The Australian government has announced the launch of the Hydrogen Headstart initiative, which aims to boost the growth of Australia’s renewable hydrogen industry through a A$2-billion investment.
Climate Change and Energy Minister Chris Bowen said the move was intended to position Australia as a prominent player in the global green hydrogen market, given the escalating competition for clean energy investment worldwide.
The program’s primary objective is to provide financial support (as credits per kilogram of green hydrogen production) to large-scale renewable hydrogen projects by offering competitive hydrogen production contracts, thereby bridging the gap for early-stage initiatives and enabling the country to achieve a target of up to one gigawatt of electrolyzer capacity by 2030 through two or three flagship projects.
The scheme, which was announced in Australia’s federal budget on May 9, met with support from billionaire Andrew Forrest, of Fortescue, and other proponents of renewable hydrogen projects in Australia. Forrest said Hydrogen Headstart was a “wonderful first step,” but said the Australian government should match the US government’s tax credits of $US3 (A$4.40) a kilogram.
British energy giant BP, which is developing three large hydrogen projects in Western Australia, said the program of competitive production contracts assisted producers by helping to de-risk significant investments in an important new industry, as well as potentially attract global capital to Australia.
However, explosives manufacturer Orica said that much more governmental support was needed.
The company plans to replace natural gas with green hydrogen as a feedstock in its manufacturing operations at the Kooragang Island plant located near Newcastle. This plant consumes nearly 15% of the total natural gas supply in New South Wales.
Orica intends to offer carbon-light products resulting from this change to clients like mining giants BHP and Rio Tinto, which will enable them to reduce their scope 3 climate emissions.
“The US has allocated $US350 billion ($516 billion) to support the hydrogen industry,” said chief executive, Sanjeev Gandhi. “We are starting with $2 billion. It’s a great start, but we need to scale that up quickly.”
Sources: Mining Weekly, Sydney Morning Herald, Sydney Morning Herald
Image: Photo by Thomas Richter on Unsplash