Generic Hero BannerGeneric Hero Banner
Latest market news

Australia to review national hydrogen strategy: Update

  • Market: Hydrogen
  • 27/02/23

Adds info on response from the Australian Hydrogen Council in paragraphs 4 and 5.

Australia will review its national hydrogen strategy, partly in response to the US' Inflation Reduction Act (IRA) and efforts by other countries to build up a hydrogen economy.

The government's Energy and Climate Change Ministerial Council agreed late last week that the strategy should be reviewed to support Australia "on a path to be a global hydrogen leader by 2030 on both an export basis and for the decarbonisation of Australian industries". The review is to factor in developments in Australia and elsewhere since the original strategy was drawn up in 2019, the council said. This will include "the impact of the Inflation Reduction Act… and policies by other countries to support a hydrogen industry".

The IRA will introduce tax credits of up to $3/kg for hydrogen production, with the exact amount of support to depend on lifecycle greenhouse gas (GHG) emissions. It has been widely regarded as a gamechanger for the low-carbon hydrogen industry and other countries have scrambled to follow suit. The EU earlier this month announced specific provisions for hydrogen as part of its Green Deal Industrial plan, including auctions through which it will grant fixed premiums on renewable hydrogen production, and said this would have "a similar impact as the production tax credit". India earlier this year also earmarked substantial funds for production-linked incentives to stimulate hydrogen production.

Industry body the Australian Hydrogen Council said it welcomes plans for reviewing the strategy and that more far-reaching support for the sector is crucial in order to keep up with other countries' efforts. "We are already hearing that Australian projects are being de-prioritised where there are choices", the association's chief executive Fiona Simon said. "Competition for hydrogen projects is fierce" and countries are "jostling for first mover advantage", she said. Simon called on the government to develop a new strategy that "will reconsider the best range and combination of long-term economic mechanisms to develop the hydrogen industry, including grants, debt and underwriting".

The industry body said that according to a report by consultancy Deloitte, failure to respond to the IRA could lead to significant hydrogen production in Australia being delayed into the 2030s. This would leave Australian exports 65pc lower in 2050 than if the US bill had not been introduced. Deloitte suggests that the Australian government should introduce a production credit of A$2/kg for 10 years for hydrogen projects, the Australian Hydrogen Council said.

Australian industry participants have previously warned that the country risks losing its edge unless there is more political support. The country has many of the key components for cost competitive renewable hydrogen production — especially ample solar and wind resources and a vast land mass — and many projects are planned across the country, including giant sites such as the BP-led Asian Renewable Energy Hub (AREH). But few projects have progressed to final investment decisions and there are concerns around issues such as electricity generation and transmission infrastructure and water supply.

Australia's hydrogen strategy from 2019 set out removal of market barriers, the effective build-out of supply and demand and a drive for global cost competitiveness as key aims. The government sees the creation of hydrogen hubs — which combine all aspects of the value chain — as crucial for achieving these goals.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
18/02/25

Omani H2 resources ‘phenomenal’: InterContinental

Omani H2 resources ‘phenomenal’: InterContinental

Abu Dhabi, 18 February (Argus) — Singapore-headquartered InterContinental Energy is planning three large projects for producing renewable hydrogen and derivatives — Australian Renewable Energy Hub (AREH), Western Green Energy Hub (WGEH), also in Australia, and Green Energy Oman (GEO). InterContinental Energy is developing all three alongside major partners and plans to build them in several stages. The projects could together produce nearly 7mn t/yr when fully developed — although this is expected to take several decades. Argus spoke to InterContinental chief executive Alexander Tancock about the firm's approach to scaling up, the need for government support, and why Oman is a prime location for major projects. Edited highlights follow: How are your projects progressing? We have the AREH project in Australia, with BP as the operator. That is in an area called the Pilbara, which is the world's largest iron ore exporter. So it just made so much sense to make that project about green steel. A domestic green steel project means you don't have to worry about exporting losses, conversions… you use the hydrogen right there to make green steel. At our second Australian project, WGEH, with support from the government we can now achieve somewhere around $3/kg of hydrogen, which is really cost effective. That project will probably be focused on methanol and ammonia exports. Then in the Middle East, we are in Oman, where the government is really strongly behind hydrogen. It is probably one of the most — if not the most — forward-looking hydrogen governments on the planet. And the resources that we have in Oman are phenomenal. The only issue now in Oman is that the domestic play is a bit harder. The resources are there, but there are not many people. What we need to figure out is where that cheap green hydrogen goes — to find a domestic market or work with points overseas in a strategic manner. The Omani government is taking a huge role there, and we are fortunate with our project in Oman as Shell and OQ are co-investors. With OQ being the domestic energy company and Shell being the largest foreign investor — if anybody can figure this out, it would be them. When it comes to Oman — are things on track? We're on track, broadly speaking. With these large projects, time will tell if there will be slippage. But if I look at the discussions we're having with our partners and offtakers, I'd still see these projects reaching a final investment decision (FID) towards the end of this decade. What time lag do you expect between FID and construction or start-up? With our projects, the timelines are going to be a few years from FID to product, because of their scale. And then full construction will take decades. If you take our largest project, WGEH — that's 30 nodes. A node a year would be a good run rate. So WGEH will grow with the offtake market to 2050 and beyond. What exactly do you mean by ‘nodes'? The onus has to be on government to help the sector along. But the onus also has to be on us as an industry to drive our costs down, as the government is not there to just shell out money. There are a few ways of achieving that. One is to make the equipment better and cheaper, and there are good companies doing that. Then on the project side, you have to go to scale and develop architecture that allows you to make the entire project more efficient — i.e. less capital expenditure (capex) and less equipment, but the same or higher output. If you have these huge projects that are the size of small European countries, you can't build them in one go. They are just too big and no one will finance them. So you have to build them in stages. So what our team did, a couple of years ago, is to say that if we eliminate all of the high-voltage equipment, we save a lot of money and time. But that means that you have to put all your wind and solar within a certain distance of the hydrogen production. So the team optimised that, and what you end up with is this nodal unit, where you have 1-2GW of electrolysers surrounded by twice as much upstream generation capacity. And all of that wind and solar connects to this hub in the middle, where you have your electrolysers, and so all of that electricity stays at distribution voltage. With this, you save a lot of capex. Hydrogen generation takes place there and connects by pipeline to your downstream use — methanol, ammonia, green steel. Then you build a second node that has its own pipeline, and so on, like building blocks. And just like in a natural gas network, that pipeline network becomes a battery. So rather than having to pay for additional batteries, your battery comes with the pipelines you're building anyway. So for us, we think in units of nodes. That's how we develop our projects. And each node can be a standalone phase. We're working with our project partners and others, using this as the baseline. If you look at Oman's entire process, it has adopted the node as the base unit. Are you interested in participating in Oman's upcoming bid round for land? We don't need to because our first-round project is a legacy project. It is the only project that was given expansion rights, because we were a legacy player. The GEO project can go up to 25GW. Beyond Oman, I think Saudi Arabia was on your radar at some point? We had been looking over the past few years at different markets beyond our three projects, and we continue to look at other projects. But we have three incredible projects that are very, very large. So the need to deliver and focus is more where we are today, rather than expansion. Having said that, if the right project and the right partners were to come along, we would be open-minded. But we have a lot to deliver, so our focus is on that. Oman's model of auctioning off land through bidding rounds is somewhat unique. What makes the approach suitable for Oman, but not others? The Oman approach is better suited to markets where the government has more control over land. It would be difficult to implement that model in places that are full of freehold land. The Middle Eastern approach in general is one of looking for master planning and delivery, and that is something the region has done so well. You look at the infrastructure projects they've delivered across this region. Does anybody do it better? No. So that model is really well suited to environments like this. In terms of infrastructure, what do you think is most needed today? Pipelines? Import-export facilities? Storage? None of the above. The most important factor is government policy and support, because the market will not solve everything. If you can help bridge the gap between where we are now and what people are wiling to pay, the solutions are all there already. None of this really requires new technology. It just requires architecture that is optimised. So that's all solvable. Government legislation and support — that's the critical piece of the puzzle I think we're missing in most markets at this point in the industry's development cycle. InterContinental Energy H2 projects Project AREH WEGH GEO Location Pilbara, Australia Goldfields, Australia Al Wusta, Oman InterContinental Energy shares % 26 46 21 Other partners (shares %) BP (63.57), CWP Global (10.04) CWP Global (44), Mirning Green Energy (10) Shell (35), OQ (25), EnerTech (18.84) Planned H2 output mn t/yr * 2 4 2 Planned renewables capacity GW * 26 50 25 *at final development stage - InterContinental Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more
News

H2Med FID unlikely before 2028: Spain's Enagas


18/02/25
News
18/02/25

H2Med FID unlikely before 2028: Spain's Enagas

Paris, 18 February (Argus) — A final investment decision (FID) for the H2Med cross-border European hydrogen corridor is unlikely to be taken before 2028, according to Spanish gas transmission system operator (TSO) Enagas. The FID will "have to be connected to [the awarding] of European funding necessary to undertake the development of the infrastructure", a process that could take some years, Enagas' chief financial officer Luis Romero Urrestarazu said during the company's results call today. Enagas and the H2Med partners are carrying out preliminary studies, for which the European Commission approved funding of €97.3mn ($102mn), the Spanish firm said. Once studies are completed, the firms will "have to go through a whole series of procedures with the European institutions," Urrestarazu said. "We have to file the investment project with the regulators, and eventually, we'll be able to request the funds for construction," he said. Because of this process, Enagas does not see FID for H2Med being taken before 2028. The H2Med consortium will announce more details "when we have more visibility of the timeline," he said. The H2Med corridor aims to transport renewable hydrogen from production centres in the Iberia peninsular to buyers in Germany. Its promoters are targeting 2mn t/yr of transport capacity by 2030, but that appears to be an ambitious timeline with the FID still years away. Enagas plans to take FID for the Spanish hydrogen backbone, which is part of H2Med, by the end of 2027, targeting commissioning in 2030. The company received approval from the Spanish government in late 2023 to be provisional operator of the country's hydrogen grid. This allows it to start the public consultation process and the environmental impact plan, according to Urrestarazu. The Spanish network is planned to have 2,600km of pipelines, 21pc of which will be repurposed gas pipelines, and two underground storage facilities. The TSO is proposing extensions to the backbone's original plans following a recent market survey. In addition to the pipelines, Enagas is developing a network of six hydrogen refuelling stations in Spain, which is expects to start commissioning in 2027. The facilities are planned to have combined supply capacity for 6 t/d of hydrogen, which could refuel 300 trucks per day. Overall, Enagas plans to invest more than €3.1bn in hydrogen infrastructure until 2030. It is also developing infrastructure for CO2 capture, storage and liquefaction in industrial areas, as well as ammonia facilities around ports in Spain. By Pamela Machado Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Japan approves new energy mix target, climate plans


18/02/25
News
18/02/25

Japan approves new energy mix target, climate plans

Tokyo, 18 February (Argus) — Japan has approved its targeted power mix portfolio for the April 2040-March 2041 fiscal year, as well as its new greenhouse gas (GHG) emissions reduction goal, it announced today. The new power mix goal, the centrepiece of the country's Strategic Energy Plan (SEP), is in line with Japan's aim to reduce GHG emissions by 73pc by 2040-41 compared to 2013-14 levels. Tokyo plans to submit the 2040-41 emission target, as well as a 60pc emissions reduction goal for 2035-36, to the UN climate body the UNFCCC on 18 February as the country's nationally determined contribution (NDC). The country has not made major changes to its draft proposal that it unveiled in December. The new SEP sees renewable energy making up 40-50pc of the country's power generation in 2040-41, up from 22.9pc in 2023-24. The share of thermal power will fall to around 30-40pc from 68.6pc, while that of nuclear will increase to around 20pc from 8.5pc during the same period. The 2040-41 target is based on Japanese power demand of 1,100-1,200 TWh, which is higher by 12-22pc from 2023-24. The government has planned the power portfolio so that it is not heavily dependent on one specific power source or fuel type, the country's minister for trade and industry (Meti) Yoji Muto said on 18 February, although the new plan suggests making maximum use of low-carbon power supply sources. Public consultation over 27 December-26 January revealed that some think Japan should slow or even stop the decarbonisation process, given the US government's reversal of its climate policies, including its withdrawal from the Paris climate agreement, said Meti. But global commitment to decarbonisation will remain unchanged, said Muto, adding that Japan will lose its industrial competitiveness if the country delays green transformation efforts. But US president Donald Trump's "drill, baby, drill" policy has prompted the Japanese government to delete a segment from the draft SEP that had initially proposed bilateral co-operation through Tokyo's green transformation strategy and the US' Inflation Reduction Act. Despite Tokyo's decarbonisation goals, the new SEP assumes that fossil fuels, including natural gas, oil and coal, will still account for over 50pc of primary energy demand in 2040-41 in all of its scenarios — although this is down from 93pc in 2013-14 and 83pc in 2022-23. The scenarios vary based on the degree of uptake of renewables, hydrogen and its derivatives, and carbon capture and storage (CCS) technologies, to fulfil the 73pc emission reduction goal by 2040-41. Worst-case scenario Tokyo also has also set out a potential worst-case scenario, assuming slower development of clean technologies, in which fossil fuels would still account for 67pc of primary energy supply in 2040-41. Under this scenario, which assumes Japan will only reduce its GHG emissions by around 61pc by 2040-41, natural gas is estimated to account for about 26pc, or 74mn t, of Japan's primary energy supply, which is higher than the 53mn-61mn t in the base scenarios that are formulated in accordance to the 73pc emissions reduction target. Japan would need to address the potential 21mn t gap in gas demand, which will mostly be met by LNG imports, in 2040-41, depending on the development of clean technologies. The gap is equivalent to 32pc of the country's LNG imports of 65.9mn t in 2024. When asked by Argus whether the government will continue to try securing LNG to ensure energy supply security when considering the worst-case scenario, a Meti official said Tokyo should continue pursuing its 73pc GHG reduction target, but it is necessary to consider the potential risks for each individual policy and the measures that need to be taken, instead of making decisions based on the worst-case scenario. The new SEP has highlighted the role of LNG in the country's energy transition and the necessity to secure long-term supplies of the fuel. It is unclear what ratio gas-fired capacity will account for in Japan's 2040-41 power mix, as the SEP does not include a breakdown of thermal generation. But gas-fed output is expected to take up the majority share, given that gas has already outpaced coal in power generation and Tokyo has pledged to phase out inefficient coal-fired plants by 2030. By Motoko Hasegawa and Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Frustration over delays to UK CCS and H2 programmes


17/02/25
News
17/02/25

Frustration over delays to UK CCS and H2 programmes

London, 17 February (Argus) — Companies are growing increasingly frustrated with the UK government over unclear timelines and inadequate funding for carbon capture and storage (CCS) and clean hydrogen projects. The government has drawn strong praise for the design of its contracts-for-difference style production subsidies for electrolytic hydrogen and CCS systems to underpin low-carbon hydrogen from fossil fuels. But too few projects have been able to access the schemes and developers are losing confidence that the UK will match their ambition with sufficient and timely funding. "It's like building a great motorway with five lanes but very few, or no junctions," industry body OEUK's head of energy policy Enrique Cornejo said. "We have a great policy framework, but we don't have access, apart from a very small number of projects," he told the UK CCUS and Hydrogen Decarbonisation Summit in Leeds, northern England this month. Cornejo welcomed a recent final investment decision (FID) for the Teesside CCS system and progress made on northwest England's HyNet cluster, which is expected to reach FID this year, but he urged the government to set out funding and timelines for the Scottish "Acorn" and Humberside "Viking" CCS projects that are supposed to be next in line. "It's been a really long wait for these projects and the risk is very clear that if we don't hear some positive news from the government" there could be "lost investment", he said. It is a view shared by Norway's Equinor, which owns 45pc of the Teesside CCS project and a portfolio of Humberside hydrogen proposals that are in limbo having been overlooked in initial government selections. "Keeping projects on life support costs a lot of money," said the company's director of UK low-carbon solutions hydrogen, Dan Sadler. Equinor has spent "hundreds of millions" on its proposals for CCS-based hydrogen production, electrolytic hydrogen production, transport and storage infrastructure, he said. Sadler made the same appeal 12 months ago but has still received no update on the timing for the so-called "track 1 expansion process" which would allow its CCS-hydrogen project to move ahead. Optimism over the "fantastic" Teesside FID and contracts signed with three electrolytic projects must be balanced against concerns that HyNet has not reached FID nor have any of the UK's CCS-based hydrogen plants , Sadler said. On electrolytic hydrogen, the UK missed its deadline to shortlist winners of second round projects in 2024. Multiple electrolysis-focused developers at the Leeds conference talked of "standstill" in the sector, while financiers echoed the importance of the UK's second hydrogen allocation round (HAR2) shortlist. "We're waiting with bated breath for HAR2 so we know which projects we can look to finance," UK-based National Wealth Fund's managing director of banking and investments, Emily Sidhu, said. Opening applications for the UK's subsidy scheme for hydrogen pipeline and storage infrastructure has slipped to the fourth quarter of this year, which means it could be many months into 2026 before winners are selected and years until the projects get built. UK pipeline operators envy the government support that peers in continental Europe have received and have been trying to alert London about what companies perceive to be unduly arduous permitting processes, one pipeline firm told Argus . Emperor's new clothes The funding appeals come at a difficult time. The Labour government, which was elected last year, is reviewing spending across all departments, creating extra doubt. The total cost of the UK's ambitions for hydrogen and CCS would surpass several times over the £21.7bn ($27.3bn) for CCS and £2bn for electrolytic hydrogen that the government has confirmed for the first rounds. While raising funds from the government, the Emissions Trading System (ETS) or the so-called gas shipper obligation are possibilities, it is not sufficiently clear to give confidence to investors, Equinor's Sadler said. Moreover, the Labour administration has not said if it will stick to the former Conservative government's targets, Sadler noted. "It's rhetoric. Government policy for hydrogen and CCS? There isn't any. People quote 10GW [hydrogen production] and four [CCS] clusters by 2030 and 30mn t/yr [CO2 sequestration] by 2030. That's the Tory [Conservative] policy, the Labour government hasn't got a policy at the moment," Sadler said. The industry's belief in the UK as an investment proposition cannot be sustained forever, he said. The UK's Department for Energy Security and Net Zero has not responded to questions about the Labour government's hydrogen targets. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

DOE cancels California H2 hub impact assessment meeting


07/02/25
News
07/02/25

DOE cancels California H2 hub impact assessment meeting

Houston, 7 February (Argus) — The US Department of Energy (DOE) canceled the in-person meeting scheduled this month as part of the environmental impact assessment process for California's hydrogen hub. The Office of Clean Energy Demonstrations (OCED) said in a notice late Thursday that it is canceling the meeting scheduled for 19 February in Irvine, California. The notice instructs members of the public where to submit comments online. The DOE announced in December it was beginning environmental assessments for three hydrogen hubs earmarked for federal funding, including California's Alliance for Renewable Clean Hydrogen Energy Systems (Arches). The fate of federal support for hydrogen hubs, which were a signature part of the previous administration's climate initiatives, has been thrown into doubt since President Donald Trump ordered a pause to disbursements associated with the Inflation Reduction Act. Arches was also ordered earlier this month to suspend its community engagement meetings while the new administration evaluates whether federally funded clean energy initiatives align with its objectives. The public commenting period for Arches is open until 3 March, DOE said. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more