Hunter region earmarked for hydrogen as Australia looks to reduce emissions

The Australian government will spend $1.5 million on a study into the potential for a future hydrogen hub at the Port of Newcastle in the Hunter region of New South Wales, currently the world’s largest coal port.

The federal government, through the Australian Renewable Energy Agency, will fund half of a $3 million dollar study into the hub’s potential. Macquarie Group’s Green Investment Group, the Port of Newcastle and other partners will also contribute to the study.

Prime Minister Scott Morrison announcing a feasibility study on turning the Hunter region into a hydrogen production hub.Credit:Dominic Lorrimer

Prime Minister Scott Morrison said hydrogen was a “future fuel” that would be used domestically and internationally.

“The Hunter has gone through its fair share of changes over my lifetime,” Mr Morrison said at the Port of Newcastle on Monday. “And what’s really exciting is how the Hunter keeps adapting, keeps evolving, keeps seeing the opportunities that are ahead, but also maintaining that rich legacy of its history.”

Mr Morrison said the Hunter region was key to Australia’s future as a low-emissions country that aimed to reach net zero by 2050.

Port of Newcastle chief executive officer Craig Carmody said the port was the world’s largest coal exporter but diversification was essential to prepare for a low carbon economy.

“We know that diversification is not a nice have, it’s a must-do.” he said.

“We are already a leading global port in energy, we have the supply chains, we have the customers and we have the markets. It makes sense for us to make this play.”

Monday’s announcement comes as Australia emerges as a front-runner among nations vying to become hydrogen-exporting powerhouses amid fresh projections showing demand for the fuel could increase six-fold by 2050.

The federal government has announced a policy to reach net zero emissions by 2050, a target that means it must heavily cut its greenhouse gases over the next three decades. Under its new plan, released shortly before Prime Minister Scott Morrison went to the Glasgow climate conference, 40 per cent of emissions reduction will come from lower-emissions technologies (such as hydrogen) becoming cheap enough to compete with carbon-intensive industries.

For decades, the region’s coal has been the basis of a huge export industry, but as Australia’s biggest coal export markets â€" Japan, South Korea and China â€" commit to net-zero carbon emissions and shift towards clean energy, the mines of the Hunter appear to be heading for a slow decline.

Mr Morrison said Australia would achieve its net-zero targets by reducing the costs of alternative technologies and said he would release the net zero modelling for the government’s plan “soon”.

“You don’t have to sell out your economy and the jobs in your economy to get your emissions down,” he said.

Prime Minister Scott Morrison said hydrogen was a “future fuel” that would be used domestically and internationally.Credit:Dominic Lorrimer

Energy and Emissions Reduction Minister Angus Taylor said the government was determined to reach the goal of producing clean hydrogen at a competitive price.

“This feasibility study will investigate the deployment of a 40 megawatt electrolyser, which would be four times bigger than the current largest electrolysers in the world,” he said.

An electrolyser is a device which splits water into hydrogen and oxygen using electrical energy to create hydrogen. The government press release referred to “clean” hydrogen, but did not specify if it would be green hydrogen, which is produced with renewable energy.

Mr Taylor predicted the hydrogen industry would support more than 16,000 jobs by 2050, plus an additional 13,000 jobs from the construction of related renewable energy infrastructure.

“Australian hydrogen production for export and domestic use could also generate more than $50 billion in additional GDP by 2050. It’s a win-win,” he said.

Lock the Gate Alliance spokesperson Georgina Wood welcomed the announcement and said it was an example of how investment in decarbonisation could transform the area’s industry, jobs and future.

“We need green hydrogen for the sake of farmers who are fighting polluting coal seam gas developments, for industry that is being gouged by fossil fuel gas companies, and for the future of the planet as we desperately fight to mitigate the climate crisis,” Ms Wood said.

“It is critical to Australia and NSW’s pathway to zero carbon pollution and to the economic future of the Hunter region that we phase out gas by replacing it with renewable hydrogen and green ammonia.

“This announcement clearly shows Newcastle can retain and transform its industrial heritage in preparation for a zero carbon world.”

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