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29 November 2019

Hydrogen fuel in Queensland – what’s next?

There is increasing interest in the development of Australia’s hydrogen industry, bolstered by some early wins and growing investment into research and development.

There is increasing interest in the development of Australia’s hydrogen industry, bolstered by some early wins and growing investment into research and development. Queensland is well placed to embrace hydrogen technology and the economic, environmental and social benefits it is likely to bring.

What is hydrogen?

Hydrogen is the most abundant chemical substance in the universe. It is colourless and odourless and its potential for use as a clean energy source has seen its popularity increase rapidly in the alternative energy industry.

Hydrogen fuel is ideal for widespread use in houses, vehicles and other applications and it has the potential to be commodified as an export product. When burned with oxygen to create energy, its only by-product is water.

How is hydrogen produced?

Hydrogen is typically found as a component of molecules like water. To be used as a fuel source, it needs to be extracted from these molecules. This can be achieved through various methods including thermal natural gas reforming and electrolysis.

Thermal natural gas reforming involves the reaction of steam with natural gas to produce hydrogen. A key challenge with this reaction is that a by-product is the greenhouse gas, carbon dioxide. However, technologies that allow for the storage of that carbon dioxide are emerging, which would make this an extremely low-emissions hydrogen-production process. Queensland has existing access to natural gas, putting the state in an ideal position to produce hydrogen fuel.

The electrolysis process involves the splitting of water molecules to make hydrogen and oxygen. This is carried out by a device called an electrolyser, which may be driven by solar or wind power. The hydrogen can then be used as fuel by, for example, delivering it to consumers through existing natural gas pipelines. Alternatively, it can be converted into a transportable form, shipped domestically or overseas and then reconverted to its fuel form.

A potential limitation of this process is that it requires significant water input. However, solutions are emerging. For example, co-locating hydrogen fuel facilities and waste water treatment facilities allows waste water to be used for hydrogen production, while the oxygen by-product can be used to enhance processing efficiency in the treatment facility. Queensland has an enviable capacity to produce renewable energy through solar power that could be harnessed to facilitate hydrogen fuel production.

Hydrogen fuel in Queensland

Hydrogen fuel is rapidly gaining traction in Australia’s renewable energy industry and Queensland is in a strong position to embrace the technology.

Illustrating its commitment to hydrogen fuel, the Queensland Government has announced that hydrogen-powered cars are set to be included in its vehicle fleet over the next five years, and the Queensland Hydrogen Industry Strategy 2019-2024, released in May 2019, includes plans to engage with the private sector to drive innovation and investment into hydrogen. The Government proposes to provide assistance in identifying sites, linking commercial partners with technology providers and identifying eligible funding programs and grants. This is underpinned by a target of zero net carbon emissions by 2050, with a 30% reduction by 2030.

In March 2019, the Queensland University of Technology exported a small amount of Australian hydrogen produced from renewable energy to Japan, showing that export is a viable option.

National support for hydrogen industry development

At the national level, the Australian Renewable Energy Agency (ARENA) committed $22.1 million in funding to numerous hydrogen research projects in 2018. In 2019, Toyota Australia and ARENA announced a $7.4 million co-funding agreement to transform Toyota’s old manufacturing site into a hydrogen centre, with an electrolyser, hydrogen refuelling station and education centre.

On 22 November 2019, the COAG Energy Council agreed on a new strategy to grow Australia’s hydrogen industry. The strategy outlines Australia’s clean hydrogen energy potential, future growth possibilities and actions the Federal Government will take to support the development of the industry.

The future for hydrogen in Queensland

Despite competition from Europe and Asia, the strong support from government and the growing global need for alternative fuels mean it is likely that Queensland’s hydrogen fuel industry is on the brink of rapid growth. This will offer excellent opportunities for production of both a local energy source and an exportable commodity.

Cooper Grace Ward has taken a lead role in advising the developers of a number of recent hydrogen-based and other alternative energy projects, which has given us significant insight into the sector. Please contact Andrew Corkhill if you would like to discuss the topics raised in this article.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

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