Over the past few years, there has been growing global recognition that building domestic manufacturing capability is not just a good news story for local economies, but a means of supporting national resilience.
COVID sensitised governments to the fragility of global supply chains, prompting political commitments to build capability at home. Russia’s invasion of Ukraine then reinforced a deeper truth: energy security is national security, and vice versa.
Together, these seismic events reoriented policy discussions. Governments across the world created major policy platforms to do more domestically, while also seeking to strengthen collaboration with trusted trade partners to secure supply chains and regional energy systems.
The Future Made in Australia legislative package articulates this shift clearly, setting out a framework for government investment in nationally strategic industries, including hydrogen and the use of hydrogen to produce green metals and low carbon fuels.
The political and economic environment does not wait
We have made a good start. But it is now five years since COVID first spread globally, and three years since the Russian invasion. Much of the system remains in policy design and early grant deployment, while capital markets are retreating from climate-aligned investment towards business-as-usual returns. And Australia’s fuel security does not appear able to withstand prolonged import constraints.
Compounding the challenges, other structural shifts are also underway. China is outcompeting much of the world in the manufacture of high-value tradeable goods, while India is emerging as a major contender.
All manufacturing nations are grappling with how to rebuild domestic capability without entrenching uncompetitive cost structures. Australia faces this challenge with the added disadvantage of already being in a long-term spiral of offshoring, driven by the high cost of doing business.
The geopolitical context has also shifted. The world’s traditional ‘big brother’ – on whom Australia still relies for liquid fuel security – is increasingly a source of risk rather than stability.
In a recent speech at Davos, Canadian Prime Minister Mark Carney argued that middle powers must move beyond performative compliance with great powers and actively reduce exposure to economic coercion. His point reflects a wider recognition: deeply interconnected global systems are efficient, but they are also fragile.
The Future Made in Australia is here
We are now entering a second wave of national security thinking, encompassing not only defence but energy, fuel, and food security. The current political context gives government both the mandate and the responsibility to act, even as the challenges become more complex.
This is where the next phase of the Future Made in Australia agenda will be tested. The central question for 2026 is whether the system can execute.
Execution will require institutions that can translate intent into sequencing, and funding into capability. That means deploying capital already committed through special investment vehicles and removing the structural blockages that have constrained delivery to date. It means ensuring instruments such as the Net Zero Fund accelerate real capability rather than recycling risk.
Critical decisions will also be made this year on targeted programs such as Hydrogen Headstart. These sit at the intersection of emissions reduction, industrial policy, and fiscal discipline. They are consequential, and will shape perceptions of Australia’s industrial transition for years to come.
Internationally, Australia also has an organising role to play this year, through COP processes and continued engagement on maritime decarbonisation. While the next vote at the International Maritime Organization may be difficult, sustained middle power coordination remains one of the few levers capable of shifting outcomes over time.
The need for policy coherence
This is a hard environment in which to develop first-of-a-kind projects. Capital is tighter, timelines are longer, and tolerance for uncertainty is lower. What we are hearing consistently from businesses is a need for clarity and confidence that the path they are being asked to follow is one that government is genuinely prepared to support.
There is a continued need to work with industry and governments to strengthen the ecosystem that underpins Australia’s national interests in the energy transition. Infrastructure sequencing, credible demand signals, and clear policy intent matter as much as headline funding commitments, and these will continue to shape our priorities in 2026.
In a more constrained global environment, policy coherence will be the difference between an industrial transition that compounds over time, and effort that dissipates.
Words by Australian Hydrogen Council chief executive officer Dr Fiona Simon.
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