A $300 million Advancing Hydrogen Fund has been implemented by the Federal Government to establish Australia’s position as a world leader in hydrogen production and exports.
The new fund will finance projects focused on growing a clean, innovative and competitive hydrogen industry in Australia. It is the government’s first financing fund that is dedicated to hydrogen projects.
The fund will back projects that align with priorities under the National Hydrogen Strategy. This includes areas such as advancing hydrogen production, developing export and domestic supply chains, establishing hydrogen hubs and backing projects that build domestic demand for hydrogen.
The Advancing Hydrogen Fund will be administered by the Clean Energy Finance Corporation (CEFC) and will provide concessional finance for projects that will support a national hydrogen industry.
Finance Minister, Mathias Cormann, said the government is drawing on the energy and financial markets expertise of the CEFC, which has invested more than $7.7 billion in clean energy so far, to help drive investment in hydrogen.
“This new fund will be a catalyst for the future growth of Australia’s hydrogen industry, which has the potential to boost Australia’s energy security, while creating more new jobs across the country and becoming a major new export industry,” Mr Cormann said.
“There are many innovative Australian organisations working to advance the hydrogen industry and this fund will support that work. Our government is very committed to backing technological advances in the hydrogen industry.”
Energy and Emissions Reduction Minister, Angus Taylor, said the Advancing Hydrogen Fund met a commitment in the National Hydrogen Strategy, launched at the COAG Energy Council meeting in November 2019 to build Australia’s hydrogen industry into a global export industry by 2030.
“The Australian Government has a strong commitment to building a hydrogen industry which will create jobs, many in regional areas, and billions of dollars in economic growth between now and 2050,” Mr Taylor said.
“Our hydrogen industry has the ability to make a tremendous positive impact both at home and overseas.
“From cheaper energy bills and job creation in regional Australia, to playing a role in reducing global emissions both at home and in countries that buy Australian-produced hydrogen, the industry’s potential cannot be ignored.”
Mr Taylor also noted that, according to Bloomberg New Energy Finance, this $300 million fund, along with the recently opened $70 million Renewable Hydrogen Deployment Funding Round administered by the Australian Renewable Energy Agency (ARENA), is one of largest commitments to the hydrogen sector made by any government in the world.
Australian Hydrogen Council CEO, Dr Fiona Simon, said, “The government clearly recognises that we can’t take the foot off the accelerator – this pandemic is temporary, but our need for energy is permanent and growing.
“We must improve community and industry energy efficiency by harnessing the power of hydrogen.
“Researchers and innovative businesses across the country are working flat out to deliver hydrogen applications and large-scale supply. Australia needs to have the most efficient and cost-effective energy mix to fuel industry and community requirements, and hydrogen has a crucial role.
“The National Hydrogen Strategy set out that a hydrogen industry would be pursued and these funds show that the strategy has real commitment. The strategy is a solid plan to build our domestic markets and exports back to the highest possible levels after an economic downturn or any change in global energy preferences.
“Hydrogen can help us to solve our energy dilemma through providing high volumes of energy to industry, cities and homes across Australia and address energy security. The Federal
Government has taken a step which will give confidence to many business and research institutions that hydrogen is a national priority and will be supported in the future.”
The Government has set an economic goal for hydrogen of ‘H2 under 2’ – that is hydrogen at or under $2 per kilogram – the first technology goal in the Technology Investment Roadmap.
That’s the point where hydrogen becomes competitive with alternative energy sources in large-scale deployment across energy systems. This goal is essential to drive down the cost of new technologies, and the Advancing Hydrogen Fund will help to achieve this price point.
The government has issued the CEFC with a revised investment mandate, to make up to $300 million available for the Advancing Hydrogen Fund.
APPEA Chief Executive, Andrew McConville, said the natural gas industry was well-placed to assist in the development of a large-scale and innovative commercial hydrogen industry, both in using natural gas to produce hydrogen and using gas infrastructure to process and transport hydrogen.
“Australia’s LNG export success story means our industry has the technology, expertise, and commercial and trade relationships to make hydrogen exports a reality,” Mr McConville said.
“There is tremendous interest globally in hydrogen as a new, cleaner fuel. Australia is well-placed to capitalise on our already abundant natural advantage.”