Tasmania will invest A$50 million ($33 million) to build a renewable hydrogen industry, as the island state plots a course to commercial exports of the clean fuel by 2030.
Australia’s smallest state seeks to benefit from its abundance of hydropower generation and the falling cost of large-scale production from renewables to make emissions-free hydrogen for export to Asia. Hydrogen projects are being mooted around Australia, with a 2018 government report estimating that the industry could be worth more than $1 billion to the economy annually by 2030.
The Tasmania state government’s Hydrogen Action Plan includes a 1,000-megawatt renewable hydrogen plant, as well as funding for concessional loans to promote further investment. Tasmania’s reliance on hydroelectricity, which makes up the bulk of generation on the island, meant it could produce renewable hydrogen as much as 15% cheaper than other parts of Australia, according to the report published on Monday.
“Hydrogen presents a significant economic opportunity as countries such as Japan, South Korea, Singapore and China look towards renewably produced hydrogen as a way to power their nations while reducing emissions,” the state government said in the statement.
So-called green hydrogen is produced from water via electrolysis in a process that is free from carbon emissions when powered by renewable energy. Currently, hydrogen is mainly made by splitting it off from molecules of natural gas in a process that also produces carbon dioxide.