Australia's renewed strategy eyes 15 MMt/y green hydrogen output by 2050

Australia expects to produce 15 million metric tons per year of renewable hydrogen by 2050 as part of its renewed national strategy, setting the fledgling industry on a path for growth, Minister for Climate Change and Energy Chris Bowen said Sept. 13.

Bowen also announced a deal between Australia and Germany for renewable hydrogen supply chains, facilitated through a A$660 million ($440 million, Eur400 million) auction under the H2Global program to guarantee European buyers for Australian hydrogen producers.

The new hydrogen strategy targets base green hydrogen exports of 200,000 t/y by 2030, with a stretch potential of 1.2 MMt/y. The 2050 stretch goal is 30 MMt/y.

"The strategy reflects the developments in technologies, markets and the international policy landscape over the past five years and builds on the early foundations for industry growth," Bowen said at the Asia-Pacific Hydrogen 2024 Summit and Exhibition in Brisbane.

Australia is well placed to tap the nascent global hydrogen economy, with the International Energy Agency estimating more than 20% of announced hydrogen projects are in Australia, with a pipeline valued at more than A$200 billion, Bowen said.

The government funding comes through an estimated A$8 billion announced in the 2024-25 Federal Budget as part of a Future Made in Australia, Bowen said.

"We anticipate it will help sustain at least 10-20 large projects both for exports and domestic manufacturing, and collectively this could support at least 5 GW of electrolyzer capacity by 2030, producing over 1 MMt of hydrogen annually," he said.

Australia issued its National Hydrogen Strategy in 2019 as a blueprint to develop large manufacturing capabilities and capitalize on export opportunities.

H2Global auction

Germany and Australia will each contribute Eur200 million for the H2Global auction, which facilitates imports and exports of renewable hydrogen derivatives such as ammonia and methanol, from low-cost production regions to Northwest Europe.

The initial hydrogen purchase auction, scheduled to start in 2025, aims to help bridge the price gap between hydrogen production costs and market prices in Europe. Hintco, the company conducting the auctions, is targeting the first annual sales auctions for 2027/28, H2Global said in a statement Sept. 13.

The scheme will be available over the next 10 years, and the two countries will work together on design elements, Bowen said.

Hintco CEO Timo Bollerhey said H2Global now had Eur5.83 billion of funds committed.

In March, Canada and Germany set out plans for a joint hydrogen financing window under the H2Global import scheme.

And in July Fertiglobe won the first H2Global ammonia import tender, at a price of Eur1,000/t.

The latest partnership comes on the back of existing plans between Australia and Germany including Hydrogen Accord, HySupply and HyGate which will continue to expand, Bowen said.

Australia production costs

Australia's new strategy pointed to green hydrogen production costs in the range of A$5-A$10/kg ($3.4-$6.7/kg), though this could fall substantially by 2050.

The Platts Hydrogen Price Wall(opens in a new tab) shows Western Australia hydrogen produced via alkaline electrolysis (including capex) at an average of $4.68/kg in August, compared with $6.81/kg in Northwest Europe (Netherlands, based on month-ahead grid power prices). Platts is part of S&P Global Commodity Insights.

By 2050, renewable energy costs are expected to fall by 40%-60%, while electrolyzer costs could fall by 88%-94%, the strategy document showed. Renewable energy is the biggest component of hydrogen production costs.

"These expectations accord with other analyses which indicate hydrogen production costs at the 'farmgate' are projected to fall below $2/kg by 2050 in many locations, positioning Australian projects among global leaders," it said.

The strategy includes the ongoing A$4 billion Hydrogen Headstart and the newly announced A$2/kg Hydrogen Production Tax Incentive to close the gap between costs and market price.

The strategy highlighted the Central Queensland Hydrogen Hub, one of the finalists in the Headstart program, which could deliver A$17.2 billion in hydrogen exports.