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Hydrogen funding welcomed but no replacement for greater climate ambition

Ahead of this week's climate summit with US President Joe Biden, the Clean Energy Council says that Prime Minister Scott Morrison’s announcement of an additional $275 million to support the development of a further four hydrogen hubs is a positive step.

However, in line with Australia's role in the global effort to reduce greenhouse gas emissions, it is critical that government funding be targeted at supporting low-cost renewable hydrogen hubs and not at locking in fossil fuel-based hydrogen for longer through the use of carbon capture and storage (CCS). More detail is required to measure the potential impact of the Federal Government's commitments and understand how they will support renewable hydrogen investment.

The Clean Energy Council cautions that while this commitment is a step in the right direction, the scale of the emissions reductions announcements being made globally mean that a clear commitment to net-zero emissions and a strong roadmap for transitioning to clean energy remains essential for Australia to realise the enormous economic opportunities in a carbon-constrained world.

"Planning and delivering the strategic infrastructure to support the production, distribution and export of renewable hydrogen is critical to our aspirations to become a leading renewable hydrogen producer for our region, and this funding is urgently required," says Clean Energy Council Chief Executive, Kane Thornton.

Renewable hydrogen represents a massive new market opportunity for Australia. Deloitte has forecast that the sector could be worth up to $26 billion annually in additional GDP and generate 16,900 new jobs by 2050.

The hydrogen funding includes $20 million for up to 10 feasibility studies to study the best locations for hydrogen hubs, and we expect an objective and competitive process for selecting hub sites.

"International markets want renewable hydrogen to replace natural gas, and it makes more sense for the government to move away from natural gas by accelerating the competitiveness of renewable hydrogen, rather than prolonging the life of fossil fuel-based energy.

"We are concerned, however, that the government has earmarked a further $260 million to CCS, a technology that has proven to be very expensive and challenging to integrate into Australia's aging coal-fired generation fleet," says Thornton.

"Australian taxpayers have very little to show for over $1 billion spent so far in support of CCS, and it would be a far better outcome to channel this funding into driving down the cost of renewable hydrogen."


For more information or to arrange an interview, contact:

Jane Aubrey
Clean Energy Council Media Manager
[email protected]
+61 409 470 683