27 June 2024, Canberra – Produced using renewable energy sources, green hydrogen holds promise for significantly reducing carbon emissions and advancing the transition to a low-carbon economy. The final Australia-EU Green Hydrogen Dialogue, in the frame of the EU Climate Dialogues (EUCDs) project, highlighted the complex landscape of challenges and opportunities in developing integrated green hydrogen supply chains.
Australia’s vast renewable energy resources, particularly in solar and wind power, position it as a prime candidate for large-scale green hydrogen production. The country’s extensive landmass and high solar radiation make it ideal for significant solar projects, while its onshore wind potential, estimated at 2000 GW, offers substantial opportunities, especially in the southern regions. Recognising this potential, entities like the Port of Rotterdam have identified Australia as a top contender for renewable hydrogen production.
Despite these advantages, Australia faces significant hurdles. Community acceptance and grid infrastructure limitations are major barriers to the development of large-scale renewable projects. Unlike Europe, where offshore wind developments are more advanced, Australia is only beginning to explore these possibilities. Additionally, most renewable energy resources are located far from the coast, necessitating the development of extensive transmission infrastructure to transport electricity to export ports.
The dialogue emphasised the need for dedicated renewable energy assets and robust infrastructure to harness Australia’s renewable potential fully. Significant investments in transmission lines and port facilities are essential. However, these developments come with challenges, including land accessibility issues and high costs due to the vast distances involved.
Innovative solutions, such as floating ammonia terminals, are being considered to overcome logistical hurdles. However, there is a risk that current infrastructure investments may become obsolete with the advent of new technologies, such as advanced hydrogen storage methods. Therefore, it is crucial for value chains to remain technology-agnostic, incorporating new innovations to optimise the green hydrogen value chain continually.
The EU’s leadership in green hydrogen regulation presents significant opportunities for Australia. The EU encourages trading nations to adopt similar regulations, ensuring that imported products meet stringent “green” standards. This regulatory alignment creates a favourable environment for developing efficient supply chains between the EU and Australia.
Furthermore, the EU’s preference for doing business with countries sharing similar democratic values provides an added incentive for Australia. Establishing new trade relationships based on shared values can facilitate the development of robust renewable energy supply chains, benefiting both regions.
A critical aspect of developing green hydrogen supply chains is incentivising demand from off-takers. The green steel industry, for example, offers a promising avenue. The development of green iron (hot briquetted iron, HBI) allows countries with abundant iron ore reserves and renewable energy potential to export renewable energy in value-added forms. However, the market’s nascent state means only a few suppliers can currently provide HBI, posing a commercial risk for steelmakers who prefer diverse supply sources.
The future of green hydrogen depends on overcoming significant challenges and seizing the opportunities presented by international collaboration and technological innovation. Australia’s vast renewable energy resources position it well for a leading role in the green hydrogen economy. However, addressing infrastructure and community acceptance issues, investing in adaptable technology, and building strong international partnerships are crucial steps toward realising this potential.
The dialogue built off earlier sessions on Scaling and Accelerating Green Hydrogen Production, Financing the Green Hydrogen Economy, Social Licence, Community Acceptance and Environmental Impacts and Opportunities beyond Hydrogen: P2X.
