Australia inks $660 million hydrogen pact with Germany

A joint development deal with Germany will unlock $660 million of shared investment in Australian hydrogen projects, providing some certainty after setbacks.

Announcing the pact on Friday, Energy Minister Chris Bowen said the joint funding, available over the next 10 years, would support new commercial supply and access to the European market, including through guaranteed offtake.

The H2Global deal “marks a significant step in building a strong international hydrogen market, supporting energy security in Australia and Germany,” he told the Asia-Pacific Hydrogen Summit in Brisbane.

Hydrogen is expected to be the foundation of new clean energy industries in Australia and rival net-zero economies, as a feedstock to make green iron and steel, ammonia, fertilisers and fuels.

But after a pullback in investment, including by Andrew Forrest’s Fortescue Group, Mr Bowen acknowledged some projects would not proceed, but slammed those who had “gloated” about the setbacks.

“Let me be clear: Australia’s green hydrogen pipeline is alive and healthy,” he said.

The minister said green hydrogen would be on the ballot paper at the next federal election, with a Peter Dutton government to see “support stall, investment chilled and an expensive and risky frolic with nuclear energy instead”.  

“To be fair, the LNP are at least explicit. They would abolish Hydrogen Headstart and the production incentives.”

In recent months, some have declared Australia’s green hydrogen industry is dead, he told the industry and investment audience.

“In fact, they’ve celebrated in it …This says more about them and their climate inactivism than it does about Australia’s green hydrogen pipeline.”  

Australian researchers are also examining how green iron can support the decarbonisation of Germany’s economy, while maintaining jobs and the productive capacity of core industries. 

The University of NSW has been selected to lead a team of academic and industry experts on behalf of Australia’s consortium.   

“All of this feeds into the broader climate cooperation agreement that Australia and Germany are entering in to,” Mr Bowen said. 

“Australia’s green hydrogen pipeline is one of the strongest in the world. The government of Germany agrees and they are putting their money where their mouth is.”  

Germany is already involved in a Townsville hydrogen hub, a methanol production plant in Port Augusta, the Hysata electrolyser production facility in Port Kembla, and the ATCO project to develop an electrolyser and ammonia facility in the Illawarra.