, grid firming and via the flexible use of electrolysers. Securing community benefits Support the coordinated production and dissemination of culturally appropriate and accessible education materials 19 that provide factual information about hydrogen production, and the obligations of project proponents. Support the inclusion of specific criteria in funding program guidance and obligations in funding agreements 20 with Australian governments that require proponents to adopt best practice when engaging with First Nations communities including benefit sharing. The Australian Government will encourage the hydrogen industry to adopt best practice stakeholder engagement, 21 including through the development of a voluntary code of conduct, to maintain positive interactions with communities and industry. Continue efforts across all levels of government to improve the efficiency and effectiveness of regulatory approval 22 processes for safety and environmental protection. Support the development and adoption of the National Hydrogen Codes of Best Practice in relation to hydrogen 23 and ammonia. Consider the need for expert forums or bodies to advise governments on safety and environmental protection 24 issues to ensure that best practice approaches are being employed.

25 Report annual project water consumption by the hydrogen industry through the annual State of Hydrogen report. To support infrastructure planning by companies and water-planning agencies, future National Hydrogen 26 Infrastructure Assessments will include a focus on water demand and availability for hydrogen production. Support the consideration of water demand associated with hydrogen production in the development of a new

27 National Water Initiative as a complement to water management policy and frameworks in operation at a state/ territory level. Monitor emerging risks to domestic hydrogen supply as part of the independent assessment undertaken for the 28 annual State of Hydrogen report, and the 5-yearly review of the National Hydrogen Strategy. Shaping international trade and global markets Pursue opportunities to leverage investment from other countries who are willing to provide co-funding and make 29 other efforts to build end-to-end global supply chains. Implement the Guarantee of Origin scheme in 2025, and progressively increase the scope of the scheme to support 30 the expansion of the hydrogen industry. Existing partnerships will be prioritised as vehicles for furthering our international hydrogen objectives. Australia 31 will look for opportunities to grow global markets and build end-to-end supply chains. Looking ahead Complete a full review of the National Hydrogen Strategy every 5 years, with the review to include a focus on 32 progress against the targets and milestones detailed in the strategy, and consideration of the need for additional policy measures. Monitor the value of direct revenue support in the hydrogen sector and anticipate shifts that allow returns to taxpayers in the future. This will include considering trends in technology costs, international market developments 33 (including policy support in competitor countries) and the pace at which the costs of carbon emissions are internalised within the most prospective hydrogen using sectors. Publish an annual State of Hydrogen report centred around an independent assessment of progress. This will 34 highlight emerging trends that may necessitate minor or urgent policy measures ahead of the next 5-yearly review. 92 National Hydrogen Strategy Appendix B: Australia’s international engagement on hydrogen Austrade Australia–Singapore Partnership on Low Emissions Technologies in Maritime and Port Operations • Austrade is Australia’s national investment attraction and trade promotion agency. • Established in June 2021. Australia and Singapore are accelerating the deployment of low emissions • Austrade works closely across government and with Australia’s state and territory governments, fuels and technologies like clean hydrogen, battery storage and electrification. to support Australia’s transition to a net zero and renewable energy superpower. This work • Established in October 2020, the Australia- Singapore MoU on low emissions solutions includes includes attracting productive foreign direct investment in net zero-aligned sectors, supporting collaboration on Hydrogen; CCUS; renewable export opportunities and helping companies energy trade; measurement; and reporting commercialise innovation across net zero sectors. verification of emissions. • Austrade brokers introductions, facilitates business to business engagement and promotes Australia–Republic of Korea Low and Zero Emissions Technology Partnership Australia’s hydrogen opportunities and Australian Government policies and programmes • Established in November 2021. Australia and the Republic of Korea are advancing technologies and internationally, to support Australian hydrogen trade systems for hydrogen supply, low emissions industry growth. steel and iron ore, and CCUS. Bilateral Australia-India Letter of Intent on New and Renewable Energy Technology Australia–United States Net Zero Technology Acceleration Partnership • Established February 2022. Australia and India have committed to work together on reducing the cost • Established in July 2022. This is a formal partnership to accelerate the development and and scaling up the deployment of ultra-low-cost solar and clean hydrogen, including electrolysers. deployment of zero emissions technology and to cooperate on critical minerals supply chains • InIndia-Australia May 2024, Australia and India established the Green Hydrogen Taskforce which to reduce greenhouse gas emissions while aims to identify opportunities to accelerate the supercharging economic growth. manufacture and deployment of green hydrogen. • The partnership establishes a framework for practical cooperation including support of applied Australia-Germany Hydrogen Accord research, development, pilot projects, and demonstration projects of mutual benefit with • Established June 2021. Australia and Germany are working together to accelerate the development of a focus on the development and deployment of a hydrogen industry under a new hydrogen accord technologies, including hydrogen towards zero or by establishing the Australia-Germany Hydrogen negative emissions. Innovation and Technology Incubator (HyGATE) to support real-world pilot, trial, demonstration, Australia–Japan Partnership on Decarbonisation and research projects along the hydrogen supply through Technology chain; facilitating industry-to-industry cooperation • Established in June 2021. Australia and Japan are focussing on lower emissions liquefied natural gas on demonstration projects in Australian hydrogen Hubs; and exploring options to facilitate trade of (LNG) production, transport and use, clean fuel Australian hydrogen and its derivatives produced ammonia, clean hydrogen, carbon capture, use and from renewable energy sources. storage, carbon recycling, and low emissions steel and iron ore. 93 Australia-United Kingdom Clean Technology Clean Energy Ministerial (CEM) Hydrogen Initiative Partnership • Australia works with the CEM Hydrogen Initiative • Established in July 2021. Australia and the United Kingdom have committed to work together to to ensure the successful deployment of hydrogen within current industrial applications; enabling collaborate on making low emissions technologies deployment of hydrogen technologies in transport globally scalable and commercially viable. (e.g. freight, mass transit, light-rail, marine); and The partnership will focus on R&D across key exploring the role of hydrogen in meeting the technologies including clean hydrogen; carbon energy needs of communities. capture and use; carbon capture and storage; small modular reactors including advanced nuclear QUAD Clean Hydrogen Partnership designs and enabling technologies; low emissions materials including green steel; and soil carbon • Australia has partnered with Japan, India and the United States to strengthen and reduce costs management. across all elements of the clean hydrogen value chain, leveraging existing bilateral and multilateral Australia-Netherlands Memorandum of hydrogen initiatives in other fora. This includes Understanding on Cooperation in the Field of technology development and efficiently scaling up Hydrogen the production of clean hydrogen, identification • Established in January 2023. Australia and the Netherlands will support the development of a and development of delivery infrastructure to safely and efficiently transport, store, and renewable hydrogen supply chain from Australia distribute clean hydrogen for end-use applications, to Europe. The Memorandum of Understanding and stimulating market demand to accelerate trade includes knowledge exchange on policy, in clean hydrogen in the Indo-Pacific region. certification and innovative technologies; port infrastructure and supply chain development; Indo-Pacific Economic Framework (IPEF) Clean innovative hydrogen technologies, including Economy Agreement shipping, equipment and services; and government policies about safety, social licence and regulations • Australia is working with IPEF on a regional hydrogen initiative to promote deployment of for hydrogen. renewable and low-carbon hydrogen and its derivatives. IPEF partners plan to establish work Australia-Denmark Strategic Partnership programs in other areas such as emissions Arrangement accounting to facilitate growth in green trade and • Australia is working with Denmark to explore opportunities for cooperation across 3 pillars: sustainable finance frameworks to unlock greater private sector support for decarbonisation. – Advancing action on climate change and green International Partnership for Hydrogen and Fuel transition Cells in the Economy (IPHE) – Promoting peace and security as we engage in a changing geopolitical environment • Australia works with its IPHE partners to share information and help facilitate multinational – Enhancing collaboration in areas of strategic research, development, and deployment initiatives importance. that advance the introduction of hydrogen and fuel cell technologies on a global scale. This is Multilateral achieved by IPHE’s working groups: the Education & Outreach Working Group and the Regulations, Mission Innovation Clean Hydrogen Mission Codes, Standards & Safety Working Group. • Australia is a member of Mission Innovation’s Clean Hydrogen Mission. The Mission has the goal to increase the cost-competitiveness of clean hydrogen by reducing end-to-end costs to a tipping point of 2 USD/kg by 2030. Costs reduction needs to happen across the value chain including, production, handling, transportation, and storage. 94 National Hydrogen Strategy Appendix C: Analysis for the strategy Lead Outputs Description CSIRO Modelling, analysis and report CSIRO modelled the role of hydrogen to help achieve Australia’s 2030, and net – Scenario modelling of the zero 2050 target under three scenarios (high, central and low adoption of clean production and consumption hydrogen) based on an understanding of domestic decarbonisation needs and of hydrogen in Australia. export opportunities by sector. ARUP Analysis and Report – The National Hydrogen Strategy of 2019 primarily focused on the supply side Activating domestic demand of hydrogen, its production and distribution. However, the review of the NHS for hydrogen has a greater emphasis on the demand side of the hydrogen market. To inform that focus, this report identified short, medium and long-term opportunities to stimulate domestic demand for clean hydrogen to better inform the market, reduce investment risk perceptions, support industry activation and better inform government policy choices. ARUP Analysis and Report – Updated The report explores how hydrogen hubs can play a role in the decarbonisation analysis of Australian of Australia’s hard-to-abate sectors, particularly helping to decarbonise Hydrogen Hubs industrial precincts and support development of new net zero export opportunities. The potential sectors for early hydrogen development are identified, and locations for prospective hydrogen hubs are explored. Finally, the ways in which hubs develop and can be supported by governments are examined, considering both international and Australian case studies. CSIRO Analysis and Report – CSIRO provided analysis on potential priority clean hydrogen related Clean Hydrogen Research, technologies and specifically the critical focus areas for research, development Development and and demonstration projects for the next decade that could position Australia as Demonstration (R&D&D) a global hydrogen leader. Priorities CSIRO Analysis and Report – Review CSIRO conducted a review of the roles of existing organisations in supporting of Australia’s Clean Hydrogen Australia’s hydrogen RD&D and a review of Australian and overseas operating Research and Innovation models for national research and innovation. Ecosystem ARUP Modelling, analysis and This analysis and report build on from the 2023 National Hydrogen report – Infrastructure to Infrastructure Assessment, and further improves understanding and enable hydrogen industry assessment of critical enabling infrastructure needs to support industry development – additional activation and position Australia to be a clean hydrogen leader by 2030. scenarios building on the National Hydrogen As well as various updated assumptions, this analysis includes an additional Infrastructure Assessment focus on water infrastructure for the future hydrogen economy, which was informed by a technical note exploring water availability and demand scenarios based on current water infrastructure planning. 95 Appendix D: Stakeholder engagement that informed the strategy The Australian Government undertook formal There were 115 stakeholder submissions to the open public stakeholder consultation as part of the National Hydrogen Strategy Review Consultation development of the 2024 National Hydrogen Strategy available from The Department of Climate Change, from July 6 to August 18 in 2023. The government Energy, the Environment and Water’s Consultation released a National Hydrogen Strategy Consultation Hub.78 The organisations that contributed public Report to assist this review and inform discussion, submissions to the review of the National Hydrogen inviting feedback and formal submissions. The Strategy are listed below. government undertook in 2023 and 2024 over 65 face to face meetings with stakeholders to consult and gain expert feedback on this formal review of the National Hydrogen Strategy. ABEL Energy Chevron InterContinental Energy ACI Climateworks Centre Jemena AEC CO2CRC J-Power and Sumitomo Corporation ANU Hydrogen Fuels Project, part of Copenhagen Infrastructure Partners Low Emission Technology Australia the Zero Carbon Energy for the Asia CS Energy (LETA) Pacific research initiative. Mining and Energy Union CWP Global APA Monash Energy Institute Daniel Schepis, Stephan Modest, Sudha ATCO Mani and Sharon Purchase Nigel Howard Australian Academy of Technological David Archibald NSW Powerfuel Including Hydrogen Sciences and Engineering Innovation Network Elizabeth Thurbon, Alexander Hynd and Australian Aluminium Council Hao Tan Origin Energy Australian Financial Markets Energy Australia Paul M Association Energy Networks Australia PDC Machines Australian Gas Infrastructure Group ENGIE Australia & New Zealand Provaris Energy Australian Hydrogen Council Engineers Australia Public Interest Advocacy Centre (PIAC) Australian Land Conservation Alliance Environmental Defenders Office Queensland Farmers’ Federation Australian Logistics Council EWAN MCLEAN Regional Development Australia - Australian Manufacturing Workers’ Illawarra Ex Testing and Certification Pty Ltd Union Fortescue Rheinmetall Defence Australia Australian Parents for Climate Action Frontier Energy Limited Rio Tinto Australian Petroleum Production and Gas Appliance Manufacturers Robert Horsnell Exploration Association Association of Australia Stralis Aircraft Australian Pipelines and Gas Gascoyne Green Energy Sunshine Hydro Association German-Australian Chamber of Tejaswy Australian Steel Institute Industry and Commerce Townsville Enterprise Australian Hydrogen Research Network Glencore Toyota BlueFloat Energy Grattan Institute Transgrid Boundless Earth Green LOHC Pty Ltd Tree Energy Solutions (TES) BP Hiringa Energy Victorian Chamber of Commerce and Business Council for Sustainable Hycamite Industry Development Australia Hycel Deakin University Water Services Association of Australia CFMMEU (Maritime Union of Australia and Construction Divisions) Iberdrola Australia Wilderness Society Chamber of Minerals and Energy of IECEx, ANZEx and JASANZ Worley Western Australia Institute for Energy Economics and Charles Stewart Lee Financial Analysis (IEEFA)

78 DCCEEW 2024, Provide your submission - Review of the National Hydrogen Strategy. https://consult.dcceew.gov.au/review-of-the-national-hydrogen-strategy/survey/list 96 National Hydrogen Strategy Appendix E: Governance The Australian Government led the development of Within the Australian Government, The Department of the 2024 National Hydrogen Strategy collaborating Climate Change, Energy, the Environment and Water in concert with states and territory governments via had carriage of this work working closely via a formal regular consultation through a Commonwealth, state Australian Government National Hydrogen Strategy and territory government Hydrogen Reference Group Steering Committee with high level representatives and regular Energy and Climate Change Ministerial from the following departments: Council (ECMC) meetings. • Department of Climate Change, Energy, the Environment and Water • Department of Industry, Science and Resources • Department of Infrastructure, Transport, Regional Development, Communications and the Arts. The National Hydrogen Strategy Review Energy & Climate Change Ministerial Council Working Group Commonwealth State & Territory Taskforce Reference Group Energy & Climate Change Senior Commonwealth Officials (ECSOG) consultation Jurisdictional consultation ECSOG Hydrogen Working Group Industry consultation Steering Committee Australian Government Department of Climate Change, Energy, the Environment and Water (chair) • Hydrogen • Climate • Energy • Water Department of Industry, Science and Resources Department of Infrastructure, Transport, Regional Expert Advisory Developemnt, Communications and the Arts Group Figure 13 National Hydrogen Strategy review governance structure. 97 Appendix F: Advisory Group members Chair: Jo Evans PSM, Deputy Secretary, Department of Climate Change, Energy, the Environment and Water (DCCEEW) Members Brad Archer, Chief Executive Officer, Joanna Kay, General Manager, Climate Change Authority Zero Carbon Hydrogen Australia Kobad Bhavnagri, Global Head of Strategy, Bloomberg NEF Darren Miller, Chief Executive Officer, Australian Renewable Energy Agency Prof Michael Brear, Director, Melbourne Energy Institute Matthew Maloney, Assistant Secretary, Climate and Energy, Treasury Tim Buckley, Director, Climate Energy Finance Rupert Maloney, Executive Director – Alternative Fuels, Clean Wendy Black, Head of Policy, Energy Finance Corporation (CEFC) Business Council of Australia Thomas Mortimer, National Policy Director, Dr Amanda Cahill, Chief Executive Officer, Australian Workers’ Union The Next Economy Karrina Nolan, Executive Director, Original Power, First Peter Chesworth, Head of Division Minerals and Resources, Nations Clean Energy Network Department of Industry, Science and Resources (DISR) Tennant Reed, Director – Climate Change and Energy, Nevenka Codevelle, Executive General Manager, Australian Australian Industry Group Energy Market Operator Alison Reeve, Energy and Climate Deputy Program Director, Dr Andrew Feitz, Director Low Carbon Geoscience Grattan Institute and Advice, Geoscience Australia Dr Fiona Simon, Chief Executive Officer, Dr Alan Finkel AC Australian Hydrogen Council (AHC) Dr Cathy Foley AO, Australia’s Chief Scientist Anna Skarbek, Chief Executive Officer, Climateworks Centre Anna Freeman, Policy Director – Decarbonisation, Clean Energy Council Prof Anne Tiernan, Griffith Business School Trevor Gauld, National Policy Officer, Zoe Whitton, Managing Director, Electrical Trades Union of Australia Head of Impact, Pollination Darcy Gunning, Community and Campaigns Organiser, Australian Manufacturing Workers’ Union Dr Patrick Hartley, Leader of CSIRO’s Hydrogen Industry Mission Penny Howard, National Research Officer, Maritime Union of Australia Erwin Jackson, Policy Director, Investor Group on Climate Change 98 National Hydrogen Strategy Appendix G: Abbreviations, acronyms and glossary AEMO – Australian Energy Market Operator, responsible for Energy market bodies – bodies which have a role regulating operating Australia’s largest gas and electricity markets and operating Australian energy systems and markets ARENA – Australian Renewable Energy Agency Energy markets – commodity markets that deal specifically with the trade and supply of energy, generally electricity, gas, BEV – battery electric vehicle, fully electric vehicle with and liquid fuels rechargeable batteries and no internal combustion engine Energy systems – includes energy markets and energy Blue hydrogen – hydrogen produced using fossil fuels with supply networks substantial carbon capture and storage. The 2019 National Hydrogen Strategy noted that, to produce hydrogen from EPBC Act – the Environment Protection and Biodiversity natural gas or coal at acceptably low levels of carbon Conservation Act 1999, Australia’s main national environmental emissions, capture rates of 90% or more will likely be required legislation CBAM – Carbon Border Adjustment Mechanism EFA – Export Finance Australia CCS or Carbon Capture and Storage – the process of FCEV – fuel cell electric vehicle – an electric vehicle that uses capturing and permanently storing carbon emissions electricity from a fuel cell powered by hydrogen, rather than electricity from batteries CEFC – Clean Energy Finance Corporation FMiA or Future Made in Australia – the Australian CEM or Clean Energy Ministerial – a global forum held to Government’s Future Made in Australia package promote policies and to share best practices with the aim of accelerating a transition to clean energy. The forum includes Gasification – a process that converts fossil fuel-based partnerships and collaboration between the private sector, materials into gases public sector, non-governmental organisations, and others GDP – gross domestic product Center for Hydrogen Safety – a not-for-profit, membership organisation established by the American Institute of GJ – gigajoule, a unit of electrical energy equal to Chemical Engineers to promote the safe operation, handling 1,000,000 kilojoules and use of hydrogen Green hydrogen or Renewable hydrogen – hydrogen Clean hydrogen – hydrogen produced using renewable produced through electrolysis using renewable electricity energy or fossil fuels with substantial carbon capture Grey hydrogen – hydrogen produced using natural gas and storage without substantial carbon capture and storage CO2 – carbon dioxide GO scheme or Guarantee of Origin scheme – an CO2-e – carbon dioxide equivalent, a metric used to compare internationally aligned assurance scheme being designed the emissions from various greenhouse gases to determine to track and verify emissions associated with hydrogen, their individual and total contributions to global warming renewable electricity and other products (such as green metals and low carbon liquid fuels) made in Australia CSIRO or Commonwealth Scientific and Industrial Research Organisation – Australia’s national science GWh – gigawatt hour, a measure of electrical energy in terms research agency of the use of one gigawatt of power for one hour, equal to 1,000 MWh Demand response – a planned change in the power consumption of an electricity user to assist in matching HPTI or Hydrogen Production Tax Incentive – A program electricity demand and supply aimed at accelerating the deployment of renewable hydrogen production in Australia by providing time-limited, demand- DRI or Direct Reduced Ironmaking – the chemical removal driven production support through Australia’s tax system to of oxygen from iron ore in its solid form eligible renewable hydrogen producers ECMC – Energy and Climate Change Ministerial Council The HPTI will be delivered through Australia’s tax system, claimable at a rate of $2 per kilogram of eligible hydrogen Electrolysis and electrolysers – electrolysis is the process produced. Support will be provided between 2027–28 and of using electricity to split water into hydrogen and oxygen. 2039–40 for projects that reach final investment decision by This reaction takes place in a unit called an electrolyser 2030. Each facility will have access to the HPTI for a maximum of 10 years from first production Emissions or Carbon emissions – carbon dioxide released to the atmosphere from burning fossil fuels, manufacturing, mining, land use and other activities 99 Hydrogen – a colourless, odourless, tasteless, flammable NEM – National Electricity Market – a wholesale electricity substance that is the simplest chemical element in the market that interconnects Queensland, New South Wales, periodic table. It is virtually non-existent in its free form on Victoria, South Australia, Australian Capital Territory, and Earth and requires energy to liberate it from the material Tasmania forms in which it is found. In this strategy, references to ‘hydrogen’ should be taken to mean ‘clean hydrogen’, unless NRFC – National Reconstruction Fund Corporation otherwise specified. See also ‘clean hydrogen’ PJ – petajoule, a unit of electrical energy equal to Hydrogen Headstart – a competitive program which will 1,000,000 gigajoules provide revenue support to large-scale renewable hydrogen R&D – Research and development projects in Australia to bridge the commercial gap between the production costs and sale price of renewable hydrogen, RD&D – Research, development and demonstration or derivative products such as ammonia or methanol Renewable energy – energy that is collected from renewable Hydrogen hubs – aggregations of various users of hydrogen resources, which are naturally replenished on a human in one area. They may be in ports, cities, or remote areas timescale, such as sunlight, wind, rain, tides, waves, and geothermal heat HyGATE – the Australia-Germany Hydrogen Innovation and Technology Incubator to support real-world pilot, trial, SAF or Sustainable Aviation Fuel – renewable or demonstration, and research projects along the hydrogen waste-derived aviation fuels that meet sustainability criteria supply chain Safeguard Mechanism – An emissions reduction policy IEA – International Energy Agency under which legislated limits—known as baselines— are set on the greenhouse gas emissions of Australia’s largest IPEF – Indo-Pacific Economic Framework industrial facilities. These emissions limits will decline, IMO – International Maritime Organisation predictably and gradually, on a trajectory consistent with achieving Australia’s emission reduction targets of 43% below Integrated System Plan – a whole-of-system plan that 2005 levels by 2030 and net zero by 2050 provides an integrated roadmap for the efficient development of the National Electricity Market (NEM) over the next 20 years Sectoral decarbonisation plans – in line with Australia’s and beyond commitment to achieve net zero emissions by 2050, the Australian Government is preparing decarbonisation IPHE – International Partnership for Hydrogen and Fuel Cells plans for 6 key sectors – electricity and energy, transport, in the Economy industry, agriculture and the land, resources, and the built environment IRENA – International Renewable Energy Agency State of Hydrogen report – an annual report to track JSA – Jobs and Skills Australia Australia’s hydrogen industry development and progress against global developments JSC – Jobs and Skills Councils Steam methane reforming – a method to extract hydrogen kWh – the amount of electrical energy provided by one using natural gas. It involves catalytically reacting natural kilowatt of power for one hour gas with steam to produce hydrogen and carbon monoxide LNG – liquefied natural gas, the form in which natural gas is (a mixture known as syngas). A subsequent reaction involving transported over long distances more steam produces further hydrogen while also converting carbon monoxide (CO) to carbon dioxide (CO2) Mission Innovation – a global initiative of 23 countries and the European Commission to accelerate clean energy Supply chain – activities involved to make, move, store and innovation use a product MWh – the amount of electrical energy provided by one TWh – Terawatt hour, the amount of electrical energy megawatt of power for one hour. Equal to 1,000 kWh provided by one terawatt of power for one hour, equal to 1,000 GWh NAIF – Northern Australia Infrastructure Facility VET – Vocational Education and Training NZEA – Net Zero Economy Authority NHIA or National Hydrogen Infrastructure Assessment The inaugural assessment of infrastructure needed to establish and scale up Australia’s hydrogen industry which was published in 2023 100 National Hydrogen Strategy 101