Aussie push to Hydrogen Headstart initiative

Steel Insights Bureau

Australia’s Federal Budget has announced the establishment of Hydrogen Headstart, a $2 billion measure to scale up large-scale green hydrogen in Australia.

Hydrogen Headstart will underwrite the biggest green hydrogen projects to be built in Australia through a competitive process, which will provide revenue support for ongoing operational costs in the form of production credit.

Funding will bridge the commercial gap between the cost of hydrogen production from renewables and its current market price for early projects.

Hydrogen Headstart aims to support two to three flagship large-scale projects which could deliver up to a gigawatt of electrolyser capacity by 2030.

The program aims to catalyse the hydrogen sector, unlock further investment and improve the competitiveness of green hydrogen and its derivatives in Australia.

In doing so, Hydrogen Headstart will position Australia as an early mover and global leader in the hydrogen.

How it works

The project have been allocated $4.2 million in the Federal Budget to support the development of the program in consultation with the Department of Climate Change Energy Environment and Water.

Further information including guidelines will be released following further consultation and program design, the Australian government said in a communication.

Expressions of interest are expected to open in early 2024 and successful projects will be awarded contracts with ongoing payments over a 10 year period from 2026-2027.

The program will be developed over coming months in consultation with industry and communities, it said.

Major iron ore miner Fortescue said the Hydrogen Headstart announcement demonstrates how seriously the government is taking the green hydrogen industry and its critical role in Australia’s future.

“This is a great first step. We look forward to working with the government on the broader response over the rest of this year which will catalyse the whole industry in Australia,” the company said.

Fortescue has the green hydrogen projects in the pipeline ready to go to help drive the Australian industry forward. Green energy will create significant economic growth and prosperity for Australia in the years ahead.

Hydrogen Headstart aims to support two to three flagship largescale projects which could deliver up to a gigawatt of electrolyser capacity by 2030. Funding will bridge the commercial gap between the cost of hydrogen production from renewables and its current market price for early projects.

“Green hydrogen will lower emissions, create greater energy security for Australia and create new jobs. It is an important part of the decarbonisation of the Australian economy,” the company said in a release.

Over the years ahead, the hydrogen industry in Australia will create tens of thousands of jobs according to independent modelling from Deloitte.

“The Albanese Government’s second Budget is ensuring Australia can reach its potential as a renewable energy superpower, with $2 billion for a new Hydrogen Headstart program to scale up development of Australia’s renewable hydrogen industry. This critical new investment is all about making Australia a global leader in green hydrogen, as competition for clean energy investment accelerates around the world.