Australia plans to spend $417m on hydrogen production and carbon capture

Out-Law News | 29 Apr 2021 | 7:48 am | 1 min. read

Australian government has made AU$539.2 million ($417m) available in its 2021/22 budget for hydrogen production and carbon capture, use and storage (CCS/CCUS) projects.

The money will be spent on building new hydrogen-producing hubs and carbon capture technologies, which will create more than 2,500 jobs while reducing Australia’s greenhouse gas emissions, a statement said.

AU$275.5m ($214.8m) will be used to develop four additional clean hydrogen hubs in regional Australia and implement a clean hydrogen certification scheme. The remainder of the funds will be used to develop CCS/CCUS projects and hubs.

George Varma of Pinsent Masons, the law firm behind Out-Law, said: "It is fantastic to see this level of investment and commitment by the Australian government to develop its domestic hydrogen market. As a participant in the Western Australian hydrogen technology cluster, it is very pleasing to see funding allocated to the development of clean hydrogen hubs.” 

“Implementing a hydrogen certification scheme will no doubt create a new industry within the hydrogen sector and make Australian's hydrogen exports more attractive as Australia's hydrogen exports can be supported by an auditable supply chain. We expect to see hydrogen certification schemes adopted in countries looking to export hydrogen into the international market," he said.

The government is actively looking for opportunities to collaborate on low emissions technologies with countries such as Germany, Japan, Singapore, South Korea, the UK and the US.

"The number of collaborations between Australian companies and companies headquartered in Germany, Japan and South Korea, in particular, is very promising and demonstrates how the collaboration agreements signed by these countries has been an effective way of encouraging cross-jurisdictional collaboration," Varma said.

The Clean Energy Council, a body for the clean energy industry in Australia, described the additional $214.8m investment a positive step, and said it should be targeted at 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)".

In a separate announcement, Australian government said that AU$565.8m ($441.1m) of the 2021/22 budget would be allocated to support low-emission international technology partnerships and initiatives through co-funded research and demonstration projects.