The Australian government is conducting a review of the National Hydrogen Strategy. The first National Hydrogen Strategy was written in 2019, and the Department of Climate Change, Energy, the Environment and Water is consulting on what the new Strategy should include.

Scenario analysis from Climateworks and CSIRO for the Australian Industry Energy Transitions Initiative (Australian Industry ETI) found that hydrogen could be used to reduce emissions in heavy industry (Australian Industry ETI 2023). In the short-term, hydrogen could be used effectively to decarbonise ammonia production, and potentially also mining haulage and alumina calcination. Long-term, steelmaking and freight could require significant volumes of hydrogen.

A rapid build-out of renewable energy could enable the creation of new export industries, in which renewable hydrogen plays a key role. Australia could also derive long-term value from electrolysers as a provider of essential system services.

To realise these benefits, Australia needs an evolving national strategy to keep pace in an environment where international jurisdictions are also developing and adapting similar strategies. National hydrogen strategies are proliferating across the globe, evidence of the growing commitment to hydrogen as an enabler of decarbonisation. 

This National Hydrogen Strategy review is both timely and critical. It will ensure Australia continues to optimise our natural advantages. It will also ensure international competitiveness in renewable hydrogen and derivative products.

This submission makes five recommendations for consideration by the Hydrogen Review Taskforce. It leverages our work across key sectors of the economy, including: industry, energy and cities (buildings and transport). Each of these recommendations is supported by evidence developed as part of our ongoing work in these sectors. 

Climateworks recommends that the revised Strategy include the following:

• An explicit objective supporting transformative change in line with the Paris Agreement goals of limiting global warming to well-below 2°C and striving for 1.5°C.
• The prioritisation of hydrogen development for sectors and industries where abatement through other means is considered technically impossible or cost-prohibitive. 
• Actions to integrate hydrogen production into Australia’s wider energy system planning and industrial transformation.
• A focus on hydrogen production in Australia’s high-emitting and high-economic-output industrial regions.
• A preference for actions developing renewable hydrogen and avoiding locking in fossil fuel-based hydrogen production.

Another key federal government policy designed to accelerate the development of a renewable hydrogen industry in Australia is the Hydrogen Headstart Program.