Woodside Petroleum and Fortescue Metals Group in Australia are working to commercialize hydrogen production as they seek new revenue streams amid growing global decarbonization momentum.
Hydrogen is expected to see an increase in demand in the near future. As a carbon-free source of energy, it is widely regarded as a clean alternative. However, the emission of CO2 when it is derived from natural gas or other sources still presents a challenge for its use as an energy source.
Australian energy giant Woodside and iron ore producer Fortescue plan to invest more in hydrogen development in the hope that it will become a key business like oil, gas, and iron ore in the future.
Hydrogen will be produced at three sites, two in Australia and one in the United States, by Woodside Energy. hydrogen plant in Perth, Western Australia, announced in October last year, will be able to produce 1,500 tons of hydrogen daily. According to H2Perth’s creators, it will be a world-class facility. According to the company, the plant will be operational by 2027.
Tasmania, in Australia’s southeast, is home to another venture for the firm. Marubeni and IHI of Japan were involved in the initial feasibility study, which was funded by the Japanese government. Woodside has said it is technically and commercially possible for the company to export ammonia to Japan.
The state of Oklahoma, in the United States, is currently working on a third project outside of Australia’s borders as well. Hyzon Motors, a manufacturer of fuel cell trucks in the United States, and Woodside signed a memorandum of understanding in December to construct a hydrogen facility. It is Woodside’s goal to find a buyer in the United States. Using technology developed for liquefied natural gas, Woodside expects to liquefy hydrogen, CEO Meg O’Neill said.
Woodside announced the day after it announced its plans for the U.S. plant that it would invest $5 billion in new energy products, including hydrogen, and low-carbon technology by 2030. Investors and others were assured by the company that it was stepping up its efforts to reduce greenhouse gas emissions.
Fortescue, a company that has grown rapidly since it was founded in 2003 by selling iron ore to China, is also positioning hydrogen as its next growth engine. A number of hydrogen-related projects have been announced by the company since last year, led by Andrew Forrest, the company’s founder and chairman.
Hydrogen production in Tasmania is on the minds of both Fortescue and Woodside, Inc. An investment decision is expected to be made this year.
In addition, Fortescue is taking on Australia’s energy crisis. More than half of the country’s electricity is currently produced using coal. Green hydrogen production at two coal-fired power plants (Liddell and Bayswater) was approved by Fortescue and Australia’s largest utility (AGL Energy) in December.
Fortescue is also looking into ways to use hydrogen to power its iron ore dump trucks instead of diesel fuel. By the end of June 2023, the company intends to conduct tests with the goal of promoting decarbonization at mining sites. Net-zero greenhouse gas emissions are the company’s goal for its mining operations by the year 2030.
A hydrogen industry is being pushed by the federal and state governments in Australia. When New South Wales’s government announced a state hydrogen strategy earlier this year, the federal government was already in the process of developing one. In 2019, the governments of Queensland and Western Australia also announced hydrogen-related plans.
Coal and LNG account for more than 20% of Australia’s total export value, so the country’s public and private sectors are collaborating to promote the hydrogen industry’s infancy in the land Down Under. Exports of coal and LNG totaled $39.7 billion and 54.6 billion Australian dollars, respectively, for the 12 months ending in June 2020, according to figures from the Department of Foreign Affairs and Trade.
Aside from iron ore, coal and liquefied natural gas are the second and third most important products exported from the country, respectively. 11.5 and 10 percent of the national total, respectively, are made up of these two groups
Major fossil fuel importers Japan, South Korea, and China have all committed to achieving net-zero greenhouse gas emissions by the years 2050 and 2060, respectively, as part of international climate agreements. For export, hydrogen will play a pivotal role as demand for fossil fuels declines. With infrastructure subsidies, Japan, in particular, is encouraging the use of hydrogen.
Hydrogen production is also planned for the Middle East and South America. In the future, hydrogen production systems may be built in Australia and elsewhere, as Woodside and Fortescue move forward with projects in the United States and South America, respectively.
