The hydrogen divide: a future fuel or a flawed fantasy in Australia?

The opportunity for green hydrogen production in Australia is vast, with significant potential in the export market if key technological hurdles are overcome. As countries around the world seek cleaner, more sustainable energy solutions, Australia is well positioned to become a key exporter of green hydrogen due to its abundance of renewable resources, proximity to key export markets and availability of land. By capitalising on its natural advantages Australia can meet growing international demand, particularly from Japan, South Korea, and Europe, where domestic production will likely be less competitive.

• Green hydrogen production is still a nascent industry and therefore is a high-risk investment opportunity. The market has great potential; however, progress will only be possible if technological advancements are made and economic viability established. The government is actively encouraging investment through various policies and incentives, but the level of private sector investment has been low and slow to grow.

• Currently our forecasts include $18.7bn worth of hydrogen projects over the next 15 years, but with $269.4bn of mooted projects there is significant upside risk should the technological challenges be addressed. Combined there are almost 100 potential hydrogen projects in the pipeline (see chart 1 below) indicating the growth potential in this industry.

• The hydrogen industry is currently facing headwinds with a significant pullback in private investment. However, technology is advancing with innovations driving the efficiency and scalability of green hydrogen, costs are declining as the availability of renewable energy generation increases, and the optimal end use applications of hydrogen are becoming clearer. At the same time the global market for green hydrogen is steadily taking shape, with growing interest in cross-border collaboration and partnerships.