Green hydrogen = jobs, exports
… and a future for our children
TASMANIA could be at the vanguard of a raft of 21st century industries, with jobs galore, while tackling global warming and loosening the grip of political paralysis that’s choked this nation’s climate policy for two decades.
Bell Bay and Burnie — with deepwater ports that are able to be expanded, rail and road infrastructure, freshwater supplies, and high connectivity to the power grid — are ideally positioned to become hubs for exporting hydrogen produced by the state’s clean, green renewable hydro-electricity.
These hubs could produce sustainable hydrogen at a low cost to replace diesel and natural gas in powering trucks, trains, buses, businesses and households worldwide — while reining in carbon pollution.
More importantly, but less often discussed, these export hubs could attract downstream processing that comes with the use of green hydrogen, rather than coal, to produce products such as steel, ammonia, aluminium and cement.
The Gutwein government has commendably recognised the opportunity for the state and vowed to make Tasmania an exporter of hydrogen by 2030. Good news. It has taken its first small steps in this direction with the Hydrogen Renewable Funding Program; a $50m support package to provide $20m for projects, up to $20m in concessional loans and up to $10m in support services. More than 20 proposals have been submitted for funding, and an assessment panel is now considering applications.
“The global market potential for hydrogen export is massive,” a Hydro Tasmania white paper states.
Energy consultants ACIL Allen have predicted export potential for Australia at about 1.3 million tonnes by 2040.
“To put this in context, a 1000MW production facility in Tasmania would represent just 10 per cent of this volume — and yet it would more than double Tasmania’s current major industrial electricity demand,” the Hydro states.
The Hydro says of Bell Bay there are “few locations in the world that have the unique attributes of Tasmania for the production of green hydrogen at scale” and that Tassie has a “sustainable-production cost advantage” over other regions.
The analysis says green hydrogen can be produced in Tasmania for up to 15 per cent cheaper than other Australian power grids that need to offset emissions, and up to 30 per cent less than from “dedicated off-grid renewables”.
“Tasmania’s clean, green, brand would also provide value to this proposition,” the paper states.
Tasmania is not alone in chasing federal funds for a hydrogen export hub. Darwin in the Northern Territory, the Latrobe Valley in Victoria, the Hunter Valley in New South Wales, the Spencer Gulf in South Australia, Gladstone in Queensland, and Western Australia’s northwest are also in the hunt.
On the international front, Germany, Japan and South Korea are leading the creation of a new hydrogen industry. Australia has signed a variety of agreements with all three nations in the hope of buying into an industry estimated to be worth between $11bn and $26bn a year by 2050.
New Zealand’s government just announced a $20m investment in a green hydrogen facility in South Taranaki. A joint venture between Ballance Agri-Nutrients Limited and Hiringa Energy Limited will produce green hydrogen to power Ballance Agri-Nutrients’ Kapuni plant, which makes things such as ammonia. It is one of four new hydrogen projects in Taranaki with $40m government funding.
New Zealand is adopting downstream processing as an integral part of its hydrogen model, which has the advantage of creating local jobs and reducing the impact of one of the stumbling blocks of the hydrogen industry, the relatively large cost of export.
Are there opportunities for downstream processing using Tasmanian green hydrogen in production of steel, cement, ammonia or aluminium at Bell Bay or Burnie? Are there premium niche markets to be explored where manufacturers are willing to pay more for the materials of their product so as to market themselves as clean and green?
If so, let’s get cracking because Swedish steel maker SSAB is targeting 2026 for commercial-scale green steel production. The race is on.
Public policy think tank the Grattan Institute recently released a paper proposing green steel as an answer to Australia’s political paralysis on climate change, suggesting the new industry could create enough jobs in Queensland and NSW to offset losses in the inevitable demise of coal, and in the process unpick the voting bloc that was so formative at the last federal election and has helped stall the nation’s climate policy.
“Green steel uses hydrogen, produced from renewable energy, to replace metallurgical coal to reduce iron ore to iron metal,” the institute’s paper states.
“Australia’s extensive wind and solar energy resources mean we can make hydrogen, and therefore green steel, more cheaply than countries such as Japan, Korea and Indonesia. To do this at a global scale will require big industrial workforces, such as those found in coalmining regions of central Queensland and the Hunter Valley in NSW.
“Many more jobs are likely to come from Australia using its energy cost advantage to produce low-emissions, energy-intensive commodities for export.”
The institute identifies smaller opportunities in using hydrogen in the production of green steel in Port Kembla in NSW, Portland in Victoria, Whyalla in SA and Collie in WA, but does not explicitly mention Tasmania.
Iron ore is Tasmania’s fourth largest export and demand for it from China, India and developing nations in Southeast Asia is expected to surge for decades to come. Since this ore is already destined to be transported through what could eventually be Tasmanian green hydrogen hubs in Burnie and Bell Bay, is there the potential to grow a smaller, jobs-rich green steel industry here while helping to address climate change?
It is shameful that Australia produces 38 per cent of the world’s iron ore and 18 per cent of its metallurgical coal but only 0.3 per cent of the world’s steel. We Aussies not only create more greenhouse pollution per capita than anyone else on the planet but we profit more than most from the export of the planet-scale problem. Perhaps we also have the solution in our back yard.