Australia to spend A$539mn on hydrogen, CCS projects

The Australian government will spend A$539.2mn ($415mn) on hydrogen and carbon capture and storage (CCS) projects, prime minister Scott Morrison said on April 21.

In the May budget, the federal government will allocate A$275.5mn towards setting up four more hydrogen production hubs and A$263.7mn towards CCS projects, Morrison said.

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Australia’s peak body for the oil and gas industry Appea said the announcement is a “massive boost” for the industry and will help to further cut the country's emissions.

Appea CEO Andrew McConville said many of the association’s members are already at the forefront of hydrogen development and carbon capture solutions and this announcement will help accelerate development.

“Our industry works both in Australia and around the world to accelerate the development of low emissions technologies,” McConville said. “Just as government investment in renewables has fast-tracked projects, this will do the same and create thousands of jobs in the process.”

McConville said natural gas plays a vital role in reducing Australia’s and Asia’s emissions. Australian LNG is helping to reduce emissions in importing countries by about 170mn metric tons/year and the commitment to the development of carbon capture and hydrogen solutions will make a further substantial contribution, he added.

“Natural gas is a pathway to a large-scale hydrogen industry,” McConville said. “Australia’s LNG export success means the Australian upstream oil and gas industry has the technology, expertise, commercial and trade relationships to make, in particular, hydrogen exports a reality.”

McConville said carbon capture is already well established as a safe, large-scale permanent greenhouse gas emissions abatement solution. “Australia has a natural competitive advantage to implement CCS at scale. We need low-cost carbon abatement to maintain Australia’s position as a leading energy exporter,” he said.

This announcement by the Australian federal government comes days after it signed an energy deal with the government of the South Australia state. As part of that deal, about A$400mn in federal funding has been allocated for investment in areas such as CCS, electric vehicles, hydrogen and other emissions reduction projects in South Australia.