Australia’s new 'clean' hydrogen move doesn’t go far enough, critics say

Clean Energy group says govt funding should be targeted at low-cost renewable hydrogen hubs, not at locking in expensive fossil fuel-based hydrogen for longer through the use of carbon-capture-storage

Australia’s new 'clean' hydrogen move doesn’t go far enough, critics say
Critics say the Morrison government is beholden to the mining sector and fossil fuel lobby. But the federal and some state governments, plus key players in the private sector are investing in a range of hydrogen projects, while wind and solar power projects are also roaring ahead. File photo of Ulan Coal mine in Mudgee, NSW by Reuters.   

(ATF) Australia is continuing to push the clean energy envelope, leaving most of the rest of the Asia-Pacific region behind, but the Morrison government's moves continue to draw domestic criticism. 

Last week, Canberra announced that it will invest a further A$539.2 million (US$420.25 million) to develop clean hydrogen and carbon capture storage (CCS) projects in the country.

Some A$275.5 million of that amount will be earmarked to accelerate the development of four additional clean hydrogen hubs and a clean hydrogen certification scheme in regional Australia. The remaining balance will fund development of CCS projects.

"I want Australia and hydrogen technology to be synonymous around the world," Australian Prime Minister Scott Morrison told reporters in New South Wales after the announcement was made.

These announcements came shortly before US President Joe Biden-hosted a global climate summit last Thursday and Friday, which called on industrialized countries to do more to lower their emissions levels.

However, since the new Aussie plan calls for hydrogen still produced by burning fossil fuels, it drew immediate backlash.

The Melbourne-based Clean Energy Council (CEC), a non-profit renewable energy group and lobby, said the move was welcome but questioned why the government would invest in fossil-fuel based hydrogen production even if it uses CCS technology.

“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 CCS.”

It said the plan was a move in the right direction but also warned that “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 realize the enormous economic opportunities in a carbon-constrained world.”

It also questioned the move by saying CCS is “a technology that has proven to be very expensive and challenging to integrate into Australia's aging coal-fired generation fleet.”

More details are needed to understand how the government's commitments will aid renewable hydrogen investment, the group said.

"Australian taxpayers have very little to show for over A$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,” it concluded.

Beating a path to Australia 

However, what the CEC failed to mention is that the Morrison-led government is also ramping up green hydrogen infrastructure development.

Green hydrogen, for its part, leaves no carbon footprint but to date hasn’t reached fossil fuel cost parity with oil, coal and gas production, nor has it reached economies of scale. Cost parity could begin in as little as a year or take as long as the rest of the decade, depending on whose modeling and forecasting you use.

However, just last week French oil and gas major Total SA said it was considering joining an 8-gigawatt Australian green hydrogen megaproject in Western Australia’s Gascoyne region. 

The same day Lion Energy said it was interested to “explore opportunities” in green hydrogen in Australia and on Seram Island in Indonesia. The company, which is Indonesia-focused but listed as an Australian firm, has received firm commitments for A$2.8 billion from its capital-raising round to conduct feasibility and related studies. Other firms are striking similar green hydrogen deals in Australia.

Offsetting GHG emissions

Australia, for its part, even given its small population of only 26 million, is one of the world’s largest polluters per capita, mostly due to its coal and natural gas production. The country is the world’s largest coal exporter and its largest exporter of liquefied natural gas (LNG), boasting a world-leading 80 million tonnes per annum (mtpa) of liquefaction capacity.

Australia’s greenhouse gas (GHG) emissions fell in 2019, however, but only marginally, by just 0.9% as increasing emissions from LNG export plants largely offset declines in the power and farm sectors, according to government data.

By last year, due to both the onset of the Covid-19 pandemic and several lockdowns in the country, as well as more solar and wind power infrastructure build-out, those emissions dropped again – but this time by a more substantial rate.

For the last quarter of 2020, Australia’s emissions were projected at 123.7 million tonnes of carbon dioxide equivalent (Mt CO2-e), down some 4.7 Mt CO2-e from the previous three-month period. Notably, the dip came amid a surge in renewable energy which offset demand for coal-fired power generation, data from consultancy Ndevr Environmental shows.

More than 260 GW of renewable energy was added globally in 2020, surpassing 2019’s previous net increase record by almost 50%, data from the International Renewable Energy Agency (IREA) found. Australia’s pace of growth was almost double the global average, coming in at 18.4%.

In a separate announcement, the Australian government said that A$565.8 million in the budget will be earmarked for supporting low-emissions international technology partnerships and initiatives through co-funding research and demonstration projects.

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Australia Hydrogen govt projects carbon capture storage Clean Energy Council Total Lion Energy LNG GHG emissions coal solar wind power