Australia

Australian Government – Hydrogen Industry Policy Initiatives

The National Hydrogen Strategy

In November 2019, the COAG Energy Council endorsed Australia’s National Hydrogen Strategy (‘Strategy’). The Strategy was informed by an extensive series of COAG Energy Council commissioned studies and research reports and analyses.

Aus hydrogen report The Strategy describes an adaptive approach to industry development (being ready to move quickly to scale up as signs of large-scale markets emerge) using a ‘review-revise-adapt’ feedback loop that would support and refine actions as technology and markets change.

The adaptive approach is focused on actions that remove market barriers, efficiently build supply and demand, and accelerate the global cost-competitiveness of Australia’s hydrogen industry. The approach is guided by four principles:

Take an adaptive and nationally coordinated approach to support industry development, including regular reviews.
Prioritise regulatory consistency and a coordinated approach to project approvals.
Support partnerships to activate the market.
Put safety, environmental sustainability and benefits to Australia at the forefront.

A key element of the approach is the creation of hydrogen hubs – clusters of large-scale demand. The Strategy notes:

“These may be at ports, in cities, or in regional or remote areas, and will provide the industry with its springboard to scale. Hubs will make the development of infrastructure more cost-effective, promote efficiencies from economies of scale, foster innovation, and promote synergies from sector coupling. These will be complemented and enhanced by other early steps to use hydrogen in transport, industry and gas distribution networks, and integrate hydrogen technologies into our electricity systems in a way that enhances reliability.”

The Strategy document concludes with 57 strategic ‘nationally coordinated government actions’ focused on streamlining regulation, skills and training, community engagement, supporting research, pilots, trials and demonstrations, using clean hydrogen in gas networks and transport, opening international markets, developing a certification scheme, and encouraging commercial investment.

For more information visit https://www.dcceew.gov.au/energy/hydrogen

In February 2023, the Energy and Climate Change Ministerial Council included, in its meeting communique, that “Ministers agreed the Commonwealth would lead jurisdictions in a Review of the National Hydrogen Strategy to ensure the national strategy positions Australia on a path to be a global hydrogen leader by 2030 on both an export basis and for the decarbonization of Australian industries. The review of the Strategy will take account of developments globally and in Australia since the original strategy was developed, including the impact of the Inflation Reduction Act in the United States and policies by other countries to support a hydrogen industry.”

Consultations on the review of national hydrogen strategy are underway between 7 July – 18 August 2023.

State of Hydrogen Report

The Australian Government has published two State of Hydrogen reports as part of delivering Australia’s National Hydrogen Strategy. In April 2022, the Government released the State of Hydrogen 2021 report. The second iteration, the State of Hydrogen 2022, was released in April 2023. The report covers, amongst other things, the development of Australia’s hydrogen industry so far and how it compares to the rest of the world and what governments around Australia are doing to advance the industry.

Funding and Support

Several major funding programs are supporting hydrogen industry development, including:

AUD$2 billion for Hydrogen Headstart, announced in the (May 2023) 2023-24 Federal Budget, would provide revenue support for large-scale renewable hydrogen projects through competitive hydrogen production contracts. This investment is intended to help bridge the commercial gap for early projects. Consultations on the design of the Headstart Program were undertaken between 7 July – 3 August 2023. In October 2023, the Australian Government announced the program was open to applications, with Expressions of Interest open until 10 November 2023. On 21 December 2023, ARENA (as the program administrator) announced that six applicants have been shortlisted and invited to submit a full application in the next stage of the Hydrogen Headstart Program.
Over AUD$500 million is being made available under the Regional Hydrogen Hubs Program to enable the rollout of hydrogen hubs across Australia (see sections below on ‘Investments in Regional Hydrogen Hub Development’ and ‘October 2022-23 Federal Budget’).
ARENA (excluding the German-Australian HyGATE funding initiative – see below) has committed over AUD$280 million to hydrogen R&D projects, feasibility studies, pilot and demonstration plants (including grants funding made available as part of its Renewable Hydrogen Deployment Funding Round).
The CEFC Advancing Hydrogen Fund makes available up to $AUD300 million in debt and equity finance to invest in projects that align with the National Hydrogen Strategy.
The Commonwealth Government provided AUD$50 million to support construction of the Hydrogen Energy Supply Chain – Pilot Project (with a similar contribution provided by the Victorian Government). Following completion of the pilot project phase, in early March 2023, Japan Susio Energy announced it had chosen to allocate its Japanese Government’s Green Innovation Fund grant of ¥220 billion Japanese Yen (approximately AUD$2.35 billion) to the commercial demonstration phase of the HESC Project in Victoria.
AUD$44.9 million was allocated from the Modern Manufacturing Initiative to support Fortescue Future Industries (FFI) to build an electrolyser manufacturing facility in Aldoga, Gladstone, Queensland.

Investments in Regional Hydrogen Hub Development

The Australian Government has announced planned investments of almost AUD$514 million to support the rollout and development of regional hydrogen hubs across Australia. The announced locations for the hubs are Gladstone, Port Bonython, Bell Bay, Pilbara, Kwinana and the Hunter Valley, and a there is a commitment for a further hub in Townsville. The funding includes support for nine development and design (feasibility) projects.

October 2022-23 Federal Budget

The (October 2022) 2022-23 Federal Budget, as well as confirming AUD$514 million to support regional hubs development and implementation, also included several funding allocations of relevance to regional hydrogen hubs (and wider hydrogen industry) development, including:

Allocation of AUD$1.5 billion in planned equity to support the construction of common user marine infrastructure within the Middle Arm Sustainable Development Precinct at Darwin in the Northern Territory, with the aim to further develop export opportunities in Northern Australia for commodities such as green hydrogen and critical minerals.
Allocation of AUD$565 million to invest in enabling infrastructure in the Pilbara region of Western Australia to support emerging green industries and technologies.
Allocation of AUD$100 million to support the Port of Newcastle and the Hunter region of New South Wales to become hydrogen-ready.
AUD$2.2 million to enable a low emissions future and support green markets through consultation and policy design work for creating a Guarantee of Origin scheme.

Driving the Nation Fund

The Driving the Nation Fund includes up to AUD$80 million to help reduce transport emissions and support hydrogen infrastructure for key freight routes. The program will work with the States and Territories to create a national Hydrogen Highways refuelling network, with an investment of up to AUD$80 million to deliver up to 16 refuelling stations on Australia’s busiest freight routes.

Hydrogen Ready Provision

The Commonwealth has provided AUD$5 million to make the Tallawarra B power station under construction in the Illawarra region to be hydrogen ready. The Tallawarra B open cycle gas turbine will be able to produce 316 megawatts.

Guarantee of Origin Hydrogen Scheme

The establishment of a domestic hydrogen Guarantee of Origin scheme is a priority task under Australia’s National Hydrogen Strategy.

In May 2020, the Australian Government began consulting on the design of a proposed scheme, which would provide future consumers with transparency over the carbon emissions, along with other characteristics such as the type of technology and energy source, associated with hydrogen production. In June 2021, a discussion paper on the design of a hydrogen Guarantee of Origin scheme for Australia was released for consultation, with a consultation summary and next steps made available online in December 2021.

In December 2021, the Government commenced a trial phase with industry, through which industry members with operating or well-advanced pilot projects for hydrogen were invited to test the practical application of Guarantee of Origin methodologies over an 18-month period.

In December 2022, the Government consulted on the proposed design of Australia’s Guarantee of Origin Scheme. The proposed design provides:

a mechanism to track and verify emissions associated with hydrogen, hydrogen derivatives and other products made in Australia.
an enduring mechanism for renewable electricity certification which could support a variety of renewable energy claims.

The Government will commence the drafting of legislation and work with stakeholders on the detailed design of the scheme. AUD$38.2 million was allocated in the (May 2023) 2023-24 Federal Budget to support the implementation of the scheme. It is intended to commence in 2024.

National Hydrogen Regulatory Review

The National Hydrogen Regulatory Review is a cross jurisdictional process led by the Commonwealth to identify barriers in the regulation of hydrogen through a review of existing hydrogen regulation and provide recommendations to Energy Ministers on how to improve the regulation of Australia’s hydrogen industry and support its safe and efficient development.

In April 2023, the Australian Government published a Hydrogen Regulatory Map of key legislation by the Commonwealth.

Work is underway to deliver the following National Hydrogen Codes of Best Practice:

Hydrogen Production Safety
Ammonia Production Safety
Hydrogen Refuelling Stations
Hydrogen Appliances, Plant and Equipment Compliance
Ammonia Appliances, Plant and Equipment compliance.

Hydrogen Technology Cluster Australia (H2TCA)

National Energy Resources Australia (NERA), one of the Industry Growth Centres funded by the Australian Government, launched its Regional Hydrogen Technology Clusters Seed Funding Program in September 2020. The program provided seed funding of up to AUD$100,000 per successful applicant to develop a hydrogen technology cluster in a specified region within Australia. In February 2021, NERA announced a national network of 13 successful hydrogen technology clusters (with the creation of two further clusters announced in May 2021 and an additional three clusters announced in December 2021). In February 2023, the government announced that NERA will wind up in July 2023 and options are being explored to support this initiative.

First Nations Engagement

In the (May 2023) 2023-24 Federal Budget, AUD$2 million was allocated to establish a fund to support First Nations people and businesses to engage with hydrogen project proponents, planning processes and program design.

International Partnerships

The Australian Government is pursuing opportunities to collaborate on low emissions technologies with Germany, Japan, Singapore, South Korea, India, the United Kingdom, the Netherlands and the United States. These partnerships will target making technologies such as hydrogen cheaper than traditional alternatives.

These partnerships co-fund research and demonstration projects aimed at reducing the costs of low emissions technologies such as hydrogen and facilitating their deployment and export.

Complementary announcements that form part of the commitment to build new international technology partnerships include:

The announcement, in June 2021, of a AUD$30 million partnership between Australia and Singapore to accelerate deployment of low emission fuels and technologies like clean hydrogen to reduce emissions in maritime and port operations. Under the partnership, each country would commit up to AUD$10 million over five years to fund industry-led pilot and demonstration projects, with at least AUD$10 million of additional investment expected to be leveraged from industry.
The announcement, in June 2021, of the Declaration of Intent between the Government of Australia and the Government of Germany on the Australia-Germany Hydrogen Accord; the Accord included three major initiatives:
- Establishing the German-Australian Hydrogen Innovation and Technology Incubator (HyGATE) to support real-world pilot, trial, demonstration and research projects along the hydrogen supply chain. Australia and Germany have respectively committed up to AUD$50 million (administered through ARENA) and €50 million to establish HyGATE. In January 2023, the Australian and German Governments announced funding for four joint projects under the HyGATE initiative.
- Facilitating industry-to-industry cooperation on demonstration projects in Australian hydrogen hubs.
- Exploring options to facilitate the trade of hydrogen and its derivatives produced from renewables (such as ammonia) from Australia to Germany, including through Germany’s H2Global Initiative.
The announcement, in June 2021, of a Japan-Australia Partnership on Decarbonisation through Technology; amongst other things, the announcement includes a commitment to jointly support initiatives to help drive the transition to net zero emissions, with a joint focus on lower emissions LNG production, transport and use; clean fuel ammonia, clean hydrogen and derivatives produced from renewable energy or from fossil fuels with substantial carbon capture, utilisation and storage; carbon capture utilisation and storage; carbon recycling; and low emissions steel and iron ore.

The announcement, in July 2021, that the United Kingdom (UK) and Australian Governments signed a Letter of Intent between the two countries to establish a partnership on low emissions solutions; cooperation will focus on research and development across six key technologies, including clean hydrogen. In December 2023, a joint funding call for Australian and UK green hydrogen projects was opened as part of the Australia-UK Renewable Hydrogen Innovation Partnerships Program. AUD$10 million in funding will be available for Australian projects over two years. Funding will be matched by Innovate UK to support UK partners on these joint projects.
The announcement, in October 2021, of an Australia-Republic of Korea Low and Zero Emissions Technology Partnership; collaboration would occur on a range of technologies, including clean hydrogen and clean ammonia supply; low emissions iron ore and steel; hydrogen fuel cell electric vehicles; hydrogen power generation; carbon capture, use and storage; energy storage; solar; and the critical minerals supply chain. Following on from this high-level partnership, in December 2021, it was announced that Australia and the Republic of Korea had agreed detailed work plans on clean energy technology and critical minerals. Australia announced an initial commitment of AUD$50 million, with matched funding from the Republic of Korea (subject to domestic processes) – while collaboration will occur on a range of new technologies, initial focus is on initiatives in clean hydrogen and other derivatives.
The announcement, in January 2022, of the AUD$150 million Australian Clean Hydrogen Trade Program (ACHTP), will support Australian-based hydrogen supply chain projects that secure overseas public or private sector investment. The first round of the Program will focus on the export of clean hydrogen to Japan under the above-noted Japan-Australia Partnership on Decarbonisation through Technology.
The announcement, in January 2023, of the signing of a Memorandum of Understanding (MoU) with the Netherlands to support the development of a renewable hydrogen supply chain from Australia to Europe.
In May 2023, Australia and the United States commit to enhance bilateral cooperation under a Climate, Critical Minerals and Clean Energy Transformation Compact, establishing climate and clean energy as a central pillar of the Australia-United States Alliance. In particular, it refers to supporting the development of emerging markets for clean hydrogen and its derivatives.
in May 2023, the signing of the Terms of Reference of the Australia-India Green Hydrogen Taskforce was announced. The Taskforce is to comprise Australian and Indian experts in renewable hydrogen and report to the Australian-Indian Ministerial Energy Dialogue on the opportunities for Australia and India to cooperate in the area of renewable hydrogen.

HySupply: German-Australian Supply Chain Feasibility Study of Hydrogen produced from Renewables

In September 2020, the Australian Government and German Federal Government signed an agreement to jointly fund a feasibility study to investigate a supply chain involving the production, storage, transport and use of hydrogen (including hydrogen-based energy carriers, such as ammonia) produced from renewables. Under the name HySupply, a consortium of Australian and German research and industry partners published the study in January 2023.

CSIRO Hydrogen Industry Mission

The CSIRO Hydrogen Industry Mission was formally launched in May 2021; a key aim of the Mission is to enable the scale-up of Australia’s domestic hydrogen industry as a stepping stone to a clean energy export industry. The Mission is supported by AUD$38 million from CSIRO, with contributions of AUD$18 million from industry partners and AUD$12 million from the Australian Government.

In July 2021, the Commonwealth announced the allocation of AUD$5 million to the CSIRO-led Hydrogen RD&D International Collaboration Program, aimed at strengthening research connections, collaboration and knowledge sharing between Australian research institutions and leading international hydrogen research organisations.

National Reforms to Support Clean Hydrogen and Biogas Blending

In October 2022, Energy Ministers agreed to amendments to the National Gas Law and Regulations to bring hydrogen blends, biomethane and other renewable gases under the national gas regulatory framework. The new measures are intended to take effect subject to passage through the South Australian Parliament, likely in 2023. The Ministers also released a policy paper that provides an overview of the final reforms and includes several case studies that explain how the regulatory framework would apply to different renewable gas project types.

Updated: December 2023