From The Conversation (21/5/24)…
Will government investment make green hydrogen a reality in Australia
In the budget last week, the government was keen to talk about its efforts to turn Australia into a renewable superpower under the umbrella of the Future Made in Australia policies.
Future Made is a framework that sets out how to target green subsidies to drive investment in everything from solar to critical minerals to green hydrogen. The policy lands at a time when the world is racing towards a future green economy. America has its Inflation Reduction Act, while the European Union has its Green Deal and China has powered ahead with green technologies.
The government hopes to make the most of Australia’s comparative advantage in this global context. Over 50 countries now have policies like this.
Future Made includes $1.9 billion in new funding for the Australian Renewable Energy Agency, $7 billion in tax incentives for critical mineral producers, and $1.5 billion for solar panel and battery manufacturing. Each of these has proven themselves. The renewable agency funded some of our first large-scale solar farms. Critical minerals such as lithium, cobalt and rare-earth elements are in demand to make electric vehicle batteries. And Australia is the world leader in rooftop solar, but makes almost none of the panels.
But what about green hydrogen, an industry still in its infancy? Future Made now has about $8 billion on offer to help kickstart Australia’s green hydrogen industry. Subsidies would cover the initial difference between the cost of production and current market price, until economies of scale kick in and the subsidy is phased out.
Renewable hydrogen is essential to make green iron, green steel and green ammonia, which we can use here or export.
