Federal climate and energy minister Chris Bowen says the $2 billion secured for green hydrogen projects in the latest federal budget is “just a downpayment” on what Australia needs to do to compete with the US and other countries.
In a speech on Saturday to business in western Sydney, Bowen said green hydrogen is key to ensuring that Australia does not fall into the Kodak trap by thinking its future lies with coal and gas rather than green energy.
“Australia will continue to be an energy powerhouse …. forever,” Bowen said.
“You’ve all heard of a Kodak moment, Kodak forgetting that it was an image company, a memory company, and thinking they were a film company, and they no longer exist.
“And if we think we’re a coal and gas country, we’re not an energy country, we’ll make that Kodak mistake. We are an energy country that makes energy, that energy is changing, the demand is changing, and we need to seize that opportunity, not squander is, and that’s exactly what this budget does, with more to come.
“I’ve said that $2 billion in the green hydrogen head start is a down payment on our response to the Inflation Reduction Act. As down payments go, $2 billion isn’t bad, I’m quite pleased with it, but it is a down payment, in terms of what else we need to do later in the year, and beyond, to respond.”
Bowen says the money will be allocated through ARENA via a competitive process that will break down the difference between the strike price and the market price, and make renewable green hydrogen projects in Australia competitive and viable compared to the US and elsewhere.
“Does it match the Inflation Reduction Act? It doesn’t need to,” Bowen said. “It needs to keep us in the game. With our massive natural advantages, we needed enough of a tax concession or a support to keep us in the game.”
Australia has more than a hundred different green hydrogen proposals, some of them massive in scale if a little undefined. But some of the major developers, including Andrew Forrest’s Fortescue Future Industries, have warned that Australia risks missing out if it doesn’t compete with incentives in the US and Europe.
Bowen said the recently released State of Hydrogen Report showed Australia had the largest pipeline of potential green hydrogen investments in the world – around $300 billion worth – and one quarter of all potential hydrogen projects.
But he said these risk being lost to the tax concessions offered in the US without a response from the Australian government. Bowen is expected to announce further support for green hydrogen projects later in the year.
Earlier in the speech, Bowen said the response to climate change required a bigger and faster response than the Industrial Revolution.
“This is a massive change in our economy on a very short timeframe. We have seven years to reduce emissions very, very substantially, to hold the world as close as possible to 1.5°, which is very important for our country.
“We all remember the bushfires of 2019, we all lived through them; 2019/2020. We all lived through them. Some of us, including my family, was evacuated from where we were at that point. Many Australians lost their lives, far too many million Australian animals lost their lives, great swathes of our country were destroyed.
“If we don’t hold the world as close as possible to 1.5 degrees of warming, those climactic conditions that led to that conflagration across our country, will be the average by the 2040s.
“It will be average climactic conditions that our country will face every year, year after year by the 2040s, and will be regarded as a good year by the 2060s. We can’t let that happen to our country, hence the need to act.”
