Australia is investing A$2 billion ($1.4 billion) to accelerate the growth of its renewable hydrogen industry, according to its latest annual budget. The government will allocate funds under the “Hydrogen Headstart” program to provide revenue support for large-scale renewable hydrogen projects through competitive hydrogen production contracts.
The investment aims to bridge the commercial gap for early projects and set Australia on course for up to a gigawatt of electrolyser capacity by 2030 through two to three flagship projects.
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Treasurer Jim Chalmers announced that Australia already has the world's largest pipeline of renewable hydrogen projects. He added that achieving the country's target of net zero emissions by 2050 will require renewable hydrogen.
Prime Minister Anthony Albanese's government has also set aside A$4 billion for renewable energy projects and allocated part of the A$15 billion National Reconstruction Fund to support green industries, bringing the total investment into renewable energy to more than A$40 billion.
The budget also focused on supporting the critical minerals industry, which is crucial for making batteries and other green technologies. Australia is a supplier of almost half of the world's lithium and the third-largest cobalt exporter. It is also a significant producer of rare earths, copper, graphite, manganese, and other minerals key to the global energy transition. However, these minerals are mainly processed in China and turned into essential materials for batteries and magnets used in products from electric vehicles to missiles.
To draw foreign investment into such projects in Australia, the budget allocated A$57.1 million for a critical minerals program. The investment will strengthen Australia's position in the global race to develop renewable energy technologies, creating new job opportunities and contributing to the country's sustainable economic growth.
In his speech, Chalmers said that the government's investment was the largest ever in Australia's energy transformation. The move underscores the country's commitment to a cleaner, greener future and shows that Australia is stepping up to its responsibility to combat climate change.
