The Federal Government is set to invest a further $539.2 million in new clean hydrogen, carbon capture, use and storage (CCS/CCUS) projects in its 2021-22 Budget.
New investments in clean hydrogen and carbon capture technologies are set to create around 2,500 jobs, support Australian industry and manufacturing into the future and further drive down Australia’s emissions.
The investment consists of:
- $275.5 million to accelerate the development of four additional clean hydrogen hubs in regional Australia and implement a clean hydrogen certification scheme
- $263.7 million to support the development of CCS/CCUS projects and hubs
Prime Minister Scott Morrison said the world was changing rapidly and Australia will need to be competitive in a new energy economy to support the jobs of Australians, especially in our heavy industries and regional areas that depend on affordable and reliable energy.
“It is essential we position Australia to succeed by investing now in the technologies that will support our industries into the future, with lower emissions energy that can support Australian jobs,” Prime Minister Morrison said.
“There is a strong appetite from business for the new emissions reduction technologies that they know will be needed to run their operations and keep employing Australians and grow jobs for the future.
“World-leading projects like these are about cutting emissions and creating jobs.
“We want to make clean energy more affordable and reliable, while looking for ways our investments can get more people into work.
“We cannot pretend the world is not changing. If we do, we run the risk of stranding jobs in this country, especially in regional areas.
“Australia can and will continue to meet and beat our emissions reduction commitments, while protecting and growing jobs, by commercialising low emissions technologies like hydrogen and CCS/CCUS, that can support our industries and critical economic sectors. And when we commercialise those technologies, they also create new jobs.
“Low emissions industries mean more jobs directly for workers, but also cheaper energy means lower costs to businesses that they can reinvest in hiring more people.
“Our technology-first approach will see Australia achieve its emissions reduction goals while continuing to grow our export industries and also supporting our trading partners’ efforts to decarbonise.”
Minister for Energy and Emissions Reduction, Angus Taylor, said the Federal Government was backing practical, technological solutions to reduce emissions, not big new taxes.
“We are backing technology to meet our 2030 target and get to net zero,” Mr Taylor said.
“The government’s investment will reduce technical and commercial barriers to deploying these technologies. It will encourage new large-scale investment from the private sector, creating jobs and supporting Australia’s economic recovery, particularly in regional areas.
“It’s a tangible example of our commitment to being a low emissions technology leader and reducing emissions through technology not taxes, or imposing costs on households, businesses or the economy.
“Australia’s potential to supply our trading partners with low cost, clean energy and permanently and safely store emissions underground has our trading partners, including Japan, South Korea and Singapore excited.”
The Federal Government is actively pursuing opportunities to collaborate on low emissions technologies with Germany, Japan, Singapore, South Korea, the United Kingdom and the United States.
The Federal Government said Australia’s Technology Investment Roadmap is a plan to create jobs, cut energy costs and reduce emissions.
The Roadmap will guide $18 billion of federal investment over the next ten years and drive at least $70 billion of total new investment in low emissions technologies in Australia by 2030.
A warning against fossil fuels
The Clean Energy Council said the additional $275 million to support the development of a further four hydrogen hubs is a positive step.
However, it said that in line with Australia’s role in the global effort to reduce greenhouse gas emissions, it is critical that government funding be targeted at supporting low-cost renewable hydrogen hubs and not at locking in fossil fuel-based hydrogen for longer through the use of CCS.
More detail is required to measure the potential impact of the Federal Government’s commitments and understand how they will support renewable hydrogen investment.
The Clean Energy Council cautioned that while this commitment is a step in the right direction, the scale of the emissions reductions announcements being made globally mean that a clear commitment to net-zero emissions and a strong roadmap for transitioning to clean energy remains essential for Australia to realise the enormous economic opportunities in a carbon-constrained world.
Clean Energy Council Chief Executive, Kane Thornton, said, “Planning and delivering the strategic infrastructure to support the production, distribution and export of renewable hydrogen is critical to our aspirations to become a leading renewable hydrogen producer for our region, and this funding is urgently required.
“Renewable hydrogen represents a massive new market opportunity for Australia. Deloitte has forecast that the sector could be worth up to $26 billion annually in additional GDP and generate 16,900 new jobs by 2050.
“The hydrogen funding includes $20 million for up to ten feasibility studies to study the best locations for hydrogen hubs, and we expect an objective and competitive process for selecting hub sites.
“International markets want renewable hydrogen to replace natural gas, and it makes more sense for the government to move away from natural gas by accelerating the competitiveness of renewable hydrogen, rather than prolonging the life of fossil fuel-based energy.
“We are concerned, however, that the government has earmarked a further $260 million to CCS, a technology that has proven to be very expensive and challenging to integrate into Australia’s aging coal-fired generation fleet.
“Australian taxpayers have very little to show for over $1 billion spent so far in support of CCS, and it would be a far better outcome to channel this funding into driving down the cost of renewable hydrogen.”
The Federal Government said Australia beat its 2020 target by 459 million tonnes and is on track to meet and beat its 26-28 per cent 2030 Paris target.
