National Hydrogen Strategy Issues Papers

It would be helpful for State governments to underwrite initial volumes from pilot hydrogen projects – for example a State government could commit to a roll-out of a hydrogen bus fleet.

We strongly believe that an export industry needs to be founded on a well-functioning domestic market. In order to stimulate production of hydrogen and encourage the Australian agricultural industry to decarbonise, the State and/or Federal Governments could mandate a move to green ammonia and other fertilisers. This could be done in a similar way to the introduction of E10 fuel. From the producer’s perspective it would also give them greater security of supply, as all of the major gas users in Australia have faced unprecedented pressure on supply and pricing over recent years because of the growth of the export markets for LNG have outpaced the growth in supplies.

The Federal Government could request ARENA to work with APPEA (the peak industry body) to take the lead in developing model hydrogen sale and purchase agreements. To date there has been limited development of such model forms globally and this would give Australia the opportunity to demonstrate its leadership. Austrade and industry could then look to disseminate these model forms through a global series of workshops.

Any guarantee of origin should have an eligibility threshold with a maximum emissions intensity that fosters best practice and also clearly identifies the provenance of the hydrogen production as sourced from fossil-fuels or renewables.

The Clean Energy Regulator has a global reputation for integrity and probity and has successfully developed and implemented complex regulatory mechanisms for Australia over many years now. This would be the logical authority to regulate a hydrogen grading/verification system.

Industrial users of hydrogen will require various forms of hydrogen fuel type and purity level, depending on application.

High volume users will likely benefit from pipeline supply sourced from off-site centralised generation (and storage). Lower volume users with more ad-hoc requirements may be better served by on-site generation and storage.

Major users of gas currently will likely require conversion of existing equipment or the purchase of new equipment to utilise high purity levels of hydrogen or gas blends. Analysis of these requirements would be a crucial element of any pilot and R&D projects to identify cost effective solutions would provide globally relevant research topics.

Early establishment of vocational and postgraduate training will be required to ensure those involved in the supply chain pilot projects have appropriate skills training to ensure safe storage, transport, delivery and use of hydrogen. Learning within a live regional hub pilot scheme will provided unparalleled vocational educational opportunities.

The community will also need to be informed about the use of hydrogen to ensure acceptance as part of any pilot program.

The Hunter Region as a pilot Hydrogen Hub

We believe The Hunter is strongly positioned to be a global success story in hydrogen production and exports and is an excellent candidate for a region-wide pilot project for the following reasons:
 Critical mass of population and local business to create a viable supply chain pilot at scale with many opportunities to target and monitor sector-coupling benefits
 Potential large industrial users requiring different types and purity levels of hydrogen fuel including, importantly for scale, high load usage cases such as the Orica chemicals plant and Tomago aluminium smelter
 World-class large-scale port with existing and economically viable shipping routes to the key hydrogen export markets of Japan and Korea
 Proximity of available land and solar/wind resource for renewable energy generation sites close to port
 Numerous sites of resources projects that can be repurposed for hydrogen close to existing rail and transportation lines
 Strong grid interconnection opportunities for the addition of new renewables generation plants
 The need for new renewable generation to replace the retiring Liddell coal fired power station
 Opportunities to implement Carbon Capture & Storage (CCS) technologies
 Access to the gas transmission pipeline (JGN Trunk Pipeline)
 Fully integrated public transport network enabling local and national opportunities for hydrogen fuelled fleet trials in combination with EV fleet trials
 Mining companies with an active interest in conducting trials of hydrogen fuelled mine site vehicles
 Strong and cohesive sense of community with a well-developed long-term plan for development – a hydrogen strategy could be integrated into the Hunter 2036 development plan
 History of successful development of heavy industry and high levels of community acceptance of the benefits of heavy industry and understanding of the need to build new infrastructure to enhance and protect the regional economy
 The need to identify a long-term solution to transition a large part of The Hunter region’s workforce from jobs in the fossil fuel industry into a de-carbonised economy
 Efficient access as a pilot location for investors and logistics due to proximity to Sydney (international) and Newcastle
 An educated and skilled workforce
 Existing R&D focus with sector-leading expertise on hydrogen at University of Newcastle and CSIRO, including a joint research program between the University of Newcastle and University of Tokyo on Photocatalytic Hydrogen Generation. Other areas of hydrogen-specific research being studied at the University of Newcastle are:
o Photocatalytic Hydrogen Generation
o Hydrogen production from Salt Water
o Hydrogen storage
o Hydrogen Generation and Storage from Large Organic Hydrides
o Atmospheric Water Generation
o Hydrogen Production from Steam Reforming of Methane
o Carbon Capture, Utilization and Storage Technology
o CO2 to Fuels

Favourable characteristics place The Hunter region in a unique position to achieve necessary scale by executing near term opportunities to reduce costs and risks for government and the private sector through proof of concept. Specifically, The Hunter already possesses the key recommendations identified by the International Energy Agency (IEA) in its Future of Hydrogen report (June 2019) as critical in early stages of the scaling up a nation’s hydrogen industry:

1. Make industrial ports the nerve centres for scaling up the use of clean hydrogen
2. Build on existing infrastructure, such as natural gas pipelines.
3. Expand hydrogen in transport through fleets, freight and corridors.
4. Launch the hydrogen trade’s first international shipping routes.