Unlocking Australia's Hydrogen Opportunity
- Sep 27, 2021 7:29 am GMT
Recommendation 1: Plan in the national interest We recommend that the Australian Government establishes a body to develop an evidence-based approach to planning and coordinating the transition to net zero – including the development of hydrogen infrastructure – and reporting progress. An initial annual budget of approximately A$10 million would be required.
Recommendation 2: Establish a Net Zero Fund We recommend that the Australian Government establishes a Net Zero Fund, with an initial allocation of A$10 billion and a top up of A$1 billion each year to 2030. Drawdowns should be decided in response to planning and market soundings.
Recommendation 3: Prioritise hard to abate and scalable demand sources We recommend that the Australian Government prioritises project funding to grow demand for hydrogen in the applications that are more likely to require clean hydrogen to decarbonise, and more likely to achieve large scale. Ideally these should demonstrate an ability to open the market to other applications, through knowledge/ technology sharing, geographic proximity, and/or cost reduction.
Recommendations 6 and 8 provide further information on these priorities.
Recommendation 4: Build sector coupling into planning We recommend that the Australian Government explicitly tasks the planning body under Recommendation 1 to address how the gas and electricity infrastructure can be co-optimised for delivering lowest cost hydrogen to end consumers.
Recommendation 5: Blend hydrogen into natural gas to create demand We recommend that the Australian Government sets a target of 10 per cent hydrogen by volume in the natural gas networks, by 2030. Recommendation 6: Trial heavy transport We recommend that the Australian Government funds: • At least two heavy vehicle trials of large fleets, at a minimum amount of A$200 million each, focussed on heavily-trafficked truck routes (e.g. Sydney-Melbourne). • At least three larger trials for lighter trucks for logistics near hydrogen centres, at A$25 million each. • At least two larger trials for bus routes near hydrogen centres, at A$45 million each for 40 buses (or a combination of smaller and larger, at A$12 million per small trial for 10 buses). Funding would be drawn from the Net Zero Fund and should be aligned with funding from state/territory governments. Some of this work might be funded by the Future Fuels Fund, which we note has just under A$50 million available after the first BEV round. Page 8
Recommendation 7: Incentivise markets in FCEVs We recommend that the Australian Government: • Sets carbon emissions standards for all vehicle types. • Provides tax offsets for vehicle purchases and removes taxes that inhibit purchasing. • Sets a 50 per cent ZEV target for fleets of cars, buses and ancillary vehicles for 2030. This would include privately operated public transport fleets and government owned logistics providers. • Supports ZEV fleet procurement across state/territory and the federal government, with information sharing and guidance on relevant matters, such as available operators, manufacturers and optimal contractual measures for the evolving markets. Recommendation 8: Support hydrogen for hard-to-abate industries We recommend that the Australian Government funds a hydrogen readiness programme of at least A$1 billion for industrial processes that cannot readily be electrified, including (and not exclusively) for the production of iron/steel, ammonia, methanol, and alumina/aluminium. Funding would be drawn from the Net Zero Fund and should be aligned with funding from state/territory governments. Funding should be prioritised for projects that protect or create local jobs and have a detailed plan for skilling and re-skilling. Applicants should be required to share information to support industry knowledge development – this could be assisted by engaging with industry associations to support delivery
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