Keynote Address to APAC Offshore Wind and Green Hydrogen Summit 2023
“Green Hydrogen in 20 years: A vision for the future”
The Honourable Malcolm Turnbull AC
29 August 2023
Without doubt Australia absolutely has the potential, the wherewithal, to be a green hydrogen superpower built on the back of its world class solar, wind and hydro resources.
This is an economic opportunity and emissions reduction imperative. Australia needs green hydrogen to meet its commitment to achieve net zero emissions by 2050, and to reduce greenhouse gas emissions by 43% below 2005 levels by 2030.
With green hydrogen we can decarbonise the chemicals and fertilizer sector as well as heavy industries like steelmaking and heavy transport which can’t be easily electrified. Green hydrogen also has a role to play as an important storage medium for renewable energy together with batteries and pumped hydro for grid firming.
Green hydrogen and green ammonia will have many uses domestically, not least in replacing the 425,000 tonnes of grey hydrogen currently used in ammonia production for Australia’s agriculture and explosives sectors.
Then there is the export opportunity. Green hydrogen will allow us to continue as an energy exporter. Instead of shipping dirty coal and LNG overseas we can ship green hydrogen in the form of ammonia which is in high demand in Japan and South Korea or value-added products like green iron for steelmaking around the world.
And being part of the green steel revolution is certainly something we can capitalize on since so much of the journey for steel starts under our own soil here in Australia. We already see a willingness for buyers of green steel to pay a premium. H2 Green Steel in Sweden has already locked in BMW and Mercedes as buyers. It makes sense: green steel which uses hydrogen to reduce iron ore to steel instead of coking coal might be more expensive at the moment - several hundred euro more per car - but much less than the marketing benefit, and the cost will only go down.
Those ships trading green hydrogen can also eventually run on hydrogen derivatives like ammonia or methanol which will further reduce emissions and increase demand for Australia’s green hydrogen.
The opportunity is clear.
But, and we cannot repeat this often enough, we need to act with urgency.
WE have every resource we need in abundance; except one - time. And that is running out.
We are in a green hydrogen race to redesign industrial society in a record time. If we are in a battle to save our planet, we must mobilise our national resources as we would for war, not a languid tea party.
Half-measures will not do.
By the end of last year only one Australian project with a capacity of 10 MW or more had reached a Final Investment Decision (FID). This compares to almost 1400 MW of capacity in the European Union, and 300 MW of capacity in the United States. Not to mention China where they are forging ahead at an unprecedented pace.
We need to pivot fast and with conviction. We must give renewable energy and genuinely low carbon solutions a real chance against well established and entrenched fossil fuels and hydrocarbon intensive solutions. We have long supported the fossil fuel economy and built modern society around carbon emitting activities. Now is the time to do the same for the low carbon economy. And if done well it will create opportunities.
Many countries are realizing this. The United States with its Inflation Reduction Act is the most notable, providing a production tax credit of up to USD$3 per kg for the greenest hydrogen. Other economies including the European Union are putting in their own support mechanisms and demand quotas.
Even in these economies there is more to do. I hear about many projects which are making good progress, but which fail to generate the numbers necessary for them to go ahead. Our governments have further to go in charging for carbon emissions.
The Australian government’s A$2bn Hydrogen HeadStart programme is a good start, and I am glad to see that blue hydrogen made with fossil fuels is not eligible. We must not put public money into a technology that is expensive and neither captures enough CO2 nor sufficiently minimizes leakage of highly polluting methane.
We also need to see many more than two or three flagship green hydrogen projects being supported, and much more support for hydrogen hubs around the country. We need to keep the momentum up so that these flagship projects can begin production in 2026-27 and take final investment decisions this year.
Then we need a comprehensive response to the Inflation Reduction Act as soon as possible for our renewable sector generally and green hydrogen sector specifically.
Further financial support is for sure required, as the government has committed to. BloombergNEF – from whom we will hear more later when Kobad Bhavnargi, its global head of strategy provides a forecast update, recently published its new product “the Hydrogen Subsidies Tracker” ((37) Post | LinkedIn), showing that subsidies for hydrogen projects has reached USD 280 billion worldwide, apparently up 43% since the beginning of the year.
This tracker strikes me as excellent, although we should compare the 280 billion that BNEF has found in subsidies available to hydrogen, with the actual subsidies to fossil fuels. The International Energy Agency, often considered close to oil and gas interests, concluded in February that, I quote, “In 2022, subsidies worldwide for fossil fuel consumption skyrocketed to more than USD 1 trillion, according to the IEA’s latest estimate, by far the largest annual value ever seen.” https://www.iea.org/reports/fossil-fuels-consumption-subsidies-2022. I suggest that BNEF considers introducing their findings differently, as subsidies sometimes has a negative ring to them. Words and labels matter. It is about our governments making renewable energy, including the green hydrogen economy, competitive with fossil fuels. If carbon emissions were properly charged for, there would be no need to support renewables.
On the launch of this support tracker, BNEF’s head of hydrogen Martin Tengler also wrote that “The US and the EU offer the most money. Asia has seen remarkably little support despite lots of talk from countries such as Japan and South Korea.” While what he refers to as talk from Japan and South Korea is now turning into actions, for example through the recently announced Japanese Hydrogen Strategy, targeting USD 100 billion of investment (https://thediplomat.com/2023/07/a-look-at-japans-latest-hydrogen-strategy/#:~:text=The%20new%20hydrogen%20strategy%20also,of%20clean%20hydrogen%2C%20based%20) we must as a matter of absolute priority for the health of the globe and for jobs at home make sure that we in the APAC region do not fall behind in providing enabling measures.
BNEF makes a last headline conclusion I think is worth noting, which is that “Most subsidies target hydrogen production, while few specifically target hydrogen demand. For the market to grow in line with what would be needed to reach net zero emissions, we would need to see more demand-side incentives.” This comment is particularly true for the Inflation Reduction Act in the US, which is largely about providing tax credits for production. Here at home and in the region, we have an outstanding opportunity to support the demand for green fuels such as green hydrogen and its subsidies. I am here particularly thinking of how our government can catalyse the use of green hydrogen to make green steel, how our government can catalyse the use of green ammonia to make fertilizer and fuel our ships.
The government’s measures to enable the transition is not just about financial incentives. It is about being more efficient. Nowhere is this more important than planning and permitting so we can deploy the renewable and green hydrogen infrastructure to get on with this part of the energy transition. There are major disparities between different Australian states on the time it takes to grant planning permission. This is not because some states are cutting corners but because of different levels of administrative efficiency.
This is all about community consent. I’m part of a global Planning for Climate Commission with other government, industry and civil society stakeholders. The Commission has drafted some sensible ways of speeding up these processes while at the same time ensuring there is adequate consultation and community buy in.
Finally, we need solid green hydrogen standards and certification. This may sound like a dry and esoteric topic. But standards and certification are absolutely crucial for the development of green hydrogen industry and global trade.
Producers and consumers need an agreed mechanism for verifying that emissions are close to zero, and that green hydrogen has been produced in a sustainable way. These issues are also crucial for the industry’s social license. Unfortunately, standards being adopted around the world risk validating hydrogen produced with unacceptably high emissions.
The Australian Government has made some good progress on a national certification scheme. However, it doesn’t include a clear threshold defining what is “green” or “clean”, and it does not address the social and environmental impact of the industry, for example the sustainability of water resource or land management. If green hydrogen production is damaging the environment, or not delivering economic benefits for host communities, the industry will stall.
“Only genuinely clean hydrogen can help solve the climate crisis” was the title the Guardian gave my contribution when I recently wrote about this topic. It sounds too obvious to worth mentioning, if only it was true that it doesn’t need to be mentioned. I hope you accept that I quote myself: “As our industry grows from almost nothing today, we will struggle to compete with fossil fuel hydrogen unless strict emissions limits are set. We cannot afford to play footloose with this key part of the energy transition. We call for an end to any talk of undefined “clean” or undefined “low carbon” hydrogen. Standards, certification, taxation or support schemes which do not include a credible emissions limit for hydrogen production must end.”
The Green Hydrogen Organisation – which I chair – has established the Green Hydrogen Standard. It requires that green hydrogen made with renewables emits no more than 1 kg of CO2e per kg hydrogen up to the point of production. This is a 90% reduction compared to grey hydrogen made from fossil fuels and we have committed to lower this threshold further.
The Green Hydrogen Standard is doing pioneering work on water management, lifecycle emissions including transport, the utilization of biomass, and developing standards for green hydrogen derivatives like e-methanol, synthetic methane and sustainable aviation fuels. We will launch an updated Standard at the COP28 Climate Summit later this year in Dubai.
Australia needs to be at the forefront of adopting high, global standards. Not just because it’s the right thing to do, but also because we dont want to win a race to the bottom by taking the lowest common denominator approach to mutual recognition of national standards.
So, to conclude: Australia has an immense opportunity to be a green hydrogen leader. But time is running out, we need to get on with it. Now.
 https://storage.googleapis.com/files-au-climate/climate-au/p/prj277759bb48cda6df2c230/public_assets/National%20Hydrogen%20Strategy%20Review%20-%20Consultation%20Paper%20-%20July%202023.pdf page ii
 Malcolm Turnbull gave the example of permitting timeframe differences between NSW and Queensland at a Planning for Climate Commission meeting on 17 July.
 Sending by email separately.
 In the 2023-24 Budget, $38.2 million was provided for the creation of a Guarantee of Origin scheme to certify renewable energy and track and verify emissions from clean energy products, starting with hydrogen. https://www.dcceew.gov.au/energy/renewable/guarantee-of-origin-scheme