The federal government is directing $370 million to a new fund aimed at developing Australia’s hydrogen industry.
Energy Minister Angus Taylor says the funding will help Australia to realise its potential as a leading hydrogen supplier to key export markets, particularly in Asia.
The money will come from existing allocations to the Clean Energy Finance Corporation and Australian Renewable Energy Agency.
Australia’s energy ministers on Friday agreed to adopt the national hydrogen strategy prepared by chief scientist Alan Finkel.
“The national hydrogen strategy maps out the steps we can take to develop a sustainable and commercial hydrogen industry,” Mr Taylor said.
“The government is backing that in through project investment to promote our outstanding potential as a hydrogen supplier to the world.
“Importantly, hydrogen can play a role in the future energy mix to bring down energy prices, keep the lights on and reduce emissions.”
ACT’s energy minister Shane Rattenbury had sought to change the strategy so it only supported clean energy sources.
But federal resources minister Matt Canavan confirmed the strategy would also support production from fossil fuels.
“We have a really challenging task to bring down the costs of supplying hydrogen to the world,” Mr Canavan told reporters in Perth.
“Getting all of those costs down means trying different things at the moment and it’s not the time to foreclose different ways of producing hydrogen which would limit our ability to reduce those costs in the supply chain.”
Mr Canavan said there was potential for thousands of new jobs to be created with export markets in Southeast Asia diversifying their energy sources.
“We can help them do just that,” he said.
“Australia is already one of the world’s largest and most reliable and trusted energy suppliers and hydrogen will be one more energy export we can supply to existing and new markets.”
A report by the Australia Institute on Friday said the projected demand for hydrogen had been overstated, at times by a factor of 11.
The think tank urged the government not to rush into export opportunities using hydrogen made from fossil fuels, and instead wait until renewable sources were competitive.