Despite its early leadership ambitions, Australia is falling behind in the global hydrogen economy, with 80% of its low-carbon hydrogen projects still in early development and multiple high-profile cancellations, according to new analysis from data and analytics solutions provider Wood Mackenzie (WoodMac).
In a report, ‘How can Australia compete in the global hydrogen market (before it’s too late)?,’ WoodMac highlighted that “while the country boasts world-class renewable energy potential and abundant land, it is struggling to convert those advantages into competitive hydrogen production.”
Joshua Ngu, Vice Chairman for Asia Pacific at WoodMac, stated: “Australia’s strategic proximity to Asian demand centres is a clear advantage. But this is offset by a significantly higher Levelized Cost of Hydrogen (LCOH), driven by elevated engineering, procurement and construction (EPC) and power costs. This leaves Australia trailing behind global hydrogen front-runners such as the Europe and the Middle East.”
Globally, 6 million tonnes per annum (mtpa) of low-carbon hydrogen capacity is either operational or under construction, and of that, Australia contributes less than 5%, WoodMac claimed, adding that the recent project cancellations have raised concerns about the future of this industry in the country.
The data and analytics solutions provider outlined five key areas where policy and market interventions could help reposition Australia in the global hydrogen market:
Ngu concluded: “Unless Australia ramps up policy support and market development now, it may find itself locked out of the next wave of industrial transformation.”
To read more about hydrogen developments in Australia, click here .