Australia and Germany have agreed to invest in developing a clean hydrogen supply chain between the two countries, which might eventually result in Australia exporting renewable hydrogen fuel to Germany.

When hydrogen is combustible as a gas, similar to methane, it can be utilized as a fuel to generate energy. While hydrogen can be produced using carbon-emitting fossil fuels, this newly signed pact places a premium on hydrogen generated purely from renewable sources, or “green” hydrogen. This is often accomplished by electrolyzing water and separating it into oxygen and hydrogen using renewable energy.

The deal also establishes the German-Australian Hydrogen Innovation and Technology Incubator, or HyGATE. Australia has given up to $50 million, while Germany has committed up to €50 million (about $79 million).

Additionally, the agreement aims to foster industry-to-industry collaboration on green hydrogen projects in Australia and to explore opportunities for Australia to export hydrogen to Germany on a big scale.

Prime Minister Scott Morrison said international collaboration focused on technological innovation was key to getting new energy technologies like hydrogen to commercial parity.

“Our partnership with Germany will accelerate the development of an Australian hydrogen industry and create new jobs,” Prime Minister Morrison said.

“Our ambition is to produce the cheapest clean hydrogen in the world, which will transform transport, mining, resources and manufacturing at home and overseas.

“Developing new low emissions industries means more jobs for Australian workers, and cheaper energy means lower costs for businesses so they can reinvest in hiring more people.”

Minister for Energy and Emissions Reduction Angus Taylor said getting new energy technologies to parity with existing technologies was the only way to reduce emissions without imposing taxes or new costs on households, businesses and industry.

“Australia is playing its role in the global effort to reduce emissions by driving down the cost of low emissions technologies,” Minister Taylor said.

“Clean hydrogen is a priority under the Technology Investment Roadmap and we’re excited to be working with Germany to bring this new industry to life.

“We have a mix of all the key ingredients needed to be a major global player in a thriving global clean hydrogen industry – abundant land and energy resources coupled with an excellent track record and reputation as reliable energy partner.

“We have set the goal of producing hydrogen at less than $2 a kilogram – ‘H2 under 2’, the price at which hydrogen becomes competitive with higher emitting alternatives.

“Getting new technologies like hydrogen to cost parity will enable substantial reductions in global emissions, while strengthening existing industries and creating new ones.”

Nedim Husomanovic

Australia’s low-carbon hydrogen trade could be worth up to US$90 billion in 2050

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