The International Gas Union and Bloomberg New Energy Finance's report released today notes the falling in prices in low and zero carbon technologies thanks to the lowering prices in renewable electricity generation and governmental policies looking to mitigate runaway climate change.
It said the development of decarbonised gas such as biomethane and hydrogen is a crucial next step to enable long-term climate goals to be met.
The report believes the development of these technologies would allow the gas industry to continue to evolve, given that gas pipelines could be modified to carry either hydrogen, or C02 if carbon capture and storage technology develops.
The report notes the pipeline of green hydrogen projects has expanded to 8 gigawatts, compared to 3GW just a year ago and estimated that up to 37% of energy-related greenhouse gas emissions could be abated using hydrogen.
Last month, Australian industry heavyweights including Woodside Petroleum, BP Australia and AGIG signed on to the Australian Industry Energy Transitions Initiative aiming to use industry knowledge to develop pathways that can reduce emissions in Australia's industrial sector.
The Initiative is specifically looking at hard-to-abate sectors, including steel, aluminium, LNG, and chemicals.
The report notes the huge investment potential that could be generated in a dedicated green hydrogen industry.
It estimates over US$11 trillion of spending on production, storage, and transport infrastructure would be required for hydrogen to meet around a quarter of the global energy demand needs by 2050, however it said this would only happen if the right policy and investment levers were pulled by government.
The Australian government has committed A$370 million to hydrogen development.
The report highlights Australia is among countries such as the US, Kazakhstan, Zambia and Saudi Arabia to possess the largest hydrogen export potential, with the report noting Australia, among others, could supply North and Southeast Asia, similar to today's LNG trade markets.
The Hydrogen Council, which features BP, Woodside and BHP estimate its members have planned investments of over US$11.1 billion for commercialising hydrogen, but the report notes government investment will be essential.
One of the largest barriers to investment however is a lack of carbon pricing, as well as long term energy targets that are consistent with the Paris Agreement goals that would drive investment in hydrogen.
It also highlights that new investments in coal, oil and gas infrastructure are being made without regard to its compatibility to transition to hydrogen; increasing the cost and barriers to changeover in the future.
It said new pipeline infrastructure should be built using hydrogen-tolerant materials like polyethylene, and new gas turbines models and marine engines needed to be capable of operating on ammonia.
The report calls for long-term targets to be set that are consistent with Paris, the establishment of standards governing hydrogen use, and markets for low-emissions products to be formed.