The Australian economy is uniquely placed to play a key role in the rise of hydrogen, creating a big opportunity for local businesses. The opportunity lies not just on the direct export side - although that could be large as overseas demand grows - but also in utilising existing natural resources to produce green hydrogen and steel, for both domestic and export purposes.
"Australia can’t afford to be complacent. Other economies are already moving to position themselves as hydrogen leaders, including in the US”
What’s clear is Australia can’t afford to be complacent. Other economies are already moving to position themselves as hydrogen leaders, including in the US, where recent policy announcements have signalled an intention to grow their hydrogen capability. In Saudi Arabia, NEOM Green Hydrogen Company has secured US$8.4 billion in funding for a green hydrogen production facility.
But Australia has a few tricks up its sleeve as well – including an existing $127 billion pipeline of announced hydrogen investment, according to the DCCEEW. There’s little wonder why – some estimates put the size of the hydrogen export opportunity in Australia at $10 billion by 2030.
In South Australia, the state government plans to construct what could be the world’s largest green electrolyser and hydrogen power plant. In Western Australia the Yuri Renewable Hydrogen to Ammonia Project is another large-scale investment.
The latter project highlights hydrogen’s versatility as a fuel and why many see the commodity as a ‘Swiss army knife’ solution. In many ways the best application for hydrogen in the shift to net-zero has yet to be settled. That’s part of why the opportunity is so vast.
New energy: a capital idea
Banks and export credit agencies are really going to be key providers of capital in this opportunity. In 2022, ANZ put together the ANZ Hydrogen Handbook to help our customers better grasp the scale of what is happening in the space.
In another sign of ANZ’s commitment to the shift to net zero, the bank has added a fourth ‘arm’ to its project and export finance team – which previously consisted of infrastructure, renewable energy and resources pillars. The new vertical of ‘new energy’ will better support our customers in developing markets like hydrogen.
The bank is already having detailed discussions with clients and these are expected to increase over time, particularly in Australia where policy support is growing.
Various state governments have announced strategic approaches, while at a Federal level the Hydrogen Head Start program will provide revenue support for selected large-scale projects through production credits.
The $2 billion program is a fantastic proposal that will drive investment in projects, support bankability and galvanise support for hydrogen in Australia.