Australian Hydrogen Forum 2022: address by Jo Evans

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28 March 2022

Our department’s Deputy Secretary, Jo Evans, gave an address at the 3rd annual Australian Hydrogen Forum on 24 March 2022.

The address provided an update to delegates on how we are progressing with making Australia a major producer and exporter of clean hydrogen by 2030.

Watch the address

Good morning, I am really pleased to be able to speak to you today about the hydrogen industry in Australia. I am speaking to you today from Ngunnawal country here in the ACT where the Ngunnawal people have lived for more than 20,000 years.

I was born overseas like so many other Australians but my father and his mother, both were residents of this area so I feel a strong connection to the Canberra region. And I pay my respects to the Ngunnawal Elders past, present, and emerging, and all First Nations people who are with us today.

First Nations people have witnessed many changes in their country some less welcome than others but the development of the hydrogen industry is something that we want to do together and is very exciting for all Australians and we can all reap the benefit and something that we all want. So I am really keen to tell you what we have been doing on it today.

I am going to use the framework of the National Hydrogen Strategy to talk to you about what we have been doing. It was developed in 2019 so in some ways it’s been here for a while but it is still providing us with a real clear framework on how to develop this industry for Australia.

So the first element of that is this whole sense of national coordination. The Strategy itself was developed in 2019 through a joint process with all of the States and Territories involved through the then COAG Energy Council which has now become the Energy National Cabinet Reform Committee (ENCRC).

It’s still a useful framework today but it also for me represents the joint effort across all of those jurisdictions that underway to make this industry a success. And the really collaborative way in which the work can proceed and needs to proceed into the future.

The strategy recognised that Australia has all the key ingredients to become a major player in the hydrogen industry and the vision is to do that by 2030.

I am very proud of the work my team is doing and there are some members in Sydney with you representing the department and our work that they are doing in collaboration with the States and Territories and with industry to provide the national leadership that we need to maximise the our chances of success.

The next part of the framework that I wanted to talk to you about our international partnerships and engagement. And we’ve already been making a whole lot of progress in this area that’s partly because globally there's already been phenomenal growth in the hydrogen industry as well so there are announcements for investment in the clean hydrogen industry are happening all the time and in the order of hundreds of billions of dollars across the last few years.

We have seen 50 to 100 percent increases in long-term hydrogen demand forecasts year on year and the number of projects in this industry is growing both in number and in size. So there's been recently even significant growth in gigawatt scales. These are really large hydrogen projects and if all of this comes to pass the global industry could be worth or could represent something like 10 percent of total final energy consumption by 2050 so huge growth in the global hydrogen industry

So Australia's vision is to be a major global player by 2030 and our hydrogen strategy sets out a pathway to achieve that. When we did the modelling both for the Strategy and also for Australia's Long Term Emissions Reduction Plan, which we completed last year.

We enabled the government to see the kind of benefits that would accrue to a hydrogen industry in Australia as well as playing a part of getting Australia to net zero by 2050 and enabling the government to make that commitment. The modelling suggests that this is an industry that has the potential to generate over $50 billion in GDP for Australia and to create something like 16,000 direct new jobs and even more jobs, so another 13,000 or so in the renewable energy industries that are needed to support it.

We found when we did the modelling for the Long Term Emissions Reduction Plan and the work that we did with McKinsey that there would also be not just emissions reductions in Australia as a result of a hydrogen industry here but global emissions reductions as well and at a really significant scale.

So we have already made a whole lot of progress we did a State of Hydrogen report last year and during that process we identified more than 80 projects that have already been announced and that means that we are absolutely keeping pace with all of the other countries that are in the race to grow a hydrogen industry globally. And our projects in Australia cover pretty much all parts of the supply chain, so they cover production, gas blending, transport, storage, ammonia production and also export feasibility studies.

So a really broad span of things that are already underway and the other thing that you're already seeing or you're starting to see in the most recent Resources and Energy Projects Report by our Chief Economist here in the department. They included hydrogen for the first time and there's so much interest in hydrogen that actually the number of projects in the pipeline there is something like $185 billion worth of potential investment in this area. And that represents over a third of the projects that are in the pipeline so there's really a whole lot of interest happening and consistent with the Strategy.

So the international partnerships that are there to capture that opportunity for Australia. We already have six countries that we're working directly with Republic of Korea, Japan, Germany, Singapore, the United Kingdom and India and we've also been working through multilateral partnerships so the ones that you might have already heard about today are the International Partnership on the Hydrogen Economy, Mission Innovation, clean energy ministerial, the work that we're doing through the International Energy Agency and also the Quad.

So Quad is just a grouping of the UK, the US, ourselves and India because we have common interests around developing among other things, a clean energy supply chain and hydrogen is a clear part of that. The Prime Minister recently announced there will be a clean energy supply chain summit here in Australia in July and that's partly coming as a result of that work under the multilateral agreements.

All of the work we're doing in these agreements is nestled under our broader approach to emissions reduction in Australia which is to say we are taking a technology led approach to emissions reduction and that work is represented through the Technology Investment Roadmap. Hydrogen is just one of the priorities under that but it's a priority that is underpinned by several of the other technology priorities like carbon capture and storage, like low-cost solar which is the sixth priority added just last year, and even energy storage to a degree.

So hydrogen is underpinned by the other priorities and it equally is a supporter of the green materials priorities that we have there so under the tech roadmap each of those priorities has had a stretch goal set for it for all of the work that the Australian government and encouraging the States and Territories and industry. Encouraging them to all to rally around those targets and help to really push down, to get these things down to a cost where the deployment or rollout of these technologies becomes the natural rational choice for any economic actor.

So hydrogen is clearly a part of those technology priorities and all of those agreements that we have with our international partners are structured around all of these priorities but with hydrogen as a particular focus in almost all of them.

So just as one example of the kinds of things that are happening you know tied up with those relationships on the 21st of January this year we had a specially built ship it was called the, Suiso Frontier. Suiso is hydrogen in Japanese and it came to pick up the first liquefied hydrogen and transport it from the Port of Hastings in Victoria to the Port of Kobe in Japan.

And this is the first project globally to make and transport liquid liquefied hydrogen between two countries by sea and it marks the start of a new major export industry for Australia. This project was part of the Hydrogen Energy Supply Chain pilot project which is happening in the Latrobe Valley in Victoria and it's captured under the spirit of the agreement that we have with Japan.

To give you a couple of other examples of the things we're doing with our international partners if I describe to you the Australian German Hydrogen Innovation and Technology incubator, so this is called HyGATE and it's comprised of a commitment both from the Australian government to put $50 million Australian dollars into research and development to support getting break throughs on the hydrogen supply chain and it's matched by in fact more than matched by $50 million Euros from the German government side.

The clear focus is to bring down the cost of hydrogen technologies. On the Australian side it's going to be managed by ARENA and if you're wanting to get more information about that project you can go and have a look on their website.

The other example that I've got here on this slide and you can see it there with the image of Japan. We've also started the Australian Clean Hydrogen Trade Program and the first tranche of that will be with Japan and that's $150 million to be given as grants to look for projects that secure overseas public or private sector investment or create enabling infrastructure that's all tied around building a Japan-Australia hydrogen supply chain.

So we are going to be looking to some of our other strategic partners to do similar things in the future but this first round under that program will be with Japan tied to our international partnership and agreement.

The last example I was going to give you is just a report that was released in October last year, it's a report called the Australian Hydrogen Export Market to Germany State of Play, this was done as the first report under the HySupply initiative under our Australian-German partnership agreement so there are three parts to that agreement.

You've got HyGATE, you've got HySupply the second one. What this report said is that there is really a lot of potential for Australian hydrogen to supply growing demand in Germany. It said that Australia can be competitive as an exporter to Germany even though the transport distances are long because the shipping distance between the ports in the end is actually a relatively small part of the overall supply chain costs. So a really helpful piece of research that has enabled us to move forward in our partnership with Germany

Okay so there is a lot to tell you about so I did want to use this point to just give you a reminder that we did complete a State of Hydrogen report last year. This is a commitment that was made under the Hydrogen Strategy for us to do every year so that we can keep track of how we're progressing and make adjustments if we need to the approaches that we're taking. We did complete the first one at the end of last year and you can go and read that from our website.

It found overall that we're making good progress but that there were still some challenges, not surprising ones. We need to keep building the demand and we need to keep reducing costs both in the sense of production and in the delivery costs. So yes we're making good progress, yes there are some challenges that remain but our Hydrogen Strategy so far is absolutely standing the test of time and we can continue to pursue it in order to make the next round of progress.

So with that in mind, let me talk to you about some of the things that we are still working on in 2022. So the first one I wanted to talk through is the Guarantee of Origin scheme for Australia. So we know how important this is to all of the parts of the hydrogen industry growing in Australia and Australia is committed to taking a leading role on developing a Guarantee of Origin scheme both internationally and of course here in Australia.

We've made also the commitment that any domestic scheme that we produce will build on or we will make sure that it is harmonized with international certification schemes because there is just no point in having a scheme here that won't connect fully with the customers that we are trying to serve overseas.

So we've been engaging both internationally and domestically to design this scheme. Internationally we've been doing that at a government to government level through the International Partnership on the Hydrogen Economy and in other bilateral arrangements. Every opportunity that we get we are working to agree common accounting methodologies and standards and our approach is very much focused on making sure those underlying metrics used are consistent in all of the schemes.

We also do know and we appreciate that we have to move quickly and in that spirit we do have trials of our Guarantee of Origin scheme for hydrogen that have already been launched as of December of last year. So that's being run by the Clean Energy Regulator and our intention there is to test the approaches that we have in mind and refine them based on real life experience or based on your reactions to the things that we have and then we will modify and adjust the scheme so that we get it right and we are making sure as I said that we are absolutely speaking with the customers who are going to be buying our hydrogen overseas to make sure that the scheme that we are developing for the Guarantee of Origin meets their needs as well.

So we have also been working on the National Hydrogen Infrastructure Assessment and I know some of you are aware of this because there has been quite a bit of consultation on this and that's a hallmark of the work and approach that we are taking on developing the hydrogen industry in Australia.

So we've been out and we have we've been using ARUP so this slide I've stamped it there as a preliminary draft because I know that the report is not yet released and I know that there's lots of people who are very keen to see it but it gives you an idea of the kinds of mapping that is being done through that assessment we've been out talking with the states and territories with industry and with as many people as we can to get the best sense of what is the infrastructure that is either in place or that is needed to actually make the hydrogen industry a success and enable it to grow in Australia.

So to make that assessment we need to understand electricity and gas networks, we need to understand water supply networks, we need to understand where the refuelling stations might go, where the roads are, where the rails, where the ports are, that might have a role in the hydrogen industry and all of that we have to do while taking account of local community concerns and local community priorities.

So as I said last year extensive consultation with industry and research communities about the assumptions that underpin this report and the assessment has then used those assumptions and developed a range of scenarios because of course we don't know exactly how the hydrogen industry is going to develop in Australia.

So we need to think about well what if it developed in this way what would that look like and then alternatively if it took a slightly different path, what would that look like. So the Hydrogen Infrastructure Assessment when you do get to see it, which I hope will be soon because it is a very substantial piece of work and one that the team's been working really hard on. 

When you see it, it will spark debate about the best way to approach these things and it will also give us you know the idea behind it is it gives us a national perspective of the national infrastructure requirements and gives us a platform, a shared platform that we can use to discuss the options for the future and maybe the last thing that's important to note on this particular aspect of the National Hydrogen Strategy is that this is something we plan to do every five years so stand back reassess relook at the infrastructure has that has been developed and what is still needed and take that forward every five years.

All right so the last significant piece I wanted to talk to you about is the support for trials, pilots and hubs under the National Hydrogen Strategy so I've already mentioned the 80 projects that were identified in the State of the Hydrogen report and the 137 projects that are in the resources quarterly so that's part of the investment that's happening all across the country in Australia and at the State and Territory levels and the Australian government alone and I’m conscious that it isn't the only investor in this space but the Australian government alone has put $1.4 billion into hydrogen projects.

So a couple of examples this slide just gives you a bit of a sense of the investments that are happening in hydrogen research and development so from the commonwealth's perspective that's happening mostly through ARENA, the Clean Energy Finance Corporation and the CSIRO.

Lots of examples, I think the best thing to do is go and have a look at their websites about what's going on but perhaps to call out just the kind of richness that's there underneath the surface if you look at the CSIRO Mission on Hydrogen, underneath that program you've got another sort of sub program that is about hydrogen research development and demonstration collaboration with international partners, and also an Australian hydrogen researcher network to make sure that we're actually pulling the people who are working on this at an R&D level together and getting them to solve the problems as collaboratively as they can.

And then the other significant program I just wanted to touch on quickly is the Clean Hydrogen Industrial Hubs program so this is a $464 million investment by the Australian government again to complement work that is already underway or is happening in the States and Territories and that the objective behind it is to find locations where producers, users and exporters can be co-located so that there's an opportunity to create demand, build scale and drive down those costs.

We went out seven really prospective locations that were based on the original Hydrogen Strategy when that program was launched but applications were invited from right across Australia and there was a really good healthy competition there and I believe there should be some announcements coming in the next few weeks.

And that's got two elements to it both design and implementation grants so we recognize that in some places it might be too early to get right onto the ground and start doing the work so there's two streams there that support some early work as well as the actual start of the hubs.

So the last thing I wanted to mention is just to do a quick recap of all the other elements of the strategy that are being managed by States and Territories among others that are contributing to the overall national success that we're going to have in building a hydrogen industry here in Australia.

We are continuing to explore how to best shape the domestic regulatory system so that the Australian hydrogen industry can flourish and that means looking at lots of legal frameworks to support industry development including the blending of hydrogen into domestic gas networks, so this work is already underway through the Energy National Cabinet Reform Council and other places.

We're also working to advance a hydrogen ready workforce so getting consistent national training and materials available for how to produce handle and use hydrogen safely and we're continuing to look at developing hydrogen skills and training for emergency and first responders as well and of course work is underway on community engagement to make sure we address any of those sort of lingering concerns that exist around safety and the environment in relation to hydrogen.

So there is a lot of work still to be done but with the enthusiasm focus and effort we've already seen from industry and across all Australian Governments, I have every confidence that Australia's vision for a clean, safe, globally significant and competitive Australian hydrogen industry that benefits all Australians can absolutely be achieved. So hopefully I have left time for questions and thank you very much.