Albanese government pledges $69m for Queensland hydrogen hub

The investment comes as Australia moves to kickstart the hydrogen industry, expected by some to dominate global energy markets.

The Albanese government will invest $69.2m to accelerate the development of a hydrogen hub in Queensland, as Energy Minister Chris Bowen moves to expedite an industry that some believe could be a new lucrative export opportunity.

The funding, which will be matched by private investors, illustrates Australia’s accelerated push into hydrogen, a fuel source that is attracting significant global attention as countries move to rapidly decarbonise to reach net zero by 2050 commitments.

Mr Bowen said the government has struck an agreement to invest $69.2m to develop the Central Queensland Hydrogen Hub in Gladstone, which could produce 292,000 tonnes of hydrogen a year by 2031 – equivalent to fuelling more than double Australia’s heavy vehicle fleet.

Construction on the project is set to begin next year.

Mr Bowen said the establishment of a hydrogen industry in Queensland will continue the region’s history of generating much-needed resources for the country and the world.

“Central Queensland is an energy export powerhouse and has helped keep the lights on for decades, and as global markets shift – it can reap the benefits of new industries like hydrogen too,” said Mr Bowen.

“Renewable hydrogen will play a big role in our path to net zero, helping cut emissions in hard-to-abate sectors, and the manufacturing of green metals and other products the world needs.”

Queensland is moving to establish a hydrogen industry as it embarks on a rapid move away from fossil fuels. Premier Annastacia Palaszczuk last year unveiled a plan to exit coal-fired power by 2035 under a 10-year $62bn energy plan that sees significant increases in solar, wind and pumped hydro generation.

The reshaping of Queensland’s energy industry, which remains Australia’s most coal dependent state – will drastically upend the state’s economy.

Queensland Energy Minister Mick de Brenni said hydrogen can be a catalyst for future economic prosperity.

“This is a critical time for Queensland, as new industries emerge at rates not seen since the industrial revolution, driving growth and prosperity in the regions,” he said.

“Thanks to Queensland’s combination of abundant natural resources and clear policy framework supporting green hydrogen, it’s estimated the industry will be worth $33bn by 2040, boosting our economy, supporting jobs, and helping decarbonise the world.”

While states and the federal government have high hopes for hydrogen, there remains significant uncertainty about the future of the fuel source.

Some see it as potentially replacing LNG for energy poor countries such as Korea and Japan, but others believe it will never be cost-effective.

Commercialisation of hydrogen remains some way off. To bring costs down, Australia will need a significant uptick in renewable energy generation to power the electrolysis. Should that occur, Australia could become a hydrogen exporting country.

Global demand for hydrogen is on course to soar. Japan, one of the largest buyers of LNG, earlier this year revised a target for hydrogen imports to 12 million tonnes a year by 2040. By 2050, Japan is aiming for around 20 million tonnes. It previously expected imports to total 3 million tonnes annually by 2030.