Perrottet backs Australia’s biggest hydrogen plan to power state’s future

Dominic Perrottet has signed off on Australia’s largest hydrogen strategy in his first major cabinet decision as Premier, in a move that will see green hydrogen jobs in NSW outstrip those in the coal industry by 2050.

The NSW government will on Wednesday release the strategy, which it says will set up the state as a “global hydrogen superpower” and grow the NSW economy by more than $600 million by 2030.

NSW Premier Dominic Perrottet has backed green hydrogen to boost the economy and help reduce carbon emissions.Credit: Dominic Lorrimer

NSW says it will lead the country in providing up to $3 billion in grants and waiving fees and charges for producers, making the state one of the cheapest regions to produce green hydrogen in the world.

The government expects NSW to attract between $80 billion and $270 billion of private investment in the hydrogen industry, which will largely flow to coal-dependent communities in the Illawarra and the Hunter regions.

The strategy says a green hydrogen industry, which involves using renewable sources such as wind and solar to split hydrogen from water, would “pave the way for a net zero emissions future while driving economic growth”.

Mr Perrottet said hydrogen would play a critical role in driving new investment and creating jobs in the state.

“Australia has an opportunity to be an energy superpower, NSW will lead the country with this hydrogen strategy,” the new Premier said.

“Our major trading partners see hydrogen as part of their energy future, this state has the skills, infrastructure and renewable energy resources to compete globally in this new industry.”

The NSW government says green hydrogen is essential to securing the long-term future of heavy industry such as steel and chemicals production and will create as many jobs as the coal industry by 2050.

Major trading partners such as South Korea and Japan have also put green hydrogen at the centre of their decarbonisation plans.

The strategy outlines a range of hydrogen uses such as a replacement for petrol and diesel in transport, injection into gas distribution networks and becoming part of a blend with natural gas for use in manufacturing facilities.

It could also be used for on-demand electricity generation and exported overseas.

Treasurer and Energy Minister Matt Kean said the strategy would set the state up for the future.

“It sets NSW up to be the leading producer of green hydrogen in the world, drawing on our huge renewable resources and our highly skilled workforces with the industrial capability in the Hunter and Illawarra,” Mr Kean said.

“Hydrogen will not only help the state halve our emissions by 2030 and get to net zero by 2050, it will create new opportunities for our heavy industry, and an economic bonanza of investment and jobs.

“This strategy is forecast to more than halve the cost of green hydrogen production in NSW and will make NSW the best place to invest in hydrogen in the world.”

Mr Kean said the strategy involved up to $3 billion in incentives, which would include exemptions from government charges for green hydrogen production and a 90 per cent exemption from electricity network charges for green hydrogen producers who connect to parts of the network with spare capacity.

There would also be a hydrogen refuelling station network to be rolled out across the state.

Mr Perrottet, Mr Kean and mining billionaire Andrew “Twiggy” Forrest will release the strategy.

Mr Forrest’s Fortescue Future Industries this week announced it would build a $1 billion hydrogen plant in Gladstone, Queensland to make electrolysers that extract hydrogen from water.

“NSW is taking a state leadership position providing clear pathways for how renewable hydrogen can deliver for Australian businesses, Australian jobs, communities, and our children’s future,” Mr Forrest said.

“At [Fortescue Future Industries] we are doing everything we can as a business to lead the world effort to lower emissions. We are planning to deliver 15 million tonnes of renewable green hydrogen to the world by 2030 – increasing to 50 million tonnes per year thereafter.

“We are committed to working with the NSW government to support their ambitions and develop green hydrogen hubs together.”

In a statement, energy infrastructure company Jemena said that “a renewable gas target of around 10 per cent should be introduced” in NSW to bring more hydrogen to market as quickly as possible.

“This is great recognition of hydrogen’s role as a game-changer for not only the energy sector, but for the whole of the NSW economy. The strategy places Australia well on the path towards becoming a hydrogen superpower,” Jemena’s executive general manager of networks Shaun Reardon said.

“We know green hydrogen has a central role to play in the decarbonisation of the NSW gas distribution network, and that it will prove crucial in powering those industries that can’t be easily electrified, such as manufacturing.”

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