Australia: National Hydrogen Strategy

Following the close of the COAG Energy Council Working Group consultation period on the 9 hydrogen issues papers released by the Working Group in July, it is unsurprising that hydrogen continues to be actively discussed in the energy market.

The opportunities for hydrogen were actively discussed at this week's Clean Energy Summit. One of the key observations in the market is how to generate demand to expedite production at scale. It is clear that some technologies are there, others are coming, and there is a considerable opportunity for Australia to position itself as a leading production and export market, but we should also not lose sight of technologies that may present domestic demand for hydrogen as an energy source / carrier.

NRF's Hydrogen team has set out a short overview of some of our key observations and recommendations for the National Hydrogen Strategy below on the 9 areas identified by the Working Group.

Hydrogen at scale

Driving scale will require a multi-faceted approach across the value chain with immediate areas for focus including:

  • Efficiencies in, and transparency of, clear and time sensitive approvals, licensing and permitting pathways both for project implementation and technology introduction
  • Balanced and targeted consideration of funding support for continued growth and diversification of technologies (both production and use)

Attracting hydrogen investment

Key drivers for positioning Australia as a leading hydrogen economy for investment will include:

  • Clear export pathways to maximise competitive offerings to key export markets
  • Harmonisation of regulatory frameworks to limit / remove compliance burdens, duplication of effort and uncertainties in project implementation and market based regulatory gaps

Developing a hydrogen export industry

The export market potential is clear particularly with traditional energy trading partners and Government should play a key role in:

  • Supporting knowledge sharing and community acceptance of hydrogen as an energy source to position Australia as a primary production market
  • Presenting a clear and consistent strategy for the long-term direction of hydrogen production at scale in Australia

Guarantees of origin

A guarantee of origin framework will be essential for Australia to position itself as a key exporter of "green" hydrogen to key export markets with carbon-free policy targets that are set for as soon as 2030. Such a framework should focus on:

  • Separate and complimentary frameworks for domestic and international requirements
  • Encouraging formal participation with bi-lateral agreements from participating APAC states

Community acceptance and safety

Existing regulations and schemes could provide a partial framework for managing carbon emissions (or reductions) of a large-scale national hydrogen industry but key areas requiring immediate attention will include:

  • Community engagement, knowledge sharing and engagement to promote the acceptance of hydrogen as an energy source / carrier
  • Harmonising approvals licensing and permitting pathways for production and use projects including a robust and transparent HSE framework through the full project lifecycle

Hydrogen in the gas network

Actively pursuing solutions to "hydrogen-proofing" the gas network are key and areas of the network in Australia may already by hydrogen-ready. Consistent with our observations and recommendations on other aspects of the consultation, the following immediate actions will be key:

  • Regulatory harmonisation for equipment and HSE standards and certification of new technologies
  • Early and continuous community engagement and knowledge sharing to facilitate acceptance of hydrogen in the Australian market

Hydrogen to support electricity

When coupled with renewable technologies, electrolysis based hydrogen is well placed to manage the inherent variability of renewables and the current Government's reliability requirements; recommendations continue to follow suit:

  • Removal of regulatory barriers and uncertainty to enable hydrogen to act as a swing energy producer (i.e. energy carrier and energy source) and as a storage
  • Facilitating clear and transparent implementation pathways for pilot projects ensuring knowledge sharing and education as primary commitments from market participants

Hydrogen for transport

It is clear that the hydrogen opportunities will include engagement from all stakeholders in the transport industry and will increase further investment in the energy market from non-traditional energy companies. The same priorities will apply for adapting the transport network to facilitate hydrogen transport:

  • Technology support and diversification as leading developments are identified at least cost
  • Clear and transparent approvals, licensing and permitting pathways for project development and / or existing infrastructure adaptation

Hydrogen for industrial users

There are multiple areas within Australia where there is an existing or potential demand for hydrogen from industry and key areas for early focus of pilot and commercialisation schemes will include:

  • Targeted geographical areas with complimentary renewable generation for further piloting and commercial projects using electrolysis technologies with minimal transportation costs
  • Heavy fuel reliant long-haul vehicle fleet replacement with hydrogen fuelled vehicles itself providing demand but also promoting development of transportation and refuelling infrastructure

Our full service team continues to advise participants in the Australian market and globally on these and other areas as the hydrogen economy grows and would be happy to discuss these or other hydrogen related matters with you at any time.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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