A new report from global energy consultancy Xodus has emphasized the opportunity for hydrogen development in Australia and the chance for UK companies to export their products and services.
Australia is expected to be a significant force in global hydrogen by 2030, both for export and the decarbonization of domestic industries, and as per the study, this presents a major opportunity for international companies to export their expertise to this market, and UK businesses are in prime position to capitalize on this.
To note, the UK’s government commissioned Xodus to undertake the overview of existing domestic capabilities in Australia that support the low-carbon hydrogen sector to improve understanding of the synergies between the two countries.
As part of the supply chain readiness assessment, Xodus explored potential gaps where UK supply chain companies could provide support and any barriers which could slow the roll out or impede participation from overseas.
The study stated that if Australia is to fully realize its hydrogen potential, collaboration between the UK government, its supply chain and Australian counterparts is essential to provide the capacity and skills needed to realize its hydrogen export ambitions, as well as serving its domestic needs.
Simon Allison, Vice President APAC at Xodus, commented: “Delivering a global energy transition that is both effective and prosperous, requires collaboration at all levels of the industry, from supply chain to government. Our Australian Hydrogen Market study reinforces the wider benefits that can be realised through joined up thinking and by sharing expertise across borders.”
“Australia is emerging as a key force in the global hydrogen market, holding the world’s second-largest production capacity in active development. With numerous potential projects and growth opportunities, the country is set for significant expansion beyond 2030, with an expected annual market revenue of $24 billion (£13 billion). Clearly hydrogen is a massive growth opportunity for Australia, but it will not be able to fully grasp this potential without input from overseas and there is a real opening for UK companies to leverage their strength and capture a share of this market.”
It is important to mention that according to Xodus, it is not a given that UK companies will be able to capture the work. The consultancy highlighted four major barriers to entry. Among the most significant is the regulatory and policy uncertainty. Other barriers include revenue certainty, the absence of a carbon policy that establishes a higher tax on emissions and the domestic fiscal regime.
Mark Elliot, Commercial Lead for Hydrogen at Xodus, said: “Challenges are part and parcel of the energy industry, but companies should bear in mind what can be gained by overcoming them. Australia presents substantial opportunities for UK companies prepared to invest time in understanding the regulatory landscape and strategically positioning themselves to enter the market.”
Four main prospects in Australia for UK companies were identified in the study: hydrogen electrolysis manufacturing, hydrogen-fueled gas turbines, hydrogen fuel cells and transportation.