Australia and Germany Seal $445 Million Green Hydrogen Pact

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Australia and Germany have inked a 400 million-euro (US$445 million) green hydrogen deal that will guarantee European buyers for the former's renewable hydrogen producers.

Equally funded by the governments of both countries, it will form part of Germany's H2Global auction mechanism. Australia has superior solar power resources and ambitious green hydrogen production plans while Germany is keen to decarbonise its heavy industrial sectors with increased use of green hydrogen. The deal expands an existing Energy Partnership to an Energy and Climate Partnership and was signed by Australia's Minister for Climate and Energy, Chris Bowen, and German State Secretary for Economic Affairs and Climate Action, Anja Hajduk. Industrial Info is tracking 135 hydrogen-related projects in Australia worth more than US$18 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

"Renewable hydrogen is key to Australia's 21st century export prosperity," said Bowen. "The world needs it. We can make it. And we can ship it to our partners, or use it to make green products, chemicals, and fuels in Australia to export to the world. Australia has the sun and wind to be a renewable energy superpower, and a hard-won reputation as a trusted energy supplier. A strong international hydrogen market supports our shared industrial decarbonisation and supports energy security in both Australia and Germany. We're fortunate to be able to collaborate so closely with like-minded partners on this historic initiative."

Germany's Vice Chancellor and Minister for Economic Affairs and Climate Action, Robert Habeck, commented: "The energy transition as a main pillar of climate action coupled with international cooperation enables us to get to fast, secure and affordable solutions for the challenge of climate change. Today's signing of the Energy and Climate Partnership and the declaration for bilateral H2Global auctions marks a significant step forward in our shared commitment to addressing those challenges of our time. We are confident that joint hydrogen auctions under H2Global will kick-start the market and provide urgently needed price signals."

Australia has one of the largest portfolios of proposed hydrogen projects, accounting for around 20% of the world's total according to the International Energy Agency (IEA), and it represents approximately half of all export oriented projects announced globally. However, most projects remain at the feasibility or engineering stage while large commercial-scale projects are only just getting started. Australia will adjust its targets on a five-yearly basis but for now is looking at producing at least 15 million tonnes of hydrogen annually, and possibly up to 30 million tonnes, by 2050. It is supporting its efforts with a variety of financial support mechanisms, the creation of hydrogen hubs and its AUS$2-per-kilogram hydrogen production tax incentive as a time-limited, demand-driven production support to eligible producers of renewable hydrogen.

Germany is one of Europe's largest proponents of green hydrogen investment. Last month, Industrial Info reported that its gas transmission system operators (TSOs) had submitted their plan for a hydrogen core network (HCN) that will span the country and cost 19.7 billion euro ($21.4 billion) to realize. Spanning 9,666 kilometers (km), the core network marks the beginning of a Germany-wide hydrogen infrastructure that will accelerate the ramp-up for hydrogen production by 2032. It will consist mainly of converted natural gas pipelines (roughly 60%), new hydrogen pipelines and compressor stations. The first major pipeline is expected to be operational from 2025, while the completion of the entire HCN is expected in 2032. For additional information, see August 5, 2024, article - Germany to Spend $21 Billion on Hydrogen Network.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).