Morrison announces A$500M for H2, CCUS

THE federal government has committed a further A$539 million into CCUS and hydrogen development in next month’s Budget, as it looks to put its greener foot forward ahead of US-led climate talks later this week.
Morrison announces A$500M for H2, CCUS Morrison announces A$500M for H2, CCUS Morrison announces A$500M for H2, CCUS Morrison announces A$500M for H2, CCUS Morrison announces A$500M for H2, CCUS

Technology-first approach to hopes to shield against world critics

Mark Tilly

Journalist

Mark Tilly

The government has announced it will commit A$275.5 million to accelerate the development of four additional clean hydrogen hubs in regional Australia as well as implementing a clean hydrogen certification scheme. 

The hydrogen funding includes $20 million for up to 10 feasibility studies to look at the best locations for hydrogen hubs. Meanwhile another $260 million will go towards CCUS projects. 

Speaking at Star Scientific's plant in New South Wales this afternoon, Prime Minister Scott Morrison said the hydrogen hubs would engage in a cluster model to work with other businesses to lower their emissions. 

"Just like you have Silicon Valley, you could have a hydrogen valley" he said. 

Energy minister and emissions reduction minister Angus Taylor said Australia could lead the world in hydrogen development and exports, just like it has in coal and LNG. 

"It has enormous potential to bring down emissions, not just in electricity, but also in the production for heat, feedstock and fertiliser; low-cost clean hydrogen is where we have the potential to be a world leader." 

Star Scientific's Hydrogen Energy Release Optimiser (HERO) technology converts hydrogen and oxygen into heat and water, without degrading the catalyst. The company took out the Industrial Category award at this year's World Hydrogen Awards. 

"Hydrogen is now and the future, it will dramatically drop in price and become the base fuel for the planet," Star Scientific chair Andrew Hovarth said. 

Santos CEO Kevin Gallagher welcomed the funding commitment, saying it complemented its A$210 million Moomba CCS project, which aims to capture CO2 and store it depleted oil and gas reservoirs in the Cooper Basin. 

It will have a start-up capacity of 1.7MMtpa, with Santos saying that could be expanded to 20MMtpa of CO2. 

"The initial Moomba CCS project would support around 230 new South Australian jobs through construction and sustain thousands more over the project's operational life," Gallagher said. 

"Developing projects such as Santos' Moomba CCS proposal will allow us to decarbonise natural gas production and provide the fastest route to a hydrogen-fuelled economy."

The funding was also welcomed by the Australian Hydrogen Council, noting the implementation of a clean hydrogen certification scheme would be a critical step that would give trading partners confidence emissions could be mitigated. 

"I commend the Prime Minister for his recognition that hydrogen has a key role to play in a world that is focused on lowering emissions and shifting to cleaner energy solutions," Hydrogen Council CEO Dr Fiona Simon said. 

The Clean Energy Council said the funding was a step in the right direction but said it should only  support renewable-based hydrogen production.  

"International markets want renewable hydrogen to replace natural gas, and it makes more sense for the government to move away from natural gas by accelerating the competitiveness of renewable hydrogen, rather than prolonging the life of fossil fuel-based energy," CEC CEO Kane Thornton said. 

He was also critical about the funding commitment to CCUS, noting the technology when used primarily to capture and store emissions was expensive, and technically difficult. 

"Australian taxpayers have very little to show for over $1 billion spent so far in support of CCS, and it would be a far better outcome to channel this funding into driving down the cost of renewable hydrogen," he said. 

Oil and gas companies maintain their CCS projects will have the edge given their experience in transporting gas, and their reservoir knowledge. 

The prime minister wants to use the cash splash as an example of Australia's commitment to lowering greenhouse gas emissions, as he is likely to face further pressure from world leaders to set more stringent emissions reduction targets at this week's US-led climate talks. 

"Where I'm seeking to take that conversation is to talk about the how -there's been enough conversation about the when," he told media this afternoon. 

"The challenge is to scale the technology up, if you want to deal with global emissions you need technology that's commercial." 

The government has been adamant it will not alter its 26-28% by 2030 target, despite the US likely to commit to a 50% target later this week, while the UK overnight updated its 2035 target to slash emissions by 78%.