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Australian H2 Council makes 8 recommendations to Morrison Govt, one of which is $19B Net Zero Fund.

News Published by NRI Herald Australia, 27 September 2021

Australian H2 Council (AHC) makes 8 recommendations along with $19B Net Zero Fund to Morrison Govt.

Australia’s biggest hydrogen developers have called on the Morrison government to create a $19bn Net Zero fund, aimed at slashing emissions and speeding up the fuel’s rollout to the steel and heavy transport industries and in the nation’s gas sector by 2030.

NRI Herald technology team has found out via the official website of Australian Hydrogen Council which is a peak body for the emerging hydrogen industry in Australia and connects with its stakeholders to collectively create a clean and resilient energy future that has hydrogen as a key part of the energy mix, have published a comprehensive white paper titled "Unlocking Australia’s hydrogen opportunity". AHC tweeted via its official twitter handle today and said:

We have an enormous opportunity in Australia to become a global #hydrogen leader thanks to our #renewable energy resources, technical skills and track record with international partners.

As per reports Origin energy becomes the latest big name which joined the bandwagon of the upcoming hydrogen race. Some of the country’s biggest investors and developers – including ANZ, NAB, Woodside Petroleum, Origin Energy, Wesfarmers and Fortescue Metals Group – are members of the Australian Hydrogen Council. Its blueprint calls for $10bn in seed funding and a top-up of $1bn annually through to the end of this decade, to be allocated to business through grants and loans.

Australian Hydrogen council(AGC) gives 8 recommendation in the latest (September 2021) published white paper on their official website:

Recommendation 1: Plan in the national interest

AHC recommends that the Australian Government establishes a body to develop an evidence-based approach to planning and coordinating the transition to net zero – including the development of hydrogen infrastructure – and reporting progress. An initial annual budget of approximately A$10 million would be required.

Recommendation 2: Establish a Net Zero Fund

AHC recommends that the Australian Government establishes a Net Zero Fund, with an initial allocation of A$10 billion and a top up of A$1 billion each year to 2030. Drawdowns should be decided in response to planning and market soundings. This would amounts to $19billion in total till 2030.

Recommendation 3: Prioritise hard to abate and scalable demand sources

AHC recommends that the Australian Government prioritizes project funding to grow demand for hydrogen in the applications that are more likely to require clean hydrogen to decarbonise, and more likely to achieve large scale. Ideally these should demonstrate an ability to open the market to other applications, through knowledge/ technology sharing, geographic proximity, and/or cost reduction. Recommendations 6 and 8 provide further information on these priorities.

Recommendation 4: Build sector coupling into planning

AHC recommends that the Australian Government explicitly tasks the planning body under Recommendation 1 to address how the gas and electricity infrastructure can be co-optimised for delivering lowest cost hydrogen to end consumers.

Recommendation 5: Blend hydrogen into natural gas to create demand

AHC recommends that the Australian Government sets a target of 10 % hydrogen by volume in the natural gas networks, by 2030.

Recommendation 6: Trial heavy transport

We recommend that the Australian Government funds:

• At least two heavy vehicle trials of large fleets, at a minimum amount of A$200 million each, focussed on heavily-trafficked truck routes (e.g. Sydney-Melbourne).

• At least three larger trials for lighter trucks for logistics near hydrogen centres, at A$25 million each.

• At least two larger trials for bus routes near hydrogen centres, at A$45 million each for 40 buses (or a combination of smaller and larger, at A$12 million per small trial for 10 buses).

Funding would be drawn from the Net Zero Fund and should be aligned with funding from state/territory governments. Some of this work might be funded by the Future Fuels Fund, which we note has just under A$50 million available after the first BEV round. Processes to commence these projects should start as soon as possible given that they will take time to implement; beyond the contracting process (which may take a year) there will be time required to procure the vehicles in sufficient numbers. Use of funding to replace diesel should also extend to other means of transport – such as trains and ferries – as the business cases and demand for these evolve.

It wants the Australian government to set a goal of 10 per cent hydrogen in the gas network by 2030 and targeting sectors that face challenges to cut emissions, such as steel and aluminium.

Recommendation 7: Incentivise markets in FCEVs

AHC recommends that the Australian Government:

• Sets carbon emissions standards for all vehicle types.

• Provides tax offsets for vehicle purchases and removes taxes that inhibit purchasing.

• Sets a 50 per cent ZEV target for fleets of cars, buses and ancillary vehicles for 2030. This would include privately operated public transport fleets and government owned logistics providers.

• Supports ZEV fleet procurement across state/territory and the federal government, with information sharing and guidance on relevant matters, such as available operators, manufacturers and optimal contractual measures for the evolving markets.

Recommendation 8: Support hydrogen for hard-to-abate industries

We recommend that the Australian Government funds a hydrogen readiness programme of at least A$1 billion for industrial processes that cannot readily be electrified, including (and not exclusively) for the production of iron/steel, ammonia, methanol, and alumina/aluminium. Funding would be drawn from the Net Zero Fund and should be aligned with funding from state/territory governments. Funding should be prioritised for projects that protect or create local jobs and have a detailed plan for skilling and re-skilling. Applicants should be required to share information to support industry knowledge development – this could be assisted by engaging with industry associations to support delivery.

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