The Clean Energy Council welcomes today’s announcement of a second large-scale green hydrogen project to benefit from the first round of the Government’s $2 billion Hydrogen Headstart program announced in the 2023-24 Budget – with a $432 million investment in Orica’s Hunter Valley Hydrogen Hub set to replace its reliance on gas at its Kooragang Island operation in NSW, with green hydrogen.
Clean Energy Council General Manager - Advocacy and Investment, Anna Freeman, said green hydrogen is strategically important to Australia’s long-term clean industrial growth opportunities, and welcomed the Government’s sustained and substantial effort to get the sector off the ground.
"Green hydrogen stands to play a critical role in decarbonising hard-to-electrify energy needs and chemical processes that are currently dependent on fossil fuels. We urgently need to drive down the cost of this renewable fuel to support Australia's decarbonisation plans,” Ms Freeman said.
“Hydrogen Headstart, which provides a credit for hydrogen produced over a ten-year operating period, is all about helping to build the scale of Australian green hydrogen production, and over time, driving down costs.It is great to see a major ammonia manufacturer in Australia making the shift to renewable-based ammonia production.Anna Freeman Clean Energy Council General Manager - Advocacy & Investment
More than half of the world’s hydrogen is used for the production of ammonia, which is a critical component in fertiliser production, as well as plastics, explosives and textiles. Today, almost all of that hydrogen is derived from fossil-based gas.
Green hydrogen – made through a process of electrolysis using renewable energy to split water into hydrogen and oxygen – replaces the need for fossil fuel-based hydrogen in ammonia production.
Renewable hydrogen projects in Australia are complex and challenging, but remain strategically important given that green hydrogen could be instrumental to domestic green iron processing and clean fuels production for long-haul heavy transport.Anna Freeman Clean Energy Council General Manager - Advocacy & Investment
“Substantial public investment will be required to help first mover projects bridge the commercial gap between the cost of production and available market prices, as well as to develop the enabling common infrastructure for these major projects. However, over time as offtake markets develop, local know-how improves and production costs decline, the expectation is that more projects can become commercially viable in their own right,” she said.
The Clean Energy Council also welcomed the announcement by the Government that it will open industry consultations on a second round of Hydrogen Headstart.
“Both the market conditions and the domestic and international policy settings have continued to shift since the Expression of Interest phase for round one in 2023. It will therefore be important for the Government to engage closely with industry to test future investment appetite, and the best way to structure a new competitive tendering process,” Ms Freeman said.
ENDS
For more information or to arrange an interview, please contact:
Liam Straughan
Clean Energy Council Media Officer
+61 409 470 683
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